Impact of the Affordable Care Act on Behavioral Health March, 2014

My Background Medicaid Director Previously DMH Medical Director – 20 years Practicing Psychiatrist CMHCs – 10 years FQHC – 18 years Distinguished Professor, Missouri Institute of Mental Health, University of Missouri St. Louis

Endorsements "He is not only dull himself, he is the cause of dullness in others.“-Samuel Johnson "He uses statistics as a drunken man uses lamp-posts... for support rather than illumination." -- Andrew Lang "He can compress the most words into the smallest idea of any man I know." -- Abraham Lincoln

Today… It’s not just Arkansas Status of our world Healthcare delivery and payment “change” strategies Future of specialty behavioral health

Our niche: caring for complex, costly patients Socially vulnerable patients (income, language, race/ethnicity, health disparities) Clinically vulnerable patients (complex, difficult healthcare needs) You Are Here Source: Health Affairs: VA Lewis, et al. “The Promise and Peril of Accountable Care for Vulnerable Populations: A Framework for Overcoming Obstacles.” 2012. Health Affairs: VA Lewis, et al. “The Promise and Peril of Accountable Care for Vulnerable Populations: A Framework for Overcoming Obstacles.” 2012.

Co-morbidities in the Adult Population Source: Druss & Walker. “Mental disorders and medical comorbidity.” The Robert Wood Johnson Foundation Synthesis Project, February 2011.

Opportunities… Defined by Tragedies 2020, behavioral health disorders surpass all physical diseases as major cause of disability MI most common reason for SSD/SSI More deaths due to suicide than to accidents, homicides, and war combined Most mental health treatment is in primary care - medication, poorly managed Sandy Hook Tucson Aurora Virginia Tech

Effective Treatments

62 million people will gain access to coverage that includes MH/SUD at parity Essential benefits include mental health and substance use treatment MH and SUD must be offered at parity with medical/surgical benefits This means… …Most people will have coverage that includes mental health and substance use treatment EHB applies to Exchanges, individual market, & individuals newly enrolled in Medicaid

Parity Robust final rule

Role of Parity Essential Health Benefit (EHB) for private insurance must be at parity. What does parity mean? Medicaid Benchmark Benefit must be at parity. Parity does extend to all new individual and small group plans beginning in 2014. What about parity for current Medicaid beneficiaries?

State Estimates of the Uninsured You can access state estimates for the Medicaid Expansion and for the State Health Insurance Marketplace at http://www.samhsa.gov/healthReform/enrollment.aspx Three estimates are provided: Adults with Serious Mental Illness Adults with Serious Psychological Distress Adults with a Substance Use Disorder

Essential Benefit Plans (EBP) on the Insurance Exchanges The plan selected by a state to be its EBP benchmark for ACA may not comply with parity. States had until exchanges went live to make it comply with parity - then it became an EHB benchmark plan But so far its unclear if CMS will enforce this – especially since the final ACA rule stated that “We do not intend to require or request states to include specific services within EHB categories offered by their ABP.” States resisting ACA implementation will not enforce it either High deductibles and co-pays will be an obstacle

Alternative Medicaid Benefit (AMB) for Medicaid Expansion Groups Wellstone – Domenici Parity does not apply If the individual meets that states definition for “medically frail” they reverts to the standard Medicaid benefit Serious Mental Illness and Substance Use Disorders constitute Medically Frail But - states get to define which diagnosis is “SMI” Many states are not expanding Medicaid

Parity and Case Law Monitoring and reporting… Anthem Health Plans’ Connecticut rate schedule changes violate the Mental Health Parity and Addiction Equity Act New York against UnitedHealth Group California class-action lawsuit against United Behavioral Healthcare for reviews of outpatient treatments Vermont held Cigna has burden of proving that disparate treatment of mental health and medical surgical justified by clinical standards

Four key elements of the Affordable Care Act

2010 Prohibits lifetime benefit limits Dependent coverage up to age 26 is mandated Cost-sharing obligations for preventive services are prohibited Recissions are prohibited Pre-existing condition exclusions for dependent children (under 19 years of age) are prohibited Coverage for emergency services at in-network cost-sharing level with no prior-authorization is mandated

More 2010 Require coverage of tobacco cessation programs for pregnant women under Medicaid free of cost-sharing Begin Community Health Centers and National Health Service Corps Fund expanded funding to total $11 billion over five years Begin Medicaid global payments demonstrations to fund large, safety-net hospitals in five states to alter payment from fee-for-service to a capitated, global payment structure. Establish Patient-Centered Outcomes Research Institute. Create a private, nonprofit Patient-Centered Outcomes Research Institute to set a national research agenda and conduct comparative clinical effectiveness research.

