Skip to content
The National Council logo

Getting Paid as a CCBHC

Overview|Resource Hub | Contracting & Community Partnerships Toolkit|Getting Paid as a CCBHC|Consultants

 

Certified Community Behavioral Health Clinics will benefit from a Prospective Payment System (PPS)—a Medicaid payment methodology that allows providers to be reimbursed based on their anticipated costs of offering CCBHC services. PPS allows providers to establish an average, daily or monthly encounter rate that is inclusive of all current and anticipated costs of care as a CCBHC, including new service lines, staff salaries, technology costs, services delivered outside the four walls of the clinic, and more. It is a more comprehensive reimbursement model than FFS, providing a sound, predictable, and sustainable footing for CCBHC operations now and into the future.

 

Quick Reference: Resources from the National Council

  • Compliance Hotspots for CCBHCs: Establishing a Base Year Rate
    This article from the National Council’s Compliance Watch, written by attorney Susannah Vance Gopalan of Feldesman Tucker Leifer Fidell, explores considerations for setting a sound rate during the CCBHC planning year. Learn key considerations for calculating your allowable vs. un-allowable costs, allocating clinician salaries and overhead, and accurately capturing all encounters. For more on compliance and CCBHCs, subscribe to Compliance Watch.
  • Slide Presentation – Compliance Hotspots for CCBHCs: Establishing a Base Year Rate
    Additionally, on January 26, 2016 Susannah Vance Gopalan participated in a webinar hosted by The National Council that goes into greater detail about establishing a base year rate.  You can review the slides or watch the entire presentation.
  • Emerging Compliance Hotspots for CCBHCs: Billing Medicaid
    This article from the National Council’s Compliance Watch, written by attorney Susannah Vance Gopalan of Feldesman Tucker Leifer Fidell, explores new administrative requirements that will be imposed on Certified Community Behavioral Health Clinics (CCBHCs) as they move to a prospective payment system (PPS).  Learn how these changes will affect you and your business. The article also provides an in-depth look at compliance issues that may stem from billing Medicaid for CCBHC services and services provided under managed care. For more on compliance and CCBHCs, subscribe to Compliance Watch.
  • Slide Presentation – Emerging Compliance Hotspots for CCBHCs: Billing Medicaid
    Additionally, on February 10, 2016 Susannah Vance Gopalan participated in a webinar hosted by The National Council that goes into greater detail about the process for billing Medicaid under a PPS.  You can review the slides or watch the entire presentation.
  • Getting Paid as a CCBHC: Cost Reporting Principles
    At The National Council conference in March 2016 there was a special presentation by Susannah Vance Gopalan, of Feldesman Tucker Leifer Fidell and Steve Khohler, of McBee Associates that provides an overview of PPS and dives into strategies for cost reporting.  Download the slides and PDF from our National Conference to learn more.

What is a PPS?

The new Prospective Payment System (PPS) for CCBHCs finally puts behavioral health organizations on equal footing with other partners in the health care safety net. Federally Qualified Health Centers and other types of health care organizations have benefited from various prospective payment systems for decades, but the concept and principles of PPS are new territory for most community behavioral health organizations.

PPS is essentially an average payment based on the actual costs a clinic incurs during the course of a year. In broad terms, here’s how it works:

  • Through a cost report, clinics collect information on ALL costs incurred by the clinic for providing services to ALL patients. (Note that only allowable costs are included; for example, the cost report for a Medicaid PPS does not include the costs of providing residential treatment in facilities of more than 16 beds because those costs are unallowable in Medicaid.)
  • The total costs of providing care (the numerator) are then divided by the total number of designated encounters during a year (the denominator) to arrive at a per-encounter payment rate.
  • Each time a designated encounter occurs, the clinic receives a payment. The payment is the same regardless of the intensity of services the patient receives.

How does PPS work for CCBHCs?

The federal guidance for CCBHCs’ PPS has several unique features. First, states have the option to choose whether they will select a daily, per-encounter rate (known as PPS-1) or a single monthly rate for any client who received services during that month (known as PPS-2). See below for more details about each type of PPS. Second, CCBHCs must include the costs of any care provided by their Designated Collaborating Organizations in their cost report used to calculate the PPS payment. Each time an encounter occurs at a DCO, the DCO must transmit information about that encounter to the CCBHC, which serves as the billing provider for the service. In this way, CCBHCs receive the PPS rate for services provided at other organizations. For more on the billing relationship between CCBHCs and DCOs, see our DCO toolkit.

Tell me more about PPS-1, the daily rate.

