key: cord-0835352-22ft78c2
authors: Miller, Laurence H.; Parks, Joseph; Yowell, Rebecca
title: The Impact of COVID-19 on Financing of Psychiatric Services
date: 2021-11-13
journal: Psychiatr Clin North Am
DOI: 10.1016/j.psc.2021.11.014
sha: 95d9650752db710126975623afab5f2540ada391
doc_id: 835352
cord_uid: 22ft78c2

The onset of COVID-19 in early 2020 had a significant impact on the delivery of behavioral health services with significant short term and long-range consequences. Intertwined with the delivery of services has been the financial ramifications of the pandemic. The rapid response by governmental agencies to shore-up financial support for clinical services, and the swift shift to virtual care provided relief for a broad array of practice settings however did not mitigate the full impact of the pandemic. Effective state, national and international leadership, communication and coordination are critical to improve the global response to any pandemic.

The onset of COVID-19 in early 2020 had a significant impact on the delivery of behavioral health services which, in turn, has had significant short term and long-range consequences. Intertwined with the delivery of services has been the financial ramifications of the pandemic which have varied based on 3 major variables: time phases since the onset of the epidemic, payment methodology and financing, and type of psychiatric service.

For any particular location the impact on financing and access to services has fallen into 3 broad phases.

First, the initial closure of services and subsequent loss of revenue occurred mostly during late February and throughout March 2020. Between March 12 and April 6 all US states and territories issued advisory or mandatory stay at home orders with the exception of Iowa. 1 This resulted in the cessation of the majority of non-emergency J o u r n a l P r e -p r o o f psychiatric services. In this early phase even the majority of virtual services were curtailed because in most cases the originating site had to be in a clinic setting and not in the community in order to be billable.

The second phase was the 60-90 day lag between the closure of services and the implementation of waivers that allowed billing for virtual services, including federal COVID-19 relief measures, various Medicaid and state interim payment arrangements, and commercial payer flexibilities. The Federal actions to allow expanded and alternate payment occurred promptly. However, providers required time to reorganize service delivery and put in place Children's Health Insurance Program (CHIP) requirements in order to ensure necessary services are available during the period of the emergency and to allow clinicians providing care in good faith to be paid for services and exempt from sanctions (absent a determination of fraud or abuse).

Authorization was given for hardship or supplemental payments to incentivize, stabilize and retain clinicians who were experiencing disruptions to their revenue streams (North Carolina, Oregon, Washington); states waived requirements that tied payment to a minimum number of hours or contacts to address limitations due to social distancing mandates (California, New York). Commercial plans expanded in a patchwork way; and some like Anthem made a national decision while others like Centene varied plan by plan. Individual state Medicaid programs and commercial insurers showed wide variation in how promptly they allowed expanded billing for virtual care. By June most payers were reimbursing for virtual services by video or audio-only at the same rates they had previously reimbursed for in person services. Implementation of alternative payment methodologies were not widely or promptly implemented and varied based on type of service. Habilitation and personal care serviced were paid based on historic prospective payment amounts, mitigating the impact of any service interruptions. Some states authorized an interim payment based on historic payments for other services that was then subject to reconciliation and repayment if the service volume was not maintained; and other states implemented retroactive rate changes to help practices stay afloat.

The National Council for Behavioral Health (NCBH), representing over 3200 providers of treatment for addiction and mental illness, conducted an online survey of 880 behavioral health organizations across the country in April 2020 to quantify the impact of COVID-19 on patients, employment, safety and financial viability. At that time,  62.1% of behavioral health organizations reported that they could only survive financially for three months or less under the COVID-19 conditions in place at that time.

 Only 9.4% of organizations reported they could survive a year or more.

 46.7% of behavioral health organizations had to, or planned to, lay off or furlough employees as a result of COVID-19.

 Organizations cancelled, rescheduled, or turned away 31.0% of patients.

 61.8% closed at least one program  Nearly all (92.6%) had reduced their operations.

The financial impact was more severe for smaller organizations (serving 2,000 patients or less annually) who cancelled, rescheduled, or turned away 36.1% of patients. (National Council Behavioral Health, April 2020). 3 J o u r n a l P r e -p r o o f Congress, through legislative action, authorized a number of mechanisms (see Table 1 ) to provide financial support to clinicians and entities providing mental health and substance use disorder services. Security Act (CARES), allocating $349 billion in forgivable loans for businesses to maintain employment at pre-COVID levels, a second online survey done in early June by the NCBH found that:

 31% of behavioral health organizations had not received any relief funding and among those who did receive funding, 39% got less than $50,000.