2011 85% MLR for large group (with refund) is mandated 80% MLR for individual and small group (with refund) is mandated Primary care physicians and General surgeons in shortage areas begin 10 percent Medicare payment bonus for next 5 years Medicare adds annual wellness visit with no copayment or deductible and eliminates cost-sharing for evidence-based preventive services

2012 Medicaid starts option funding Health homes for persons with chronic conditions Prohibit federal payments for Medicaid services related to hospital-acquired conditions. Begin Medicaid Emergency Psychiatric Care Demonstration Project. to expand the number of emergency inpatient psychiatric care beds available.

2013 Medicaid payment rates to primary care physicians for furnishing primary care services raised no less than 100 percent of Medicare payment rates in 2013 and 2014. Medicaid coverage of preventive services approved by the U.S. Preventive Services Task Force with no cost-sharing will receive an increased federal funds

2014 Health insurance exchanges established Guarantee issue is required Community rating required limits use of age and illness as a rating factor All annual and lifetime limits prohibited Essential Benefit established and required to cover MH and SA at Parity Individual Mandate Starts

Insurance Exchanges To Date: 16 states have selected a state-based model, 7 are partnering with the federal government and 26 states have chosen federally-run exchanges. Current enrollment deadline is March 31, 2014 In non- expansion states low-income individuals may experience more difficulty finding affordable coverage because they are not Medicaid-eligible and do not qualify for federal subsidies in the exchange.

ACA Affordable Health Insurance Marketplace Fact: Enrollment system went live in ALL STATES on October 1, 2013. Insurance will became effective on January 1, 2014. Scope is all uninsured adults above 133 percent of poverty (plus discounted 5 percent of income). Overall 25% will have a Behavioral Health Condition. (About 6% will have a Serious Mental Illness and 14% will have a Substance Use Disorder). KEY ISSUES TO CONSIDER: Are eligible uninsured persons aware of the opportunity? Will persons with mental health and substance use conditions actually enroll? Will the insurance benefits be adequate?

2014 Medicaid Expansion To date, 26 states are planning to expand coverage in 2014 Some include non-traditional models such as Medicaid premium support. Decisions to expand Medicaid or discontinue Medicaid expansion in 2015 will impact bids that insurers submit in the spring of 2014 for the 2015 enrollment period.

ACA Medicaid Expansion Fact: For states that choose this option (now 26 + DC), enrollment system went live on October 1, 2013 and coverage began on January 1, 2014. Designed for all uninsured adults up to 133 percent of poverty (plus discounted 5 percent of income). Overall 40% with Behavioral Health Conditions. (About 7% will have a Serious Mental Illness and about 14% will have a Substance Use Disorder). KEY ISSUES TO CONSIDER: What is the effect of a State opting out? Are eligible uninsured persons aware of the opportunity? Will persons with mental health and substance use conditions actually enroll?

Increased competition in MH/SUD Managed care Accountable Care Organizations New MH/SUD coverage under essential benefits New parity requirements Unless otherwise noted, all requirements are effective January 1, 2014. 1. Applies to new plans only 2. The ACA requires plans sold in the small group market to cover the Essential Health Benefits (which include MH/SUD). In subsequent rulemaking, HHS clarified that compliance with parity is a requirement of EHB. 3. Already in effect under the 2008 Mental Health Parity and Addictions Equity Act 4. Required to comply with federal parity law on treatment limitations and cost- sharing requirements, but not required to comply with parity law on annual/aggregate limits or in/out-of-network limitations. This is likely because these types of limitations are less applicable to FFS plans than to managed care.

