Integrating Behavioral Health Under an ACO Global Budget: Barriers and Progress in Oregon

Study Design: Cross-case comparative study.

Methods: We conducted a cross-case comparative study of 5 diverse CCOs in Oregon. We interviewed key stakeholders: CCO leaders, practice leaders, and primary care and behavioral health clinicians. A multidisciplinary team analyzed data using an immersion-crystallization approach. Financial barriers to integrating care and strategies to address them emerged from this analysis. Findings were member-checked with a CCO integration workgroup to ensure wider applicability.

Results: State legislation that initiated CCOs promoted integration expansion. CCOs, however, struggled to create sustainable funding mechanisms to support integration. This was due to regulatory and financial silos that persisted despite CCO global budget formation; concerns about actuarial soundness that limited reasonable, yet creative, uses of federal funds to support integration; and billing difficulties connected to licensing and documentation requirements for behavioral and mental health providers. Despite these barriers, CCOs, with the help of the state, supported expanding integrated care in primary care by using state funds to pilot test integration models and to promote alternative payment methodologies.

Conclusions: Oregon’s CCO mandate included a focus on better integrating medical and behavioral healthcare for Medicaid recipients. Despite this intention, challenges exist in the financing of integration, many of which state and federal leaders can address through payment and regulatory reform.

Am J Manag Care. 2017;23(9):e303-e309

ABSTRACTObjectives: This study describes challenges that coordinated care organizations (CCOs), a version of accountable care organizations, experienced when attempting to finance integrated care for Medicaid recipients in Oregon and the strategies they developed to address these barriers.Takeaway Points

Medicaid accountable care organizations (ACOs) face financial and regulatory barriers when integrating behavioral healthcare; however, opportunities remain for supporting and expanding integration despite these constraints. This work provides organization- and practice-level details of financial ACO barriers that have not been shown before.

• States can promote behavioral health integration among Medicaid ACOs by providing technical assistance to help ACOs leverage global budgets.
• Medicaid ACOs also must promote integration by investing in early pilot projects and internally reorganizing payment models.
• Consistent integration financing regulation across payers is needed.

Mental illness, substance use conditions, health behavior change, life stressors and crises, and stress-related physical symptoms—together referred to as behavioral health—are prevalent in primary care settings.^1,2 Left untreated, behavioral health problems increase morbidity and healthcare utilization.^3,4 Evidence suggests that patient experience and outcomes improve and costs are contained when behavioral and medical problems are addressed together.^5-9

Under the Affordable Care Act, new organizations, such as accountable care organizations (ACOs), have emerged. ACOs are groups of doctors, hospitals, and other healthcare organizations that partner to develop contractual arrangements and innovative payment methods (eg, global budgets) that encourage integration and aim to achieve better quality, improved patient experience, and lower costs.^10,11 Despite responsibility for behavioral health, however, fewer than 15% of ACOs have integrated behavioral health and medical care, with one-third having no formal relationship with behavioral health provider groups.¹² This suggests there may be missed opportunities for ACOs to create systems to support integrated, whole-person care.¹³

Few studies have explored how ACOs support integration.¹⁴ Here, we examine the integration experiences of Medicaid ACOs in Oregon. We focus on Oregon because integrating behavioral health and medical care was an explicit mandate in the state legislation that created Oregon’s Medicaid ACOs, called coordinated care organizations (CCOs). Among CCOs, this mandate increased efforts and investment in integration over the past 2 or more years. We studied the challenges CCOs faced in financing integration and the strategies they developed to support integrated care.

METHODS

Setting

In 2012, Oregon passed legislation creating 16 CCOs across the state through its Medicaid Section 1115 demonstration waiver. This waiver required CCOs to operate within an annual global budget, providing medical and behavioral healthcare to Medicaid beneficiaries (the state added oral health in 2014) and mandated a reduction in the Medicaid spending growth rate without a reduction in quality. Prespecified quality benchmarks were set, with upside and downside financial risk depending on whether or not CCOs met them.^15,16 These features were intended to create a supportive environment for integrating behavioral and primary care, and these methods resembled regulatory mechanisms and financial incentives employed in other states.^17,18

Sample

We purposively selected 5 of the 16 CCOs to participate in this study. The Oregon Health Authority (OHA) knew which CCOs were working on integration. With their help, we selected CCOs that were taking steps to integrate care for their region. We used an iterative sampling process, selecting 1 CCO, collecting and analyzing data, then using this information to inform subsequent CCO selection to ensure maximum variation in our sample and to monitor when saturation—the point at which no new findings emerged from the data—was reached.