 On average, behavioral health organizations reported having lost 24.3% of their revenue during COVID-19  71% reported having to cancel, reschedule, or turn away patients over the previous 3 months. 4 The third phase, since mid-2020, has seen the stabilization of operations with a new mix of virtual services and payments in an environment of ongoing uncertainty regarding how long the expanded billable services for virtual care would remain in place. A third NCBH poll of 343 members conducted during the last two weeks of August found that:  26% of organizations had laid off employees, 24% had furloughed employees, and 43% had decreased the hours for staff.

 On average, organizations lost 22.6% of their revenue over the past three months during COVID-19 and  39% believed they could only survive six months or less.

 While 52% of organizations reported an increased demand for services, 62% reported that they had to cancel, reschedule, or turn away patients over the past 3 months.

 48% of organizations reported telehealth services were providing an equal amount of revenue as previously received for in-person services. However, of those (52%) who said telehealth was not providing the same revenue on average as in-person services, they reported a 28% drop in revenue.

J o u r n a l P r e -p r o o f  32% reported not receiving any funding from the CARES Act, with smaller organizations more often reporting they did not receive any stimulus funding or provider relief funds. 5

As reflected in the following chart, Changes in Clinical Practice, international respondents of the Global Clinical Practice Network reported changes in the number of services provided within their clinical practice (see Figure 1 ).

Slightly less than half of the respondents were providing less frequent diagnostic, psychological assessments, or psychotherapy services since the pandemic began while only 37% of the respondents indicated they were providing psychopharmacology less frequently than prior to the pandemic. 

Overall, the predominant fee-for-service payment methodology has proven the least resilient and adaptive payment methodology during the pandemic. Limiting payment to a narrow list of individual services with specific requirements often involving face-to-face care has required many more administrative changes including a rapid transition to telehealth and limited rapid innovation to the new pandemic conditions. In general, those operating under a capitated or prospective payment system fared better given the existing flexibilities inherent in the structure of the payment. Adjusting rates applied to individual services or expanding coverage as in a fee-for-service environment is much more administratively complex.

The best performing payment methodologies have been in full capitation arrangements providing that the payment adjustment flows through the administrative bodies to the direct service providers and in grant-based funding where agencies receive a periodic lump sum of money for a broadly defined set of services to a defined population. These payments were immediately adaptable at the provider level in response to the pandemic. Prospective payment methodologies such as those used for funding Certified Community Behavioral Health Centers and Federally Qualified Health Centers, afforded immediate operational adaptability and provider financial resilience. CMS J o u r n a l P r e -p r o o f telehealth flexibilities enabled these entities to continue to provide services while receiving the same historic payment amounts.

Medicare, Medicaid, and CHIP were hampered by not having the same statutory authority for behavioral health clinicians as they do in the case of community habilitation services to persons with developmental disabilities to issue an 1135 waiver allowing interim alternative payments based on prior historic payments for all behavioral health services. As a result, community habilitation and personal care services were able to maintain their revenue stream due to the stability in the payment methodology. In a number of cases states instead resorted to temporary rate increases to avoid providers going out of business and programs closing. In some cases the rate increases were done retroactively.

The pandemic significantly impacted physician livelihood and outlook. A survey conducted in April 2020 of 842 physicians revealed 21% had recently been furloughed or experienced a pay cut, 14% planned to change practice settings as a result of COVID-19, and 18% planned to retire, temporarily close their practices, or opt out of patient care. 6 According to a yearly report published in October 2020, average physician compensation appeared to grow by 1.5%, but this was lower than increases in previous years and, when taking account the rate of inflation, actually represented a decline in real income. 7 A similar pattern held for psychiatrists-a survey published in May 2021 had 22% reporting some decline in compensation over the year prior. 8 The same group, however, was optimistic, with 83% expecting an eventual return to pre-COVID-19 income levels. Because labor costs typically make up the highest portion of practice expenses, it follows that pandemic-related reductions in patient volume, and thus revenue, led practices to reevaluate employee contracts accordingly. Figure 2 A-B). AMA found that overall spending dropped by 57% before leveling off at a roughly 8% below expected spending September 2020. AMA estimates that the cumulative reduction for all clinicians during the first nine months of 2020 is 11.5 billion. AMA estimates that the cumulative reduction in Medicare physician fee schedule spending from January to September 2020 for psychiatry was 9%, $702 million in spending down from the expected $773 million.

