The Centers for Medicare & Medicaid Services (CMS) has recently issued updated guidance on implementing Prospective Payment Systems (PPS) for Certified Community Behavioral Health Clinics (CCBHCs). This revised CMS guidance aligns with the ongoing evolution of the CCBHC program initiated by the Protecting Access to Medicare Act (PAMA) of 2014. PAMA 2014 originally authorized the Secretary of Health and Human Services (HHS) to conduct a Medicaid CCBHC demonstration for a duration of only two years, and in a maximum of eight States, beginning in 2017. The demonstration program has been expanded and extended through various legislative enactments over the past decade. 

Today, eight states are currently operating CCBHC demonstration programs, and 15 others in 2023 received HHS planning grants to design applications to operate a demonstration program. Under the authority of the 2022 Bipartisan Safer Communities Act legislation, HHS may this year select up to 10 additional States to run a CCBHC demonstration.

Both the Substance Use and Mental Health Services Administration (SAMHSA) and the CMS have important roles in the federal government’s administration of the CCBHC program. SAMHSA in 2015 developed and published “CCBHC Criteria,” which are program requirements for CCBHCs elaborating on the required services, activities, accessibility policies, etc. for CCBHCs set forth in PAMA 2014. CMS, the same year, published guidance for States on the developing PPS methodologies for the CCBHCs. 

In March 2023, SAMHSA updated its CCBHC Criteria to account for various developments in health policy. On February 15, 2024, CMS also issued an update of its CCBHC PPS guidance. Effective as of January 1, 2024, for existing CCBHC Demonstration States and July 1, 2024, for newly selected States, the updated guidance takes account of various changes in CCBHCs’ service delivery and in the state of behavioral health policy since 2017.

Key Changes in the Revised CMS Guidance Include: 

(Please note that the below merely highlights various areas of interest, and is not intended to be a comprehensive list of the updates) 