EHR Meaningful Use Behavioral Health Quality Measures (Phase 2) Quality metrics for chronically ill: Tobacco screening and cessation Weight screening and counseling Depression screening and intervention Hypertension screening Depression remission rates using PHQ9! Depression followup using PHQ9 Substance Abuse assessment in Bipolar patients Alcohol Treatment initiation and Engagement Maternal depression screening at < 6 month child visit Suicide assessment for depressed patients

Delayed Changes Employer mandate delayed from 2014 to 2015 First reduction of Disproportionate Share Hospital (DSH) funds delayed from 2104 to 2015 Compliance of small business Existing Plans with new Rules CMS has delayed until September 2015 15 States will permit renewal of non-compliant plans 18 States will not 17 States are undecided

2015 - 2017 Innovation Waivers Beginning 2015, states may consider developing proposals to waive portions of the ACA beginning in 2017. “Innovation Waivers” must cover at least as many people as under the ACA and provide coverage that is at least as comprehensive and affordable, at no extra cost to the federal government. States that receive waivers may finance their reforms with federal funding that otherwise would have been provided for premium tax credits, cost-sharing reduction and small business tax credits

Estimated changes in payer mix Medicare is included in “other” Source: The Commonwealth Fund: “Including Safety Net Providers in Integrated Delivery Systems: Issues and Options for Policymakers”

50 Years of Federal Spending Chart depicting 50 years of federal spending; image taken from NPR.org

The future… www.thenationalcouncil.org The greatest danger in times of turbulence is not the turbulence. It is to act with yesterday’s logic. Peter Drucker Contact: communications@thenationalcouncil.org | 202.684.7457

Population based - Health homes… 37

Health Home Functions: CMHCs are well positioned CMHC teams already fulfill many Healthcare Home functions: Providing individualized services and supports Linking consumers to community and social supports Hospital admission and discharge follow-up Communicating with collaterals CMHCs already serve people with high rates of chronic medical conditions Many CMHCs have been trained by PBHCI Grant Project Providing individualized services and supports, linking consumers with community and social supports, or utilizing health information technology to manage care, we are well positioned to serve as a Healthcare Home.

Defining Health Homes Enumerated in Sec. 1945 of the Social Security Act Provides states the option to cover care coordination for individuals with chronic conditions through health homes Intended to improve access and quality of care Eligible Medicaid beneficiaries have: Two or more chronic conditions, One condition and the risk of developing another, or At least one serious and persistent mental health condition

Defining Health Homes Provides 90% FMAP for eight quarters for: Comprehensive care management Care coordination Health promotion Comprehensive transitional care Individual and family support Referral to community and support services Services by designated providers, a team of health care professionals or a health team

What is a Health Home? Not just a Medicaid Benefit Not just a Program or a Team A System and Organizational Transformation

What is Different about Health Homes? Treatment as Usual Health Homes Individual Practitioner Episodic Care Focus on Presenting Problem Referral to meet other Needs Managed Care Manages access to care Does not change clinical practice Integrated Primary/Behavioral Health Care Team Continuous Care Comprehensive Care Management Coordinates care across the healthcare system Data driven population management Transforms clinical practice Emphasizes healthy lifestyles and self-management of chronic health problems

Apples and Oranges Managed-Care Care Management Health Home Care Management Population = most are well most of the time Population = all have multiple chronic conditions Most have a few health care providers Most have many Healthcare providers Primary focus = avoidable over utilization Primary focus= inappropriate underutilization Mostly communicates with providers Mostly communicates with patients directly Administrative relationship Face-to-face personal relationship Mostly e-mail, fax or telephone Mostly in person communication Intermittent contact by different care managers Ongoing contact with stable team Strangers working together You know them and they know you Do not have to provide service to be paid Have to provide service to receive payment

Health Care Home Strategy Case management coordination and facilitation of healthcare Primary Care Nurse Care Managers Disease management for persons with complex chronic medical conditions, SMI, or both Behavioral Health management and behavior modification as related to chronic disease management for persons with Medical Illness Preventive healthcare screening and monitoring by MH providers Integrated Primary Care and Behavioral Healthcare

Health Home Strategy Health technology is utilized to support the service system. “Care Coordination” is best provided by a local community-based provider. MH Community Support Workers who are most familiar with the consumer provide care coordination at the local level. Primary Care Nurse Care Managers working within each Health Home provide system support. Behavioral Health Consultants in each Primary Care Health Home Statewide coordination and training support the network of Health Homes.

