Alignment for Progress: 
A National Strategy for Mental Health and Substance Use Disorders

Given the chronic and complex nature of MH/SUDs, fee-for-service payments continue to present challenges to improving quality and outcomes in our systems. Individuals with MH/SUD often need a variety of services across a continuum that, in today’s system, are largely not economically linked and are being reimbursed in fragmented inefficient pathways. There is a tremendous need to integrate MH/SUD and physical health outcomes in model design to produce overall value for the health system.

Though numerous MH/SUD VBP models are ongoing across the country, CMS could play an important role in helping identify best practices, barriers to adoption, and solutions to overcome them. For example, a number of VBP models for SUD are being piloted in states across the country and are being tracked by the Alliance for Addiction Payment Reform.[1] By increasing the visibility of promising payment models and how to address common barriers, CMS can help providers and public and private payers with best practices and seed additional innovation.

Therefore, Congress should direct CMS to issue a VBP model report. Key information that CMS should be required to report include: Current market adoption of MH and SUD market adoption; best practices, barriers, and potential solutions for using VBP models to drive long-term value for MH and SUDs, including key outcomes measures; and state-by-state analysis of the differences in furnishing MH and SUD VBP models that examine utilization and retention rates, program costs and total costs of care, avoidable negative outcomes (e.g., inpatient admissions), quality of care, and patient, family, and provider satisfaction.

CMS should also be required to issue guidance to States regarding the adoption of VBP models for MH/SUD treatment and recovery services in Medicaid. The guidance should include State options for using VBP models in Medicaid 1115 waivers, state-directed payments, in lieu of services, contracts with managed care entities, and provide specific guidance for best practices to States that carve out MH/SUD services.

Primary care providers (PCPs) provide critical MH/SUD services. The majority of patients with mental health conditions are first seen in non-psychiatric medical settings, and such conditions frequently co-occur with physical health conditions.[1] PCPs often treat a wide range of MH/SUDs and prescribe a variety of medications.[2] For instance, PCPs prescribe 79 percent of antidepressant medications and see 60 percent of patients being treated for depression, often with little support from specialist services.[3] Consultation programs can help ensure PCPs are treating MH/SUDs in accordance with accepted clinical standards, including screening, preliminary diagnosis, and treatment plans. A national MH/SUD consultation line would provide real-time support by connecting primary care providers to MH/SUD professionals and enable them to provide clinically sound and efficient MH/SUD treatment. This could be particularly important for PCPs in rural and underserved communities. Such a consultation line could be modeled after the Health Resource and Services Administration’s National HIV/AIDS Clinical Consultation Center. [4]

In most fee-for-service payment models for mental health and substance use disorder (MH/SUD) care, providers and payers are unable to control or directly influence all facets of a person’s recovery journey, including the various manifestations of recovery disruptions. In recent years, both public and private payers have increasingly introduced payment demonstrations designed to promote improved integration of disparate parts of the delivery system to foster improved collaboration and efficiency. Transitioning to value-based payment (VBP) models from the traditional fee-for-service model requires significant restructuring of incentives to encourage collaboration, record sharing, and outcome tracking.[1]

However, the infrastructure required to do this for existing providers is lacking.[2] There is a need for a care transformation funding pool that can support providers to develop Independent Practice Associations (IPA)[3], or other network structures to act as local market organizers of disparate elements of the existing care continuum, provide care coordination to the targeted beneficiaries, and shore up technology gaps in the region to support patient retention and track outcomes across specific care sites. An IPA can provide a single point of engagement for Medicaid managed care organizations and commercial payers across a focused geographic area. These entities can provide shared administrative services, offer increased numbers of beneficiaries to payers, and provide critical quality measurement and data reporting functions foundational to support value-based care.