Data Collection

Between April and October 2014, we conducted 1-on-1 semi-structured interviews with 4 to 10 key stakeholders at each CCO (n = 33). We selected stakeholders to represent a range of viewpoints on CCO activities and included CCO leaders (n = 19) and primary care and behavioral health clinicians (n = 14). A multidisciplinary research team developed the interview guide (see eAppendix [eAppendices available at ajmc.com]) and conducted 1-hour interviews, most of which were conducted in person. Eight interviews were conducted over the telephone to accommodate scheduling. Upon completing interviews at each CCO, we debriefed to formulate preliminary thinking and select the next CCO for study. We made additions to the interview guide when new topic areas emerged during the interviews.

Data Management

Interviews were audio-recorded, professionally transcribed, de-identified, and entered into Atlas.ti version 7.0 (Atlas.ti Scientific Software Development GmbH; Berlin, Germany) for analysis. The Institutional Review Board at Oregon Health & Science University approved this study protocol.

Data Analysis

We used an immersion-crystallization approach whereby our research team analyzed the data, without a priori presuppositions of what was important and why, and continued this process until themes or a patterned set of findings emerged.¹⁹ First, the team analyzed data for each CCO. We did this together, discussing key interview passages and, giving them a name, ultimately developed a code list. When codes and definitions were clear, and we applied them similarly during analysis (after reviewing approximately one-third of the data together), we transitioned to having 3 study team members independently code the remaining data, holding weekly meetings to ensure reliability, discuss analytical questions, and identify emerging findings.

Second, the team conducted a cross-CCO analysis, examining how themes manifested across CCOs. We developed a matrix to compare CCOs on dimensions that were emerging as important (eg, integration approach, access to psychiatry and other specialty services, challenges in financing integration). This table included characteristics of the CCO (eg, size of CCO, organizational structure, location). Finally, we prepared preliminary findings and shared them with a leadership group of clinicians and managers with hands-on experience integrating care who represented CCOs across Oregon. This allowed us to member-check and assured the transportability of findings. Stakeholders agreed that the presented findings aligned with their experience and helped us identify areas where more details were needed. We re-analyzed our data and followed up with key informants, as needed, to refine the results.

RESULTS

As shown in Table 1, CCOs varied in size, organizational structure, geographic location, and experience with integration. We conducted interviews with key stakeholders at each CCO. Table 2 shows the number of interviews and selected stakeholders within each CCO, with variations shaped by CCO organizational structure, size, and presence of integration infrastructure. We found that some CCOs were planning their integration efforts, while others were experimenting with fully integrated clinics and alternative payment models (APMs).

Practices within CCOs were reorganizing care delivery in several ways. As Table 3 shows, CCOs were contracting with community mental health centers (CMHCs) or other mental health organizations to embed mental health providers in regional schools; primary care clinics were bringing behavioral health clinicians (BHCs) onsite by hiring them directly or contracting with local mental health organizations; CMHCs did the same with primary care clinicians. In our interviews, stakeholders rarely described implementing specific integration models (eg, the collaborative care model); they defined behavioral health more generally, at times including mental health and substance use, and described the role of brief interventions by BHCs in primary care clinics and the delivery of basic primary care in CMHCs. With regard to access to psychiatric services, primary care stakeholders acknowledged that a small portion of their population needed these services, but psychiatric services were scarce. CCOs and practices were developing pathways to psychiatry for their patients, either through virtual connections (eg, telepsychiatry), consultation models, or by developing stronger relationships with regional mental health organizations that employed psychiatrists.

Stakeholders expressed widespread support for integration and optimism for global budgets to promote it: “What I’m hoping is that the CCO model will allow for some increased flexibility where we can just use our global budget to put the money where we think…there’ll be a payoff for the Triple Aim” (CCO 2, behavioral health director). We found, however, that CCOs’ new global budgets had not yet yielded this hoped-for flexibility to remodel care, and those CCOs and clinicians faced barriers to integration.

CCO Barriers to Integration

CCO stakeholders reported similar barriers to integrating behavioral health and medical care. These included structural financial barriers rooted in pre-CCO contracts, regulatory restrictions that affected reimbursement, and federal limitations on flexible funds, which some CCOs planned to use for integration. Table 4 summarizes these barriers, which we describe in more detail below.

Pre-CCO contract structures and silos. Despite the introduction of global budgets, respondents described care delivery systems in which pre-CCO contract structures remained largely intact. In these structures, primary care, mental health, and substance abuse treatment organizations provided care separately, operating with independent funding sources, coding and billing systems, documentation requirements, and provider licensing and credentialing systems: “For so long it has been: ‘Here’s the funding for medical, here’s the funding for substance abuse, and here’s the funding for mental health.’ The idea was that those silos would go away. And that still has not happened. So the frustrating part is we all come to the table to coordinate care around a specific individual, and we’re still stuck in these silos” (CCO 1, CMHC clinical director).