PPS-1 is very similar to the PPS currently used by Federally Qualified Health Centers and is administratively less complex than PPS-2. Here’s how it works:

  • The CCBHC compiles a cost report including all allowable direct and indirect costs of providing CCBHC services to all patients. This is the numerator of the fraction. Note: the cost report may include anticipated costs of providing CCBHC services that the clinic does not already provide.
  • The CCBHC calculates the number of daily encounters, including all patients who receive care at the clinic. This is the denominator of the fraction. Note: each state will define what constitutes an “encounter” for the purposes of establishing the rate. An encounter could include an in-person visit at a clinic, a meeting with a case manager in a patient’s home, a visit that takes place via telehealth, or other types of encounters. CCBHCs should work with their states to understand each state’s approach to defining an encounter and its impact on the CCBHC rate.
  • The CCBHC divides the total costs of care (the numerator) by the total number of daily encounters (the denominator) to calculate the per-encounter visit.
  • Each day a patient has one or more encounters with the clinic, the clinic may draw down the PPS rate for that patient. The rate is the same regardless of intensity of services.

Additionally, states may choose to implement a system of quality bonus payments. Decisions about whether and how to structure quality bonus payments under PPS-1 are left to states’ discretion.

Tell me more about PPS-2, the monthly rate

PPS-2 is a monthly rate that is paid to clinics only in a given month when a patient actually receives services from the clinic. In this way, it is different from a per-member-per-month capitation rate used in other payment structures. PPS-2 is administratively more complex than PPS-1 but it allows clinics to access variable rates based on the needs of the patient. Here’s how it works:

  • Working with the state, the CCBHC identifies “special populations” for which it will receive a unique rate. Special populations may be designated by diagnostic profile or other needs, but not by service utilization history. For example, a special population could be individuals with a co-occurring mental health and substance use disorder.
  • The CCBHC compiles a cost report including all allowable direct and indirect costs of providing CCBHC services to all patients. Importantly, the cost report must allocate costs to specific patient populations that have been designated by the state (including each special population as well as the general CCBHC population). For indirect costs such as use of building space or maintenance of electronic health records, costs must be allocated to patient populations using a methodology determined by the state, such as a cost-to-charge ratio. Note: the cost report may include anticipated costs of providing CCBHC services that the clinic does not already provide.
  • The CCBHC calculates the number of “unduplicated monthly encounters” for patients in each special group and the general group. Each patient is counted only once per month, even if they received services on more than one day in the month. Note: each state will define what constitutes an “encounter” for the purposes of establishing the rate. An encounter could include an in-person visit at a clinic, a meeting with a case manager in a patient’s home, a visit that takes place via telehealth, or other types of encounters. CCBHCs should work with their states to understand each state’s approach to defining an encounter and its impact on the CCBHC rate.
  • For each special population and for the general population, the CCBHC will calculate a different PPS rate by dividing the total costs of care for that population (the numerator) by the total number of unduplicated monthly encounters for that population (the denominator) to calculate the per-month rate for each population.
  • Each month a patient has one or more encounters with the clinic, the clinic may draw down the PPS rate associated with that patient (e.g. his/her particular population rate). The rate is the same within each population regardless of intensity of services. Clinics do not receive a payment in a month when that patient does not receive services.

Additionally, PPS-2 states are required to implement a system of quality bonus payments. They must also establish a structure of outlier payments, detailed in the PPS guidance.

Will the PPS rate change over time?

States may choose from two options for updating CCBHCs’ payment rates between Demonstration Year 1 and Demonstration Year 2: they may either trend the rate forward using the Medicare Economic Index, or they may ask CCBHCs to go through a re-basing process in which each CCBHC would re-file its cost report and re-calculate its rate. States must determine in their application whether they will use the MEI or rebase; if they select rebasing, they will be asked to explain how CCBHC rates will be paid during the interim while the rebasing calculations are being completed.

Will I get paid the PPS rate for non-Medicaid patients?

No. CCBHCs will only receive the PPS rate for patients who are enrolled in Medicaid.

How can I finance CCBHC activities for all patients if only Medicaid will pay the PPS rate?

CCBHCs are a true safety-net provider in that they are required to serve all patients regardless of their ability to pay or place of residence. Potential CCBHCs will have to carefully examine their current and anticipated payer mix to evaluate whether becoming a CCBHC is financially viable for them. CCBHCs should also make every effort possible to enroll eligible uninsured patients into Medicaid.

How do CCBHCs get paid for patients who are insured by private insurers?

CCBHCs are required to offer the full CCBHC service array to all patients, regardless of place of residence or ability to pay. CCBHCs should bill third-party payers for covered services; however, some payers may not cover all CCBHC services. In this case, a CCBHC is still required to provide the non-covered services to privately insured patients. The CCBHC may treat patients as if they were uninsured for any non-covered services; that is, by charging them for those services based on a sliding fee scale.