Such a funding pool could be administered by the Centers for Medicare and Medicaid Services (CMS) through grants or as part of a “meaningful use” type incentive payments to IPAs that create the infrastructure necessary for VBP model contracting. The “meaningful use” model was used by CMS previously to give incentive payments for improvements in provider infrastructure specifically to adopt electronic health records. This model could be targeted at MH/SUD providers to bring together disparate providers to work together in local markets to advance VBP opportunities.[4]

Individuals needing MH/SUD services often face difficulties finding and accessing in-network providers. This can result in long wait times, high out-of-pocket costs associated with out-of-network care, and not receiving critical services. While some states have established their own network adequacy standards for MH/SUD providers, such as timely access and geographic distance standards, these standards vary widely. And even in many states that have standards, they are qualitative, rather than quantitative in nature, significantly impairing beneficiaries’ rights and making the standards difficult to measure or enforce.[1] Studies show that provider network directories overstate provider availability and current network adequacy standards – such as enrollee-to-provider ratios – may not reflect actual access.[2]

The Centers for Medicare and Medicaid Services (CMS) has proposed a new rule on network adequacy standards for Medicaid managed care plans, which includes new national maximum wait time standards for certain appointments and independent secret shopper surveys to validate plan compliance. The proposed maximum wait time standard for routine outpatient MH and SUD appointments is 10 business days.[2] The proposed rule is a significant step forward, and CMS should finalize it without delay.

To further strengthen rules, Congress should establish uniform, quantitative timely access and distance standards for MH/SUD services for all Medicaid managed care plans nationwide. If a plan’s network is unable to provide needed MH/SUD services for a beneficiary within these standards, the plan should be required to arrange out-of-network services with the beneficiary’s cost-sharing limited to what they would have paid had in-network services been available. Several states have implemented such standards, including California, which requires that health plans have medically necessary MH/SUD services available within 10 days.[3]

Many ERISA plans use discretionary clauses to avoid liability for improperly denying benefits, particularly for mental health and substance use disorders. By inserting “discretionary clauses” into their plan policies, ERISA plans permit themselves to interpret the meaning of the terms of the policies they administer and the facts they consider when adjudicating benefits under these policies. Where these clauses are allowed, courts must broadly defer to insurers’ coverage determinations. Under the deferential standard of review, courts only reverse benefit denials found to be “arbitrary and capricious,” even if the court believes the plan has made an incorrect determination.

This problematic higher burden of proof has imperiled the landmark federal court case Wit v. United Behavioral Health (UBH), an ERISA case recognized nationwide as a landmark case for mental health.[1] Nationally, there is a clear movement by states regulating fully-insured ERISA plans to ban discretionary clauses. In fact, the National Association of Insurance Commissioners (NAIC) has adopted a model law entitled the “Prohibition on the Use of Discretionary Clauses Model Act.” The NAIC describes the purpose of the model act to prohibit discretionary clauses “to assure that health insurance benefits and disability income protection coverage are contractually guaranteed, and to avoid the conflict of interest that occurs when the carrier responsible for providing benefits has discretionary authority to decide when benefits are due.”[2] Nearly half of states have now banned these clauses.

Where the clauses are allowed to stand, patients are at a terrible disadvantage in challenging wrongful denials of health care coverage. Federal Circuit Courts have articulated the unfairness that can result from applying a discretionary review in benefits cases, while various federal trial courts have noted that the standard of review in benefits matters is determinative and that the abuse of discretion standards of review permits incorrect outcomes.

The Mental Health Matters Act (H.R. 7780), which included language to ban discretionary clauses, passed the U.S. House in 2022.[3]

As of June 2023, 163 million Americans were living in mental health Health Professional Shortage Areas (HPSAs)[2] with an insufficient number of healthcare professionals relative to the population’s health needs.[3] According to the Commonwealth Fund, in 2021, fewer than half of people with a mental health condition were able to access timely care; those with substance use disorders were even less likely.[4] This has particularly impacted underserved communities.[5]

To address this gap, Medicare’s HPSA Physician Bonus Program pays a 10 percent quarterly bonus to medical doctors when they provide services in an HPSA.[6][7] These bonuses should be expanded to include non-physician providers.[1] The Senate Finance Committee included this change in its 2022 Mental Health Workforce Enhancement Discussion Draft.[1][8]