Principles One Team One Treatment Plan for the Whole Person CMHC’s composed of pre-2012 CPRC staff plus NCM and PC Consultant PCHH’s composed of new infrastructure and team members One Treatment Plan for the Whole Person Rehab Goals Medical Goals Healthy Lifestyle Goals Some Goals and Outcomes reference Health Home Performance Measures Wrap –Around approach to outside treating PCP, mental health providers, community supports, etc

What is a Health Home? Not just a Medicaid Benefit Not just a Program or a Team A System and Organizational Transformation

What is Different about Health Homes? Individual Practitioner Episodic Care Focus on Presenting Problem Referral to meet other Needs Managed Care Manages access to care Does not change clinical practice Integrated Primary/Behavioral Health Care Team Continuous Care Comprehensive Care Management Coordinates care across the healthcare system Data driven population management Transforms clinical practice Emphasizes healthy lifestyles and self-management of chronic health problems Treatment as Usual Health Homes

Disease Management Diabetes ( 2434 Continuously Enrolled Adults)* *29% of continuously enrolled adults

Hypertension and Cardiovascular Disease 302 3176

Improving Diabetes (HbA1c) 7.2% Uncontrolled (too high) For 51% there are 2 results so we can find the trend The uncontrolled group average HbA1c decreased from 9.50% to 8.95% (-0.55%) 1% point decrease in HbA1c yields: 21% decrease in Diabetes related deaths 14% decrease in Heart Attacks 37% decrease in micro-vascular complications

Improving Cholesterol (LDL) 46.3% Uncontrolled (too high, greater than 100) For 58% there are 2 results so we can find the trend The uncontrolled group average LDL decreased from 122 to 115 (-7) A 10% Cholesterol Reduction yields a 30% reduction in Coronary Heart Disease

Improving Hypertension (BP) 23% Uncontrolled (too high, greater than 140/90) For 61% there are 2 results so we can find the trend The uncontrolled group average BP decreased from 142/90 to 137/86 (-5/4) A 6 point reduction yields: 16% reduction in Coronary Heart Disease 42% reduction in Stroke

Outcomes Reducing Hospitalization Primary Care Health Homes CMHC Healthcare Homes

Intial Estimated Cost Savings after 18 Months Health Homes 43,385 persons total served (includes Dual Eligibles) Cost Decreased by $51.75 PMPM Total Cost Reduction $23.1M DM3700 3560 persons total served (includes Dual Eligibles) Cost Decreased by $614.80 PMPM Total Cost Reduction $22.3M

Intial Estimated Cost Savings after 18 Months CMHC Health Homes 20,031 persons total served (includes Dual Eligibles) Cost Decreased by $76.33 PMPM Total Cost Reduction $15.7 M PC Health Homes 23,354 persons total served (includes Dual Eligibles) Cost Decreased by $30.79 PMPM Total Cost Reduction $7.4 M

State Health Home Activity-March 2014 3 2 2 3 # *Some states may be in the planning phase.

Psychiatrist Shortage Overview Currently Demand for Psychiatrists exceeds the supply Demand for psychiatric workforce is increasing Psychiatric workforce is projected to shrink The current psychiatric care delivery model is not sustainable So what can be done differently? We are going to attempt to first set the stage for the discussion by laying out 1) the current situation in terms of workforce needs and suppiies; 2) projected needs and supply; and then discuss strategies.

Drivers of Increased Demand ACA requires newly covered populations meet the parity requirements of Wellstone Domenici Parity Act Multiple parts of ACA require or incentivize integration of Behavioral Health and general medical care Stigma continues to drop releasing pent up demand In responding to recent press coverage of mass shootings increasing mental health services is more popular than gun control

CURRENT SHORTAGE Best data: Study by University of North Carolina commissioned by Health Resources and Services Administration (HRSA) Demonstrated shortages for all MH professionals, especially “prescribers” 77% of U.S. Counties have “a severe shortage of prescribers, with over half their need unmet” 96% of US counties have “some unmet need” There is currently a national shortage of mental health professionals at all levels, especially prescribers. The most detailed data on supply and demand are from a HRSA sponsored study through the University of North Carolina. They used various estimates of prevalence and severity of mental illness, and utilization data to determine need at the level of counties nationally. That showed that over ¾ of all counties in the US had a “severe shortage of prescribers”, defined as greater than half their need unmet, and almost all counties (96%) had some unmet prescriber needs. These estimates are conservative as they only look at outpatient needs (no institutional or hospital services). Konrad et al, Psych Services, 60: 1307-14, 2009

