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Dale Jarvis

Dale Jarvis and Associates

The CCBHC Monthly Rate Setting Math Problem

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There are many accountant types like myself who can’t wait to dig into the Certified Community Behavioral Health Clinic (CCBHC) Prospective Payment System (PPS) process. But equally important are the non-accountants who need to gain a basic understanding of CCBHC PPS in order to begin planning for the program. If you fall into either category (accountant or non-accountant), this blog post is for you!


Daily and Monthly PPS Rates

States that will be participating in the CCBHC program must select either a Daily PPS Rate or a Monthly PPS Rate method that will be used to pay clinics for CCBHC services provided to Medicaid enrollees. Once a state has selected the Daily or Monthly Rate, it needs to set up a Cost Reporting structure that supports calculating customized rates for each CCBHC. The Cost Report allows a clinic to determine their allowable costs, which are then divided by:

  1. The estimated number of visits that will be provided in a year to arrive at a Daily PPS Rate; or
  2. The estimated number of clients that will be seen each month to arrive at the Monthly PPS Rate.

The following table provides a simple example of this math problem.

Daily Rate

Monthly Rate

CCBHC Annual Budget


CCBHC Monthly Budget


Annual Medicaid Visits


Monthly Clients Served


Daily PPS Rate


Monthly PPS Rate


More about the Monthly PPS Rate

Because client acuity level at a CCBHC may change from year to year, the CCBHC program has been designed to allow states to pay higher rates for certain populations that have higher costs. The CCBHC guidance provides five examples:

  • Adults with serious mental illness
  • Adults with serious mental illness and co-occurring substance use disorders
  • Children and adolescents with serious emotional disturbance
  • Individuals with a recent history of frequent hospitalizations related to behavioral health conditions
  • Adults with significant substance abuse disorders (SUDs)

Let’s build on the Monthly Rate math problem to illustrate how this might work.

Average Monthly Clients

Average Monthly Visits per Client

Average Cost per Visit

Average Monthly Cost per Client

Total Monthly Cost

Adults with SMI






Adults with SMI and COD






Youth with SED






Individuals with Frequent BH Hospitalizations






Adults with significant SUD






Everyone Else










Note that the above table has the same basic ‘ingredients’ as the simple example: Monthly Budget ($100,000), Clients (200), and cost per visit ($120). Also note that if you divide the Total Monthly Cost by the Average Monthly Clients, you get the same Average Monthly PPS Rate ($100,000 divided by 200 = $500).

The difference? Additional detail is collected for individuals in each severity category: number of clients, average visits, and average cost per visit.

Important PPS Tidbits

One Visit Trigger: An individual must receive at least one visit in a month to trigger the Monthly PPS Rate.

Cost Report Categories: A state’s Cost Report template will need to include the following five cost categories:

  1. Direct Costs – Staff
  2. Direct Costs – Other
  3. Overhead Costs – Facility and Administrative
  4. Costs Incurred for Non-CCBHC Services
  5. Costs Incurred that are Not Reimbursable by Medicaid (e.g., lobbying and entertainment)

Designated Collaborating Organizations: The CCBHC program allows for the cost of care associated with Designated Collaborating Organizations (DCOs) to be included in the PPS Rates. DCOs are partner agencies to CCBHCs that have a formal relationship with the CCBHC and deliver services under the same requirements as the CCBHC.

Quality Bonus Payments: The Daily PPS Rate can be accompanied by a Quality Bonus Payment (QBP). Quality Bonus Payments are mandatory for states that select the Monthly PPS Rate.