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Funding Models for Depression Care Management in Primary Care Settings

A key component of the chronic illness care model for treatment of depression is care management: a collaborative process of assessment, planning, facilitation, and advocacy for options and services to meet an individual’s health needs through communication and available resources to promote quality and cost-effective outcomes. Several well-controlled studies have demonstrated the clinical efficacy and cost effectiveness of care management for behavioral disorders in general and for depression in primary care settings specifically. In these studies, care managers provided combinations of the following services:

- Patient and family education about
depression and its treatment
- Development of treatment and selfmanagement
plans
- Coordination of care with primary and
behavioral health specialty providers
- Assessment and monitoring of patients’
preferences, needs, barriers, and progress
- Encouragement of treatment adherence by
patients and medication guideline
compliance by physicians
- Brief, structured forms of psychotherapy
- Specialty referrals and hospitalizations as
needed

A significant challenge to providing depression care management is finding sustainable funding mechanisms for these services. The Robert Wood Johnson Foundation’s $12 million national program, “Depression in Primary Care: Linking Clinical and Systems Strategies,” funds three related grant components – incentives (demonstration projects), value research, and targeted leadership awards – to stimulate innovation in primary depression care. These components help to identify and implement economic and organizational strategies that, along with evidence-based clinical best practices, will sustain chronic illness care improvements in the primary Care Treatment of depression. Several extant models for funding depression care management services have been piloted through the program’s demonstration projects and similar programs as described below.

1. Practice-Based Care Management on a
Fee-for-Service Basis

In the fee-for-service model, care managers are employees of the primary care practice and located within its clinical site(s). Revenue flows from the insurer (e.g., a health plan or governmental payer) to the primary care practice upon the insurer’s receipt of properly coded billing statements and in accordance with the payer’s benefits structure and coverage policies. Few, if any, explicit care management billing codes are recognized by third-party payers, especially private insurers, thus making fee-for-service billing dependent on “medically necessary” services rendered “incident to” physicians’ care. To be a viable source of funding, however, any fee-for-service care management billing from primary care would have to address current constraints on billing for patient telephone contacts and inability of the sites to bill for multiple primary care provider encounters in the same day.

2. Practice-Based Care Management
Under Contract to Health Plans

Health plans can contract with primary care practices to provide care management services to certain plan members with specified diseases, including depression. In these arrangements, care managers are typically located at the practice site(s) and may be employees of the practice, the health plan, or another entity (e.g., a community mental health organization or a disease management company). Such arrangements can include providing full or partial salary reimbursement to practice sites for depression care managers. Revenue for the care managers’ services is generally based on historical estimates of both the service costs and the number of members served, and takes the form of monthly or yearly retrospective payments.

3. Global Capitation

Group model HMOs, which are generally fully capitated and have a relatively flexible capacity to allocate resources, can provide and fund care management services internally.

4. Flexible Infrastructure Support for
Chronic Care Management

This funding model includes an allocation of money by health plans to practices designed to support specific quality improvement efforts, such as infrastructure developments (e.g., information system upgrades), provider training, or care manager salaries that will improve clinical outcomes and patient satisfaction. The additional money is available to a practice either to meet specific, predetermined expenses or, more flexibly, for purposes of its own choosing. In the latter case, practices may choose to reward physicians for meeting or exceeding pre-selected clinical performance expectations, reinvest the money to enhance quality infrastructure (e.g., support care managers), or do both.

5. Health Plan-Based Care Management

Managed care and/or managed behavioral healthcare organizations employ care managers in a variety of roles to perform multiple tasks, with a focus on utilization review and treatment planning with treating clinicians via telephone. These typical managed behavioral healthcare management services usually involve minimal or no contacts with patients or primary care providers. As health plan employees, care managers’ salaries and expenses are typically absorbed in the administrative costs charged to the health plan’s customers (i.e., purchasers). In some cases, health plan-based care management targets specific diseases (e.g., asthma, diabetes, depression) or populations (e.g., the frail elderly). Demand for enhanced, collaborative care by purchasers and consumers will be instrumental in managed behavioral healthcare organizations’ commitment to invest in care management services to support primary care providers.

6. Third-Party Based Care Management
Under Contract to Health Plans

Health plans may subcontract with disease management organizations, managed behavioral healthcare organizations, and/or community mental health organizations to provide off-site care management services for specific patient populations (e.g., chronically ill elderly patients) and/or diagnostic classes (e.g., patients with depression). These arrangements are typically capitated wherein the subcontractor receives per patient per month revenue that is generally based on historical estimates of both the service costs and patients served. As with the other funding mechanisms, consumer expectations and purchaser demands will exert clinical and economic pressure on health plans to extend support to third parties to provide care management services.

7. Hybrid Models

Combinations of the funding mechanisms listed above results in various hybrid-funding models for care managers and their services. For example, community mental health center counselors can be placed in primary care practices and funded partly through fee-for-service billing and partly through health plan contracts.

Challenges and Opportunities

Because care management services fall outside the conventional margins of the healthcare delivery system and are delivered by healthcare professionals whose training cuts across traditional boundaries, third-party payers require cogent demonstrations of their value in order to justify subsidizing them. However, a decade of well-controlled health services research demonstrating the benefits of depression care management (i.e. better integration of primary and behavioral healthcare for depressed patients, improved clinical outcomes) and the strong endorsement of major health policy institutions (such as the President’s New Freedom Commission, the Institute of Medicine, and the Centers for Medicare and  Medicaid Services) can drive ongoing efforts to find sustainable mechanisms for funding these services.

About the Author

Linda Rosenberg is the president and CEO of the National Council for Community Behavioral Healthcare. TNC specializes in the treatment of mental illnesses and addiction disorders while also promoting public policy for emotional and behavioral disorders. Lean more at www.thenationalcouncil.org.

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