Current Supply and Need for Psychiatrists Estimated need of 25.9 psychiatrists/100,000 population With current population of 300,000,000, this is 78,000. Current supply is ~ 48,000 (~ 16/100,000) Current gap = at least 30,000 Much greater supply vs. need gap for child and adolescent psychiatry (~ 7,500 total) Based on the UNC studies, the current estimated need for psychiatrists is 25.9 / 100,000. Currrently the supply is ~48,000 (detailed in next slide), leaving a gap of 30,000; The gap is much greater for child and adolescent psychiatrists. Sources: Konrad et al, Psych Services, 60: 1307-14, 2009

Psychiatric Times Series on Psychiatrist Shortage (Summer 2010) “Psychiatry Job Openings Surge into the Future”: Physician recruitment company, Merritt Hawkins reported a 121% increase in requests for psychiatrists between 2007/2007 and 2009/2010 “45,000 More Psychiatrists, Anyone?”: HRSA commissioned studies considered “very conservative” because of exclusion of many patients with disorders that require some type of treatment (ADHD, Conduct Disorder, Dysthymia)

Demand for Psychiatrists Continues to Grow The Bureau of Health Professions predicts that demand for General Psychiatry services will increase nearly 20% between 1995 and 2020 100% increase in the need for Child and Adolescent Psychiatry

Supply of Psychiatrists has been flat for 20+ years The top graph shows that the number of residents per year in US psychiatric programs has been flat over the past 20+ years. (data from 98-99 are missing); This is in contrast to a linear increase in the number of physicians overall (bottom graph). Note: there has been a linear increase in number of physicians overall during this time

Current Psychiatrists are Aging Out Fast Percent of MD’s by Specialty over age 55 Off all sub-specialties (35), Psychiatry is second oldest (Second only to Preventive Medicine) 55% of current psychiatrist are > age 55 The aging out phenomenon is of particular concern. Psychiatry is the second oldest of all medical specialties, with more than half of all current psychiatrists over age 55.

Projected Supply and Demand of All Physicians 2010 - 2025 There is currently less of a gap between need and supply across all physicians, than there is in psychiatry or other mental health professionals However, projections clearly suggest that need will outpace supply for all physicians over the next few decades.– This is the expected gap between supply and demand for physicians across all specialties over the next 15 years. Source: AAMC Center for Workforce Studies, June 2010 Analysis

Anticipated Supply and Demand of Psychiatrists? Anticipated Demand The concern for mental health professionals, especially psychiatrists, is that the increase in demand is going to be steeper, and the supply is going to be flat, at best. Indeed there is a real concern that if recruitment does not improve, that supply will DECREASE rather than remain flat. ? Anticipated Supply Time

So, what to do… There is NO one magic bullet More and larger “help wanted” signs won’t work Warm bodies with prescription pads won’t work Locums Tenens isn’t “the solution” Tele-psychiatry isn’t “the solution”

Collaboration Models Clearly must change the way we do business Primary Care Physicians with Consulting Psychiatrist Advanced Practice Nurse Practitioners as LIPs with Collaborating Psychiatrists (practice agreements or prescriptive agreements) Psychologists with Supervising Psychiatrists Physician Assistants as psychiatrists’ extenders

Potential Options and Concerns Primary Care Physicians take on more psychiatric patients – already overloaded and not doing the best job in treating people with psychiatric problems Train more Psychiatrist – $100,000 per residency slot (times 45,000 = $4.5B) Train more APRNs and Physician Assistants in Psychiatry – very little training in psychology or psychotherapy Psychologists Prescribing Authority – What is “adequate training” in basic science medicine and clinical science medicine to prescribe?

Benefits of Co-Location and Integration Patients prefer it Percent complying with a referral rises from 15-20% to 40-60% Builds personal relationships – the foundation of any enduring arrangement Allows more accurate understanding of each other’s incentives, methods and constraints Opportunities for informal consultation Single clinical record reduces errors Facilitates converting BH clinicians into consultants to PCPs

Integration with Primary Care Expands Access to Psychiatry Another Pilot Program with a N of 1

Background More Psychiatric Medications are prescribed in primary care than in Specialty BH clinics Community Health Centers (CHC = FQHC) 1200 CHCs serve 20M patients of whom 38% are minorities and including 20% of all uninsured All must have a plan to meet BH needs, 71% provide BH services totaling 4.7 M visits annually Primary focus has been Depression Static or shrinking Psychiatrist workforce and increasing demand Health Care Reform emphasizes on Primary Care