Other CCO stakeholders shared similar experiences. Specifically, funding earmarked for CMHCs continued, in most cases, to pass through pre-CCO structures: “Mental health is primarily provided by the county. And a large portion, like 88%, of what the CCO gets from the state for behavioral health is just passed on through to the county” (CCO 3, director of integration).

One reason historical structures remained intact was that mental health and primary care organizations had not previously worked together or built relationships to negotiate structural changes and contracts were sensitive topics and difficult to change. There was a fear that if CCOs directed more funding to primary care for behavioral health services, this would further deplete funding organizations that serve patients with more severe and persistent mental illness. For these reasons, pre-CCO contracts and structures persisted in the new system.

Licensing restrictions and reimbursement. Stakeholders trying to integrate care described a range of licensing, credentialing, and billing restrictions that made it difficult for clinics to receive reimbursement for providing integrated care. These barriers manifested differently based on the setting and integration approach.

Most primary care practices approached integration in 1 of 2 ways: hiring a BHC or contracting for their services with a CMHC. To bill for services, practices had to hire licensed BHCs. Participants reported that reimbursement rates using traditional billing codes did not cover costs: “The reimbursements are just miserable…Some of the clinics are getting [a] 30% return on the billable services” (CCO 3, behavioral health director). At the time of this study, only CCO 5 described exploring options for increasing reimbursement rates for these codes.

A second approach to integration was to contract with a CMHC to embed a BHC in a primary care practice; the BHC remained the employee of the CMHC. In this arrangement, unlicensed BHCs could bill because they operated under the remote supervision of a licensed provider at the CMHC: “We can have someone with a bachelor’s degree providing a Medicaid service. We can [bill] Medicaid on that because the assessment and the treatment plan are set up and collect a certain boatload of data, or information, and is signed off on by both a licensed clinician and a licensed healthcare provider, like a doctor, within certain timeframes” (CCO 4, CMHC director).

However, this approach limited other integration activities, such as warm hand-offs and brief interventions, because it required BHCs to complete lengthy intake assessments to satisfy CMHC documentation requirements. Diagnosis and medical justification were required for billing, and participants found these federal documentation requirements incompatible with primary care clinics’ desired integration model, which focused on brief interventions by BHCs.

Federal limitations on funding flexibility within global budgets. The Oregon Medicaid waiver allowed CCOs to pay for nonbillable services without traditionally required encounter and billing data.¹⁵ Federal actuarial reviews, however, required these data to prove that Medicaid capitated rates were actuarially sound. CCO stakeholders were concerned about defending their use of flexible funds for integration without assurances that traditional billing codes and encounter level data would not be required: “…What really can be considered a flexible service? And that’s a real problem. And whether or not that’s going to be defensible under the actuarial soundness reviews” (CCO 3, CMHC director). Participants heard contradictory messages from the federal government regarding flexible fund use that included both a requirement to comply with actuarial regulations and an understanding that integration requires regulatory flexibility. CCO leaders feared losing funding or being penalized if they were unable to justify integrated services during these reviews.

CCO Support for Integration

In response to these barriers, stakeholders reported that CCOs were facilitating integration through financing experimentation, allowing practices to explore new care models, and mitigating the immediate need to bill for services.

Integration Financing Experimentation

CCOs were exploring ways to fund integration, which included grant funding, traditional fee-for-service billing, experimentation with APMs, and lobbying the state to “open” (reimburse for) additional billing codes to finance integration. The most common strategy for supporting integration was grant funding. CCOs relied on grants to jump-start integration efforts and circumnavigate financial barriers. Much of this funding came via state general funds allocated by the legislature in 2013, often referred to as “transformation” funds. One CCO used these funds to hire BHCs within its primary care practices. Another CCO paid for part of a psychiatrist’s salary to provide nonbillable consultation services. Participants from CCOs that used grant funding to finance integration voiced concerns about sustainability: “We’ve got to figure out how these positions can somehow pay for themselves…The transformation grant money is going to run out at some point, and the trick is to try to show that these things are worth it in some way, to have somebody keep paying for it” (CCO 4, CCO medical director). They worried that funding would end before payment systems within CCOs adapted to support integrated care.

Stakeholders reported that CCOs were facilitating the transition from grant funding toward APMs. One CCO administrator described their role as follows: “I think people know, clinically, that [integration] is what we want and what’s best for our folks. It’s hard sometimes, though, to get the financial [aligned] with the clinical need. That’s a real big way that the CCO is empowering providers, by giving them the financial glide path to begin this process while the CCO really looks at completely revamping how Medicaid reimbursement happens” (CCO 3, director of integration).

