Value-Based Payments in Medicaid Tied to More Behavioral Health Visits

Medicaid value-based payment reform was associated with an increase in behavioral health visits for patients with mental health conditions, a study published in JAMA Health Forum found.

As of 2020, 12 states, including New York, were pursuing joint state-federal Delivery System Reform Incentive Payment (DSRIP) contracts to incorporate value-based payment into their Medicaid programs.

Historically, Medicaid beneficiaries with mental health diagnoses experience worse health outcomes than the general Medicaid population. New York’s DSRIP program included 25 provider networks and each was required to implement at least one value-based payment program for behavioral health services.

Researchers analyzed New York state Medicaid fee-for-service claims and encounter data to determine the association of value-based payment reform with outpatient utilization, mental health emergency department (ED) visits, and hospitalizations for Medicaid beneficiaries with major depression disorder, bipolar disorder, or schizophrenia.

The study period spanned from July 2013—two years before value-based payment implementation—to July 2019—four years after implementation. The sample included 306,290 patients with depression, 85,105 with bipolar disorder, and 71,299 with schizophrenia.

Value-based payment reform was associated with an increase of 0.91 behavioral health visits for patients with depression and 1.01 visits for patients with bipolar disorder. For patients with schizophrenia, value-based payments were associated with a non-significant increase in behavioral health visits but a decrease of 1.31 primary care visits, driven by patients with the fewest comorbidities.

Value-based payments were associated with a slight decrease in mental health hospitalizations for patients with depression. Similarly, value-based payments led to a reduction in mental health ED visits for patients with depression (-0.01 visits), bipolar disorder (-0.02 visits), and schizophrenia (-0.04 visits).

The DSRIP program’s impact on behavioral health visits was the most significant in the first three years following implementation for patients with depression and bipolar disorder. Reductions in mental health ED visits and hospitalizations were consistent following implementation for patients with depression but were less significant for patients with bipolar disorder and schizophrenia over time.

The findings suggest that DSRIP programs and other value-based payment systems in Medicaid could generate positive patient health outcomes by prioritizing value-based payment along with care delivery reform that focuses on mental health conditions.

Value-based payment programs may also help minimize spending on mental health conditions.

Participating in alternative payment models like accountable care organizations has been shown to reduce Medicare spending on beneficiaries with depression, bipolar disorder, and schizophrenia, one study found. ACOs participating in the Medicare Shared Savings Program saved a total of $227 per person per year on medical spending.