University Clinic & CMHC Practice Over 10 years duration Patient Volume – small and static Never saw PCP or Patients-in-waiting Model Initial Evaluation all in one visit of 90-120 min Med visit w/ a little therapy 20-39 minute duration Every 1-4 weeks Termination criteria - death or disappearance

Phase 1 –Co-Location Into the FQHC Two years duration Model Got my office in the corner PCP refers them, I evaluate and keep them Evaluations 60 min, return visits 20 min Outcomes Patient volumes a little larger but still static Get to regularly come across PCPs and Patients-in-Waiting who are unhappy about lack of access 3 month wait list and 30 % no-show rate

Talk a different language with unfamiliar colleagues

Phase 2 Desperation Duration – 1 year Method – Squeeze Down the appt times Initial Eval 30 min – Learn and do just enough to get to a 2nd visit Return Visits 15 Mins Outcomes 33% increase in caseload Case load static again 6 months later Running really fast but not getting ahead

Phase 3 – Enhancing Access by Consultation Duration 3 years Two New Consult Access Methods Interrupt me if it’s urgent and brief Separate Wait Lists Rapid access to one time consult visit Regular wait list for ongoing care Outcomes Moderately larger patient volumes Consult service turns over constantly

Phase 4 – The PCPs Catch on to Me Duration 2 years The Power of See One- Do One- Teach One PCPs see my usual prescribing pattern by diagnosis in our common EMR PCPs practice implementing my recommendations PCPs see me interview during interruptive consults Outcomes PCPs decide that they will try my 1st 3 moves before referral Referral pressure drops I get more phone calls for curbside advice

Phase 5 - We Leave the Nest Duration 3 years Method Add a collaborative Psychiatric APN Convert to Open Access Scheduling Refer all ongoing patients back to APN or PCPs unless acutely unstable or scary to APN and PCPs Outcome 2-3 week wait max can always fit urgent in next week Much higher patient volume No Shows down to 10%

Breath vs. Depth Choices Which Patients do You have a Duty To? Give the best to a few Give minimally adequate to many Which Patients do You have a Duty To? The ones on your case load now The rest in your community waiting to get in

Psychiatrist View of Working in Primary Care Clinics Advantages Can treat many more patients Working more often at top of their expertise Immediate access to MD records of prior treatment Lots more support of practice Nurses – verbal orders, refill protocols, do EKGs, 1st on call PCP - consults, handles CS refills, reads EKG, 2nd on call Labs, pulse-ox, EKGs, scheduling specialty referrals Problems Intermittent Consultant, not an ongoing relationship New Culture – interruptions and variable appt times Less access to CMHC specialty services and BH colleagues PCPs start controlled substances then refer to Psychiatrist

Consumer View of Getting BH Services in Primary Care Clinics Advantages Easier Access, more available appts, shorter waits Attention to the Medical causes of BH symptoms Getting Medical Care including healthy lifestyle advice Relation ship less fear based than with psychiatrist Problems Know less about Dx & Tx of BH illness other than Depression and Anxiety Medical Culture, Not familiar with Recovery concepts Less awareness of and access to non-Med interventions Don’t use comprehensive Bio-Psycho-Social Assessment

When you make a choice, you change the future. Status of our world… www.thenationalcouncil.org Status of our world… When you make a choice, you change the future. Deepak Chopra Contact: communications@thenationalcouncil.org | 202.684.7457

Because we know that the healthcare system of the near future will not look much like the present. And the implications for our members and those they serve are enormous.

Struggles… Moving from special silo status to equality; from incremental improvement to fast paced change Disconnected from the rest of the healthcare ecosystem Small independent organizations with small margins Not effectively addressed divide between mental health and substance use Image of not having timely access to care Limited capital for new service lines and HIT infrastructure

Fee for Service is headed towards extinction Health Care Home models are beginning with a 3-layer funding design with the goal of the FFS layer shrinking over time Being replaced with case rate or capitation with a pay for performance layer Payment mechanisms will be tied to these measures in a variety of ways. Bundled payments that only pay for part of potentially avoidable complications (PACs) will penalize providers that have higher error rates. CBHOs that don’t have structures and staffing to provide effective prevention and early intervention services and manage chronic health conditions will not be eligible for case rates and capacity-based payments to fund that work. CBHOs that don’t hit performance measure targets will not earn their bonuses. A related issue from above is whether existing carve-out plans that have worked closely with CBHOs to develop innovative payment mechanisms such as sub-capitation, case rates, risk corridors with bonuses, etc. will still be in business in the near future. Should CBHO groups and existing behavioral health carve-outs look to align/merge with health plans such as members of the Association for Community Affiliated Plans? What other strategies could be used to ensure their survival?

