Prospective Payment System (PPS) Reference Guide

Access guidance and requirements for the prospective payment system (PPS) for certified community behavioral health clinics (CCBHCs).

On May 20, 2015, the Centers for Medicare and Medicaid Services (CMS) issued guidance to states and clinics on the development of a PPS to be tested under the Section 223 Demonstration Program for CCBHCs, as required in Section 223 of the Protecting Access to Medicare Act (PAMA) (PL 113-93).

Access the PPS guidance to states and clinics – 2016 (PDF | 789 KB).

Use this table as a quick reference to compare the CCBHC criteria – 2015 (PDF | 785 KB) and corresponding section of the PPS guidance. You can also learn about PPS-related requirements from the statute.

Criteria PPS Guidance

1.d.2. Interpretation/translation service(s) are provided that are appropriate and timely for the size and needs of the CCBHC consumer population with limited English proficiency (LEP).

PPS 4.1.c. States may claim federal matching funds for translation or interpretation service costs either as an administrative expense or as a medical assistance-related expense.

Program Requirement 1.A: Staffing plan

Program Requirements 1.A and 1.B: Staffing needs

PPS Section 2. PPS rates are based on total annual allowable CCBHC costs. In developing the rates, states may include estimated costs related to services or items not incurred during the planning phase but projected to be incurred during the demonstration.

PPS 4.2.b. Staffing includes costs for those practitioner types identified in the state staffing plan pursuant to CCBHC criteria Program Requirement 1.A.

PPS 4.2.c. Overhead administrative expenses include costs of running the business such as legal, accounting, telephone, depreciation on office equipment, and general office supplies. Corporate overhead allocations are considered indirect administrative expenses, should be scrutinized to ensure that costs are reimbursable by Medicaid, and accounted for by including the amount as a home office costs adjustment.

1.a.3. The Chief Executive Officer of the CCBHC maintains a fully staffed management team as appropriate for the size and needs of the clinic as determined by the current needs assessment and staffing plan.

This cost should be included in the PPS rate but is not explicitly stated in the guidance.

1.c.1. The CCBHC has a training plan. The training must address cultural competence.

This cost should be included in the PPS rate but is not explicitly stated in the guidance.

PPS 4.2.b. “Direct Costs – Staff Staffing includes costs for those practitioner types identified in the state staffing plan pursuant to CCBHC criteria Program Requirement 1.A.

Additional support staff may also be considered direct, including interpreters or linguistic counselors, case managers, and care coordinators.”

2.a.2. The CCBHC provides outpatient clinical services during times that ensure accessibility and meet the needs of the consumer population to be served, including some nights and weekend hours.

PPS 4.2.a. Provider information:

h. Whether the cost report contains consolidated satellite facilities or not

  1. Operating hours of each satellite facility
  2. CCBHC services provided at each satellite facility

2.a.5. To the extent possible within the state Medicaid program and as allowed by state law, CCBHCs utilize mobile in-home, telehealth/telemedicine, and on-line treatment services to ensure consumers have access to all required services.

PPS 4.1.b. If a state chooses to provide CCBHC services via telehealth, costs related to those services should be included in the PPS.

2.b.1. All new consumers requesting or being referred for behavioral health services will, at the time of first contact, receive a preliminary screening and risk assessment to determine acuity of needs. That screening may occur telephonically.

This point is not directly addressed in the guidance. A state may elect to count this as a visit when the service is delivered by a qualified practitioner.

2.d.1. [N]o individuals are denied behavioral health care services, including but not limited to crisis management services, because of an individual’s inability to pay for such services.

PPS 4.1.a. Uncompensated Care

Section 223 (a)(2)(B) requires that CCBHCs not reject or limit services based on a participant’s ability to pay but does not authorize Medicaid expenditures for services furnished to individuals who are not eligible for Medicaid. Under this demonstration, federal financial participation will continue to be provided only when there is a corresponding state expenditure for a covered Medicaid service provided to a Medicaid recipient.

Program Requirement 3: Care Coordination

PPS 4.2.c. Costs associated with care coordination are in direct expenses during the PPS rate development process, and therefore, are included in the PPS rate.

3.b.1. The CCBHC establishes or maintains a health information technology (HIT) system that includes, but is not limited to, electronic health records.

PPS 4.2.c. “Non-personnel costs for providing CCBHC services may include... depreciation on equipment used to provide CCBHC services, ...and other costs incurred as a direct result of providing CCBHC services.”

To the extent HIT costs related to electronic health records are directly attributable to CCBHC services, the costs should be included as a direct, non-personnel cost.

Capitalized HIT systems may otherwise be considered overhead and allocated to CCBHC services through depreciation as part of the PPS rate development process, and therefore, are included in the PPS rate.

Program Requirement 4: Scope of Services

PPS includes the cost of the scope of services covered by the demonstration, including designated collaborating organization (DCO) costs.

PPS 2.1. Certified Clinic PPS (CC PPS-1), and PPS 2.2. CC PPS Alternative (CC PPS-2):

States should include in CC PPS-1 and CC PPS-2 the cost of care associated with DCOs.

Payment for DCO services is included within the scope of the CCBHC PPS, and DCO encounters will be treated as CCBHC encounters for purposes of the PPS. Services of a DCO are distinct from referred services in that the CCBHC is not financially responsible for referred services.

Appendix A: Quality Measures

PPS 2.2.b describes quality bonus payments under the CC-PPS 2 rate methodology.

Requirements From the Statute

Section 223 of the Protecting Access to Medicare Act (PL 113-93) includes the following requirements related to establishing a PPS:

(1) IN GENERAL – Not later than September 1, 2015, the [HHS] Secretary, through the Administrator of the Centers for Medicare & Medicaid Services [CMS], shall issue guidance for the establishment of a prospective payment system [PPS] that shall only apply to medical assistance for mental health services furnished by a certified community behavioral health clinic [CCBHC] participating in a demonstration program under subsection (d).

(2) REQUIREMENTS – The guidance issued by the Secretary under paragraph (1) shall provide that—

A. No payment shall be made for inpatient care, residential treatment, room and board expenses, or any other non-ambulatory services, as determined by the Secretary; and

B. No payment shall be made to satellite facilities of [CCBHCs] if such facilities are established after [April 1, 2014].

Last Updated: 05/17/2016