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When Moving to Collaborative Care, a Challenge Is Figuring Out How to Pay for It

Evidence-Based Diabetes ManagementApril 2015
Volume 21
Issue SP5

Studies have shown that embedding behavioral health services into the primary care practice produces better health outcomes for patients with diabetes, while reducing indications of depression. The challenge is figuring out how to make the transition to new payment models that reward such care.

For several years now, the evidence has been consistent on how to best treat patients with both diabetes and behavioral health issues. Collaborative care models produce better health outcomes for patients, and can save money, too.1,2

The concept behind embedding behavioral health providers in the primary care practice is simple. Comorbidities such as depression or substance abuse are met head on, reducing the likelihood that patients with chronic conditions will skip expensive medications or refuse to see a specialist, resulting in emergency department (ED) visits, hospitalizations, and readmissions.

And yet, that simple idea can conict with reality on many points. Sometimes, it’s a primary care physician (PCP) who isn’t ready to share control of a patient; more often, practices that want to pursue a collaborative care model struggle to make the nances work. For decades, insurers carved out behavioral health from the rest of medical care; while that is changing under the Affordable Care Act, long-term patterns of care delivery and payment are not easily abandoned. Collaborative care models require funding the salary of a care coordinator, or a diabetes educator, or both.

At professional meetings during 2014,3,4 questions that followed presentations on collaborative care often focused on these practical concerns. With much of medicine still locked in a fee-for-service (FFS) payment model, how could practices, health systems, and accountable care organizations make the leap to value-based care while remaining on solid nancial footing?


Howard C. Springer, administrative director of strategy for accountable care services for Swedish Medical Center in the Seattle, Washington, area, told EBDM it’s not easy, but it can be done. And it’s important that physicians accept a future with value-based payment models, which will let them gradually move away from FFS billing and thinking. “For those that are putting their head in the sand and saying, ‘This too shall pass,’ all indications are that we’re going this way, and early adaptors will be better off,” he said.

Springer, who joined Swedish in November 2013, is shepherding its healthcare delivery to value-based models, a task that requires a deep understanding of the twin movements under way: the revolution in how care is delivered, and the one in how we pay for it, the latter being not quite as far along. The challenge for Springer and healthcare executives like him is that the desire to deliver care more effectively can get ahead of the payment models themselves. Figuring out how to navigate this transition financially—while investing in electronic health records (EHRs), information and data analysis technology, and training—requires quite a balancing act, one for which there is no road map. Making the balance sheets work requires obtaining grants and other funding from other sources to nance investments in technology and sophisticated measurement tools, so that as FFS is phased out, Swedish will be ready for its replacement.

And the “future” isn’t far off. CMS has announced new targets for Medicare value-based reimbursements: 30% by 2016, and 50% by 2018.5 Among Springer’s strategies is to bring comprehensive behavioral health services to the primary care setting, using the type of models pioneered by researchers at the University of Washington, whose 2010 paper in the New England Journal of Medicine reported that patients who received collaborative care for 12 months showed a 58% improvement in glycated hemoglobin (A1C) levels relative to the control group, as well as better results for low-density lipoprotein (LDL) cholesterol, blood pressure, and depression screenings.1

The cost for the collaborative care group was lower, too: an average of $594 per patient for the year.1


As Springer works to integrate behavioral health services into primary care, he encourages those PCPs who aren’t ready to share control of a patient to see how the relationship benets them. Is there a generational aspect to resistance?

Yes and no, Springer said: while there are some older providers who have embraced collaborative care and some younger ones who resist it, current family medicine residencies tend to emphasize a more team-based approach.

“There’s always going to be a contingent of primary care providers who are not team players,” he said. “Then there’s socially engaged, more team oriented, who realizes, ‘I like doing certain things, but I can’t be all things to all people.’” Research identies that 80% of patients with behavioral health conditions present in the primary care or medical setting.6,7 However, 60% to 70% of these receive no treatment for behavioral health conditions.8,9 PCPs who refer the patient to the behavioral health provider “lose contact” with the referral, because most behavioral health is farmed out to outside provider groups that essentially limit access to services and do not communicate with the PCP. But in a team approach, that’s not what happens—the care is all under 1 roof, so the patient is more likely to have a mental health or substance abuse issue addressed. And these, Springer said, are the patients who cost the healthcare system at least 2.5 to 3.2 times more than patients with a chronic medical condition.10. “This is the low-hanging fruit.”

The PCP can try to handle a mental health case alone, or can turn it over for a behavioral health intervention of 1 to 4 visits. Addressing behavioral health issues within the primary care delivery team removes barriers that prevent patients from maintaining their LDL cholesterol or A1C levels, Springer said. The behavioral health interventions and care coordination have been shown to deal effectively with real-world issues, which Springer identied as “not being able to get medication, family stress, poor coping strategies—some of the nuts and bolts of survival in the community.” Removing these barriers to failure, he said, can make or break a person’s ability to stay on a health and medication regimen.