Will Medicare pay the PPS rate?

No. Only Medicaid will pay the PPS rate. Medicare and other payors will continue to reimburse clinics as they have always done.

Why do I have to report costs for all patients if I can only get paid for Medicaid patients?

The PPS rate is intended to be reflective of the sum total of a clinic’s costs, many of which are not easily segregated by patients’ coverage sources.

How does PPS work in Medicaid managed care?

States have two options: 1) they may include the cost of CCBHC PPS rates into their capitated managed care contracts, with managed care companies responsible for paying CCBHCs their designated rate; or 2) they may allow CCBHCs to negotiate payments as they have always done with managed care companies and go through a periodic cost-reconciliation process in which the state would pay a wraparound payment for any shortfall in the managed care rate as compared to the PPS rate.

States and providers should work to ensure that if PPS rates are included in managed care capitation contracts, that managed care companies continue to fully include CCBHCs in their networks, refer patients to CCBHCs for services, and pass along the full PPS rate to CCBHCs.

Why should I go through all this hassle?

Each PPS system is based on clinics’ anticipated cost of providing CCBHC services and has the potential to more accurately reflect the real costs of care—but only if implemented and calculated correctly. Through a PPS, clinics have the opportunity to make new investments and establish new capacity where none existed before—for example, by purchasing an electronic health record, by raising staff salaries, by hiring new staff, or by assigning staff to care coordination activities that had not previously been reimbursable.

Why is it so important to get the rate right during the planning year?

Under a PPS, you’ll have access to a payment rate that reflects your anticipated costs and is inclusive of many activities that have not been reimbursable in the past, such as care coordination or services delivered outside the four walls of your clinic. But the new reimbursement rates are based on estimated costs—meaning that CCBHCs that do a good job of calculating their costs during the planning year will thrive, while those that fail to accurately calculate anticipated costs will struggle.

What do I have to do to be ready for PPS and cost reporting?

Did you take the National Council and MTM Services’ CCBHC Readiness Assessment? – If not, download it  here – Sections C and D of our readiness assessment tool walk you through the Prospective Payment System rate support requirements and other critical considerations for Medicaid cost reimbursement. Use this tool to identify where you’re already well-prepared to collect the needed cost and rate data, and where you may need additional preparation or infrastructure.

More resources from the National Council on PPS and cost reporting are available here:

Compliance Hotspots for CCBHCs:  Establishing a Base Year Rate

This article from the National Council’s Compliance Watch, written by attorney Susannah Vance Gopalan of Feldesman Tucker Leifer Fidell, explores considerations for setting a sound rate during the CCBHC planning year. Learn key considerations for calculating your allowable vs. un-allowable costs, allocating clinician salaries and overhead, and accurately capturing all encounters. For more on compliance and CCBHCs, subscribe to Compliance Watch.

Slide Presentation – Compliance Hotspots for CCBHCs:  Establishing a Base Year Rate

Additionally, on January 26, 2016 Susannah Vance Gopalan participated in a webinar hosted by The National Council that goes into greater detail about establishing a base year rate.  You can review the slides or watch the entire presentation.

Emerging Compliance Hotspots for CCBHCs:  Billing Medicaid

This article from the National Council’s Compliance Watch, written by attorney Susannah Vance Gopalan of Feldesman Tucker Leifer Fidell, explores new administrative requirements that will be imposed on Certified Community Behavioral Health Clinics (CCBHCs) as they move to a prospective payment system (PPS).  Learn how these changes will affect you and your business. The article also provides an in-depth look at compliance issues that may stem from billing Medicaid for CCBHC services and services provided under managed care. For more on compliance and CCBHCs, subscribe to Compliance Watch.

Slide Presentation – Emerging Compliance Hotspots for CCBHCs:  Billing Medicaid

Additionally, on February 10, 2016 Susannah Vance Gopalan participated in a webinar hosted by The National Council that goes into greater detail about the process for billing Medicaid under a PPS.  You can review the slides or watch the entire presentation.

Getting Paid as a CCBHC:  Cost Reporting Principles

At The National Council conference in March 2016 there was a special presentation by Susannah Vance Gopalan, of Feldesman Tucker Leifer Fidell and Steve Khohler, of McBee Associates that provides an overview of PPS and dives into strategies for cost reporting.  Download the slides and PDF from our National Conference to learn more.

 

This is all Greek to me. You’re not alone – email us with your questions or connect with our consulting team for more help!

 

Ready to be a CCBHC? Our CCBHC Resource HUB has the resources and information you need to prepare.
©2018 National Council for Behavioral Health. All Rights Reserved.