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Creating an integrated care business model for behavioral health

Understanding their value proposition will help behavioral health providers establish episode of care rates

To get ready to participate in integrated care funded by bundled payments, behavioral health providers need to establish a new business model, with particular emphasis on establishing episode of care rates.

“It is worth making an attempt at developing your own episode of care rate, your own bundled approach, because we have to be forward thinking,” said Jeff Capobianco, PhD, a consultant with the National Council for Behavioral Health, during a council-sponsored webinar on financing integrated care. “You have to be ready to respond to a managed care or accountable care organization that might show up in your future and say, ‘Hey, what’s your rate for treating schizophrenics with diabetes. How much does it cost you every month to treat someone like that?’ You can say, ‘On average, it costs us this much based on the research we’ve done.’”

Before behavioral health providers can tell potential partners what care will cost, they have to take some time to understand and be able to convey what their value proposition is, said Capobianco, including being able to provide outcome data related to costs.

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That understanding of outcome data and costs will not only serve as the foundation of their value proposition, it will also help behavioral health providers figure out how to set episode of care rates.

To set an episode of care rate, behavioral health providers need to do some footwork to understand what an episode of care looks like, said Capobianco – what diagnoses will be addressed, what services are associated with those conditions and how long the care will take for the conditions.

Behavioral health providers should look to their own historical cost data, research the literature and check in with primary care provider partners for data on physical care.

Importantly, when determining rates, behavioral health providers need to factor in overhead costs that aren’t billable, but contribute to the overall episode of care. With bundled payment, providers will have to spread the payment to cover every aspect of delivering care.

“You’re going to have to do some math around the fact that good case management or care management includes providing all the care for that person for all the conditions,” Capobianco said.

Providers need to keep in mind that rates in the bundled care model will be lower than fee-for-service payments because the bundled rates are based on averages, said Capobianco. Behavioral health providers may also need to partner with other behavioral health providers in order to have the scale to offer competitive rates.