On October 31, 2014, CMS announced a fundamental shift toward value-based care: for the rst time, it would pay PCPs to coordinate care for Medicare patients with multiple chronic conditions, even if the patient did not see the doctor that month. Starting in January 2015, physicians or “staff incident to” physicians can earn a “chronic care management” (CCM) fee of $42.60 per eligible patient per month under certain conditions11:

• The PCP must perform (and bill separately for) an initial preventive physical, followed by an annual wellness exam.

• Each eligible patient must have a written care plan, with 20 minutes spent each month on care coordination for that patient by a licensed care team member.

• The patient must have 24/7 access for urgent care needs, including telephone consultation, and the team is responsible for hospital post discharge and ED follow-up.

• The PCP must maintain all EHR activity.

• Most critically, the physician must get the patient’s written consent to act as care coordinator, because the service is subject to a Medicare deductible. It is acknowledged that some patients who most need coordination may refuse to do this.11

Springer said this is an opportunity for some practices to collect a little over $40 per month per patient for services, which many were doing already without receiving reimbursement. This monthly payment aligns reimbursement with value-based care delivery. “It promotes overall care,” he said. Once the PCP’s scope of accountability increases—and a new revenue stream is added—the potential exists for practices to overhaul the way they deliver care. No longer will the entire nancial enterprise depend on physicians seeing patients in 15-minute increments. More work can be shared by other licensed professionals, diabetes educators, or care coordinators. For example, say a practice has 2500 patients with 60% eligible for Medicare. Even if only 60% of these are eligible for the CCM fee, this will yield $460,000 a year for the practice. This reimbursement is not dependent on having a risk contract, which typically has 2 thresholds—reduced medical expense and quality improvement—and an 18-month payback period.

“Another example of real reimbursement with quick payback to Swedish Health delivery system is taking risk for employee health expenses. Taking this model and providing access to employees increases their access to complex care teams, improves care delivery, reduces total cost of care, and increases satisfaction. We call this the Quadruple Aim rather than the Triple Aim.”

“Now they can invest in infrastructure for those patients who are at risk,” Springer said. The practice will still collect some revenue in FFS for a time, but the CCM fee and certain risk arrangements will allow for the investments that will be needed to make the transition to value-based case. But what the doctor does is part of the equation, Springer said. The shift will also require a commitment to patient engagement. When asked how practical it will be to ask seniors to make a co-payment for services they may think their doctor should provide anyway without a co-payment, Springer said that’s the point: patients need to be involved, to have a “quasi-agreement” with their doctor and team and get their buy-in to manage multiple chronic conditions. “Without patient engagement you really can’t change behavior.”


1. Katon WJ, Lin EHB, Von Korff M, et al. Collaborative care for patients with depression and chronic illness. N Engl J Med. 2010;363:2611-2620.

2. Katon WJ, Russo J, Lin EHB, et al. Cost-effectiveness of a multicondition collaborative care intervention: a randomized controlled trial. Arch Gen Psychiatry. 2012;69(5):506-514.

3. Caffrey MK. Integrated care no longer an afterthought at APA. The American Journal of Managed Care website. http://www.ajmc.com/conferences/APA2014/Integrated-Care-No-Longer-an-Afterthought-at-APA. Published May 4, 2014. Accessed June 24, 2014.

4. Caffrey MK. Behavioral health session tackles diabetic burnout, mental health delivery: conference. The American Journal of Managed Care website. http://www.ajmc.com/conferences/ada-2014/Behavioral-Health-Session-Tackles-Diabetic-Burnout-Mental-Health-Delivery-. Published June 15, 2014. Accessed June 24, 2014.

5. Better, smarter, healthier: in historic announcement, HHS sets clear goals and timeline for shifting Medicare reimbursements from volume to value [press release]. Washington, DC: HHS; January 26, 2015. http://www.hhs.gov/news/press/2015pres/01/20150126a.html.

6. Reilly S, Planner C, Hann M, Reeves D, Nazareth I, Lester H. The role of primary care in service provision for people with severe mental illness in the United Kingdom. PLoS One. 2012;7(5):e36468.

7. Wang PS, Demler O, Olfson M, Pincus HA, Wells KB, Kessler RC. Changing profiles of services sectors used for mental healthcare in the United States. Am J Psychiatry. 2006;163(7):1187-1198.

8. Kessler RC, Demler O, Frank RG, et al. Prevalence and treatment of mental disorders, 1990 to 2003. N Engl J Med. 2005;352(24):2515-2523.

9. Wang PS, Gruber MJ, Powers RE, et al. Mental health service use among Hurricane Katrina survivors in the eight months after the disaster. Psychiatr Serv. 2007;58(11):1403-1411.

10. Simon GE, VonKorff M, Barlow W. Healthcare costs of primary care patients with recognized depression. Arch Gen Psychiatry. 1995;52:850-856.

11. Policy and payment changes to Medicare physician fee schedule for 2015 [press release]. Washington, DC: CMS; October 31, 2014. http://www.cms.gov/newsroom/mediarelease database/fact-sheets/2014-Fact-sheets-


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