1. Expanded PPS rate options: The original CMS guidance offered States options for two types of PPS rates for CCBHCs, differentiated chiefly by the unit of payment. The first option (PPS-1) is a “daily rate,” under which the CCBHC receives a PPS payment for each day of service in which a qualifying visit occurs. The second option is a “monthly rate” (PPS-2), under which a PPS payment is made for each month in which the CCBHC has a qualifying clinical contact with the client. The updated guidance includes two new rate options, PPS-3 and PPS-4. PPS-3 is identical to PPS-1 except that PPS-3 includes required daily special crisis services (SCS) rates. PPS-4, similarly, is identical to PPS-2, except for the requirement under PPS-4 to use SCS rates.
2. Annual PPS Rate Update: The original CMS CCBHC PPS guidance contemplated only a two-year demonstration, and therefore, did not emphasize the mechanism for year-to-year adjustment of PPS rates. The guidance gave States discretion to decide whether to adjust CCBHC PPS rates by the Medicare Economic Index (MEI) inflationary adjuster between the first and second demonstration years (DY), or to “rebase” the rates (i.e., set new cost-related rates for DY2 based on the costs incurred in DY1). The revised CMS guidance requires states to rebase their PPS rates after DY2. Additionally, on an ongoing basis, states are required to rebase the CCBHCs’ PPS rates every three years. States retain the discretion to decide whether to apply the MEI between DY1 and DY2, or to rebase the rates between those initial two years. The CMS updates take into account the longevity of the CCBHC demonstration, and additionally, may reflect CMS concern that the initial PPS rates established for a CCBHC may not accurately reflect its cost structure, especially if the CCBHC has newly expanded its services and does not have actual cost data available for the computation of the original (DY1) rates.
3. Designated Collaborating Organizations (DCOs): The PAMA 2014 legislation, at Section 223(a)(2)(D), provided that CCBHC services could be furnished by the CCBHC itself or “referred through formal relationships with other providers.” CMS and SAMHSA initially implemented this statutory requirement in a very narrow manner, through the concept of DCOs—a concept defined in SAMHSA’s CCBHC Criteria. Under the original 2015 SAMHSA Criteria, CCBHCs could furnish only a subset of the nine CCBHC services through another organization, referred to as a DCO. Additionally, CCBHCs were required to be clinically and financially responsible for CCBHC services furnished by DCOs. Both the CMS updated CCBHC PPS guidance and SAMHSA’s updated CCBHC Criteria issued in March 2023 reflect a subtle step back from rigorous requirements. For example, the updated CMS guidance no longer refers to a requirement that the CCBHC be “clinically responsible” for services rendered by the DCO.
4. Dually certified entities:  CMS’ original CCBHC PPS guidance addressed rate development issues associated with entities that are certified both as a CCBHC and as another facility type, such as a federally qualified health center (FQHC), a clinic, or a tribal entity. While the original guidance sought to address concerns about duplication of payment, its provisions were arguably vague. The updated guidance endeavors to clarify these issues further.
5. Dual eligible beneficiaries: The updated guidance contains a new provision related to dual eligible beneficiaries – individuals entitled both to Medicare benefits and to certain benefits under the Medicaid program. The guidance helpfully clarifies that for individuals who qualify as full benefit dual eligible beneficiaries (FBDE), “the statute requires payment up to the PPS rate after accounting for Medicare payment.” This means that where the CCBHC PPS rate is higher than Medicare’s allowed amount for the same service, the State’s secondary payment obligation for services rendered to FBDEs is not satisfied merely by payment of the “Medicare cost-sharing” benefit to which dual eligibles who are qualified Medicare beneficiaries (QMB) are entitled. Instead, the State’s secondary payment must equal the full difference between Medicare’s payment (typically 80% of Medicare’s allowed amount) and the CCBHC PPS rate. This provision helps to ensure the efficacy of the CCBHC PPS methodology, by making clear to States that CCBHCs should not receive lesser payment for serving Medicaid clients solely for the reason that those clients also have coverage under the Medicare program.
6. Managed care considerations: The updated guidance includes more clarifications and protections surrounding CCBHCs’ arrangements with Medicaid managed care entities (MCEs). As background, the original guidance required that for services that a CCBHC provides pursuant to a provider agreement with an MCE, the State either make supplemental payments to cover any amount by which payments from the MCE fall short of payments under the CCBHC PPS, or incorporate into the State’s contract with the MCE, a requirement that the MCE pay network CCBHCs according to their PPS rates. 

The revised CMS guidance bolsters protections for CCBHCs in situations where States delegate to MCEs the requirement to pay the PPS rate. It provides that, with respect to such a delegated arrangement, “States are obligated to monitor managed care plan compliance during the DY to ensure CCBHCs receive the clinic-specific PPS rate.” The guidance clarifies that where States require MCEs to pay CCBHCs their PPS rates, the State is not required to obtain prior written approval of a “State-directed payment” – the requirement that otherwise applies when States seek to require MCEs to make specific payments to network providers.

The guidance also includes other protections for CCBHCs in managed care arrangements, including urging States that select a wraparound methodology to make such payments at least once per four months, and recommending that States establish network adequacy standards to ensure access by MCE enrollees to CCBHC services. 

Conclusion

Overall, CMS’ updated CCBHC PPS guidance includes helpful clarifications to ensure that CCBHCs are able to thrive as providers of a wide range of behavioral health services, and that the cost-related PPS payments they receive are reflective of the costs they incur as safety-net behavioral health providers. The updates will also ensure that payment requirements do not serve as a barrier to CCBHCs implementing evolving best practices in behavioral health, such as expanding their offering of crisis services.

The upcoming training, The Certified Community Behavioral Health Clinic Program: What’s New in 2024, will include the CMS PPS updates as well as in-depth information on the CCBHC program requirements, the CCBHC Medicaid demonstration program and SAMHSA expansion grants. Learn more and register here.

If you have any questions or need additional support with these updates to the CCBHC program, please contact Susannah Vance Gopalan at sgopalan@feldesman.com or 202.600.3537.