CCOs created this “financial glide path” in different ways. One CCO used funds previously funneled back to practices as a bonus payment to pay them for unbillable integration components while asking them to collect data that could inform the transition to APMs in the future: “[The practices] will test the integration model and will test a per-member-per-month payment approach and help us move…[to] get more ready to throw that switch and say, ‘This is how we’re going to pay everyone’” (CCO 5, behavioral health director).

Another CCO created a tiered system for primary care practices. Higher-tier practices, farther along the medical home transformation process, had greater opportunity for advanced payment, while lower-tier practices received more CCO financial support. The goal of such programs was to advance clinics toward more sustainable integration models and payment structures.

DISCUSSION

ACOs offer the potential for improved care by promoting alternative payment structures that remove traditional silos between medical and behavioral healthcare. Our study demonstrates this potential and highlights the complexities involved in executing this transformation. Global budgets, intended to provide flexibility for APMs and improve sustainability of integration efforts,¹⁶ confront numerous barriers, including preexisting contract structures, differing views about blending budgets, licensing and documentation requirements, and unclear billing rules for flexible payments. Despite differences across the CCOs, stakeholders reported experiencing similar barriers to exploring new payment models in the early years, and integration efforts relied heavily on short-term grant funding to support experimentation. These findings expand on previous work by Lewis et al, which described the lack of behavioral health integration in ACOs by providing insight into the challenges slowing adoption across ACOs in the United States.¹²

In managing ACO reform, we observed tension between promoting local autonomy and the need for state intervention or assistance. Advocacy with federal leaders may be the state’s role, but our study’s results suggest that to address integration barriers, ACOs must prioritize and promote integration, using their own funds to support this transition. This requires collaborating with both the state and provider groups to identify financing approaches, both gradual and expedited, to accommodate the varying levels of delivery system and alternative payment readiness among practices.

Research and policy interventions can help address integration obstacles. This includes research to understand how to expand integration within ACOs that have shown less interest, policy changes that provide technical assistance to help CCOs leverage global budgets, incentives to expand integration, and state advocacy with federal leaders to refine flexible spending requirements. In addition, leaders can shape payer policies and payment structures across payers to create consistency and minimize the extent to which ACOs responsible for Medicaid patients are not subsidizing integration for other payers.

Limitations

ACO programs and state policies are rapidly changing, and our findings represent an early view of integration that may have changed since we conducted this study. In addition, there were many simultaneous changes occurring in this environment. For instance, Federally Qualified Health Centers in Oregon were experimenting with APMs, and this shaped practices’ integration efforts.

To the extent possible, we took steps to separate CCO efforts from other state innovations. The majority of CCOs in our sample were motivated to integrate care. Although this is a near-perfect sample for studying the barriers to integrating care, we need more research directed at studying ACOs that are not integrating care as quickly.

We also found that specific integration models were not being implemented by CCOs or their affiliated practices. It is likely that practices do not implement a specific integration approach; they tend to adapt models to fit their unique circumstances and settings.²⁰ Yet, Oregon passed legislation in 2015 (S.B. 832) directing OHA to use the bill’s definition of integration to develop standards for certified primary care homes and behavioral health homes integrating care, suggesting that some requirements for integration implementation are needed. Future research could examine how this legislation leads to changes in integration approaches implemented among practices.

Finally, the sample of people we interviewed did not include substance use providers, as this group was not yet centrally involved with CCO integration efforts. More research is needed to understand the silos that exist for substance use services in ACOs.

CONCLUSIONS

Oregon’s CCO global budgets do not eliminate long-standing silos between behavioral and primary healthcare, nor do they create financial or organizational flexibility for clinics, where it matters most. We need systemic reform in the United States to expand alternative payment methods at the clinic level and support the provision of truly integrated whole-patient care.Author Affiliations: Massachusetts General Hospital Global Clinical Education Fellow (JKR), Boston, MA; Department of Family Medicine (JDH, DCC, DJC), and Center for Health Systems Effectiveness (RR), Oregon Health & Science University, Portland, OR.

Source of Funding: The State of Oregon, Oregon Health Authority, contract 1005404, supported this work.

Author Disclosures: The authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design (JKR, JDH, DJC); acquisition of data (JKR, JDH, DCC, DJC); analysis and interpretation of data (JKR, JDH, DCC, RR, DJC); drafting of the manuscript (JKR, JDH, DCC, RR, DJC); critical revision of the manuscript for important intellectual content (JKR, JDH, RR, DJC); obtaining funding (DJC); administrative, technical, or logistic support (JDH); and supervision (DJC).

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