Certified Community Behavioral Health Clinics Demonstration Program: Report to Congress, 2018. Prospective Payment System Rates


States set clinic-specific rates based on the expected cost of providing demonstration services divided by the expected total number of demonstration visits, regardless of payer. In evaluating the expected cost of care, states and the CCBHCs reported that their costs took into consideration factors such as the expected number of demonstration encounters, the populations served, and new costs to be assumed. For example, some CCHBHCs hired new staff or trained existing staff to provide care consistent with the CCBHC model of care specified in the program criteria. The amount paid through the rate was also affected by the location of the individual clinics: urban, rural, or frontier areas. Some rural clinics directors reported the need to incur higher staffing costs under the demonstration to attract qualified providers.

One state attributed variation in their rates across clinics to the different needs and circumstances of the clinics' respective communities. Each clinic has evolved to fill a different role in their community, depending on the presence or absence of other providers. For example, a CCBHC may provide crisis services for two other CCBHCs within the same service area. Connected to that are variations in the severity and acuity of individual needs and the level of care provided in response to need. The two clinics with the lowest rates are in areas with few other providers, which means they serve a broader range of people with varying severity and acuity levels. The higher rates are in areas where other providers (including many private providers) serve lower-cost individuals, so the CCBHC works with proportionally more clients with more complex needs. The clinics with the lowest rates are in relatively rural areas, which lowers facility costs, but limits available labor.

Demonstration Year One

Table 10 presents PPS rates for Demonstration Year One (DY1). If a state pays a CCBHC more than its actual cost of care through the DY1 rate, it cannot require the certified clinic to return any portion of the demonstration payment; retrospectively adjust the CCBHC PPS; or recoup such payment through adjustment to the following year's rate.

TABLE 10. States' Selected Methodology, QBP Provision, and Range of DY1 PPS Rates among CCBHCs
State Methodology Offering QBP Range of DY1 PPS
Rates Among CCBHCs
Minnesota PPS-1 Yes $253.35-$666.91 (daily rate)
Missouri PPS-1 Yes $165.46-$252.26 (daily rate)
Nevada PPS-1 Yes $181.53-$214.40 (daily rate)
New York PPS-1 Yes $172.00-$380.00 (daily rate)
Oregon PPS-1 No $185.31-$324.48 (daily rate)
Pennsylvania PPS-1 Yes $150.72-$393.86 (daily rate)
New Jersey PPS-2 Yes $480.72-$1,151.22 (monthly rate)
Oklahoma PPS-2 Yes $532.73-$1,264.39 (monthly rate)
SOURCE: State officials and demonstration grant applications.

Demonstration Year Two

Using cost report data, state officials can compare the actual cost of care in DY1 with payments to adjust the Demonstration Year Two (DY2) PPS rate. States may trend the DY1 rates by the Medicare Economic Index and are not required to adjust the DY2 rate to reflect DY1 cost.

  • Nevada and Oklahoma are rebasing their rates for DY2. They anticipate that the costs of care reflected in the cost reports will differ enough from the original estimates used to set the DY1 PPS rates such that an adjustment will be needed.

  • In DY2, Missouri, New York, and Oregon will continue to pay the rates established for services delivered in DY1. These states believe the DY1 Rates are adequate to cover DY2 costs. Officials in these states expressed concerns about the variability in costs over time and the limited experience the clinics had after one year of operation.

  • At the time of the March 2018 interviews, the remaining three states (Minnesota, New Jersey, and Pennsylvania) had not decided about rebasing their rates.