Episodic Cost Accountability Total Cost Accountability Full Risk Partial Risk Shared Savings Bundled Payments Traditional Fee-for-Service Pay-for-Performance Shared Savings Minimal Savings Potential for Health Plans and Customers Substantial Source: The Advisory Board Company: Accountable Care Forum-Briefing for Health Plan Executives

Behavioral Health Organizations Integrated Practice Units – treat disease and all related conditions, complications and circumstances Outcomes Based Care – measure full set of outcomes and costs for every patient Bundled Payments –acute care cycle; yearly care for chronic condition Expand Across Geography – affiliations, mergers and acquisitions = volume Integrate Across Facilities – determine scope of service; and standardize care across sites Enabling Technology Platform – enable measurement; new reimbursement approaches; tie delivery system together 94

Organize into Integrated Practice Units 95

Merge and Consolidate Monopoly Economy

Produce measurable outcomes Episodic care Treat to target Solution-focused therapy British CBT Use of standardized tools to measure improvement in symptoms, functioning, resilience and recovery Don’t be afraid to embrace new approaches to treatment!

Integrate Care Delivery Systems Most multisite organizations are not true delivery systems, at least thus far, but loose confederations of largely stand-alone units that often duplicate services. To achieve true system integration, organizations must grapple with four related sets of choices: defining the scope of services, concentrating volume in fewer locations, choosing the right location for each service line, and integrating care for patients across locations.

Accountable Care Organizations Medicare Shared Savings Program Pioneer Program Commercial Payers Public Sector Private Sector Hospital groups, physician groups and commercial payers most common 25 to 31 million Americans currently receive healthcare through ACOs 2.4 MM in Medicare ACOs 15MM non-Medicare patients of Medicare ACOs 8 to 14 MM Patients of non-Medicare ACOs Sources: Market Trends in ACO formation, OPTUM; The ACO Surprise, Oliver Wyman

Other emerging trends Elimination of ‘Safety Net’ Funding For Uninsured Decrease of Fee-For-Service Rates Medicaid or Medicare Coverage of SPMI Moved To Managed Care or ACOs Expanding Role of Urgent Care Clinics in Community Payers Increase Coverage of E-Health Services & Remote Monitoring Responsibility for Health Outcomes and Costs of Defined Populations Mandatory Adoption of EBP Via Comparative Effectiveness Research Medication Assisted Treatments for Addictive Disorders Widespread Adoption of Neurotech (Scans, Avatars, Cognitive Retraining…)

Medicaid Emergency Psychiatric Demonstration Project Section 2707 of ACA Allows IMDs to bill Medicaid at usual rate for persons 19-64 y.o. $75 M Federal funds plus usual state match 12 states with 27 IMDs participating Planned to run 3 years –began July 2012, Authorization ends Dec, 2015 December 2013 Mandated Report (18 months) – Status 3458 admissions , 2791 patients, 84% had 1 admission Ave LOS = 7 days, 84% discharged home Ave per diem $911 Way under budget – half way through allotted time has used 25% of funding December 2013 Mandated Report (18 months) Recommendations Too little data to recommend expanding Extend Demonstration past December, 2015

DSH REDUCTION CRISIS in ADULT PSYCHIATRIC INPATIENT BEDS: FOUR MISSOURI COMMUNITY HOSPITAL EXAMPLES # of Total Hospital Beds # of Adult Psychiatric Inpatient Beds % of all Hospital’s Patients who are Uninsured % of Adult Psychiatric Patients who are Uninsured % of Hospital’s Total Indigent Care Days Accrued on Adult Psych Units Cox Health-Springfield 646 42 9.0% 30.9% 23.8% SSM St. Joseph Health Center-St. Charles/Wentzville 331 61 9.4% 28.8% 58.2% Truman Medical Center-Lakewood 310 28 17.9% 23.7% 46.7% Twin Rivers Regional Medical Center-Kennett 116 12 6.7% 18.2% 52.2%