Psychologists spending was down by 11% ($549 million, down from $614 million) and social workers spending was down by 9% ($447 million, down from $494 million). The decrease in payments to mental health clinicians was less than for some of the other medical specialties in part because of the ability to provide care via telehealth.

Financial impact by type of psychiatric service varied depending on payment methodology in place but a review of the publicly available data reflects that payments for services overall were less in 2020.

Preliminary data from CMS about Medicaid, the largest payer for mental health and substance use disorder services, and the Children's Health Insurance Program (CHIP) shows a significant decrease in services provided to the Medicaid population over the course of the Public Health Emergency (PHE) for all sites of service. As reflected in the tables below, services for children under 19 years of age decreased by 34% between March 2020 and October 2020 when compared to the same period in 2019; mental health services for adults decreased by 22% during the same timeframe; and services for patients with substance use disorders declined by 13% when compared to services 

Disruptions in care occurred in the outpatient office setting during the initial months of the public health emergency (PHE) as clinicians shifted from seeing patients in person to providing care virtually. A survey of members of the American Psychiatric Association found that 64% of respondents were not using telehealth as a mode of care at all prior to the implementation of the public health emergency; two months into the public health emergency, this number shifted dramatically to 85% of respondents seeing more than three-fourths or all of their patients via telehealth.

Some behavioral health clinicians/organizations have reported an increase in revenue for these services due to a decrease in the rate of patients not keeping appointments for virtual care compared to in-person care. There is continued uncertainty and concern that commercial payers will reduce rates for virtual care at some point in the future or discontinue coverage for audio-only services.

Inpatient and residential treatment programs continue to operate at substantial losses unless they are paid through alternative interim payment methodologies such as temporary rate increases (see case example in Box 2). Social distancing and masking have required them to operate at reduced census while maintaining the pre-COVID level of staffing requirements, maintenance of clinical services such as group therapy (reduction in group size but not frequency) as well as one-to-one observation standards. Many have reported having to intermittently further limit J o u r n a l P r e -p r o o f capacity due to shortages of personal protective equipment (PPE). Unexpected expenditures for PPE, testing kits, and technology used to implement telemedicine have likely had an impact on the traditionally thin margins under which psychiatric inpatient units operate. 10 Partial Hospitalization Programs and Intensive Outpatient Programs Initially partial hospitalization (PHP) and intensive outpatient programs (IOP) were reduced or closed as facilities, including community mental health centers, adapted care during the COVID-19 PHE. The closure of services resulted in a loss of revenue that was primarily dependent on the transition time needed to implement telepsychiatry.

CMS eventually extended emergency waivers, retroactive to March 1, 2020, allowing CMHCs and other facilities to provide certain partial hospitalization services in temporary expansion locations (i.e. patients home) through the use of telehealth. 11 CMS also waived the requirement that a CMHC provide at least 40 percent of its services to patients who are not eligible for Medicare benefits, enabling the provision of services to proceed without regard to payer. 12 Private payers followed suit and began to provide coverage to patients from their homes via telehealth. A recent study indicated that patient satisfaction was as high with telehealth partial hospital treatment as with in-person treatment in a general adult program. 13 However, some specialized PHPs or IOPs faced specific monitoring challenges like obtaining weights or blood pressures in patients enrolled in eating disorders programming. As the PHE has continued some programs have shifted to a hybrid model of care that includes group sessions that includes patients joining the sessions either virtually or in person.

At the most basic level, the physician coding is a factor of the volume multiplied by relative value units (RVU), so to maximize billing physicians would desire maximum volume at the highest RVU (highly acute patients moving quickly through the ED/inpatient areas). In March of 2020, at the beginning of the COVID-19 epidemic in the United States, most emergency rooms across the United States initially saw a marked reduction in the total number of Emergency Department visits. The decrease in volume has been theorized to be a reaction to the stay-at-home order and the public's attempt to delay care to minimize exposure to coronavirus infection. A recent study J o u r n a l P r e -p r o o f highlighted the overall reduction in total number of emergency room encounters in 2020 as compared to 2019. However, that same study indicated the total number of visits for mental health conditions, suicide attempts (SAs), and drug and opioid overdose (OD) all increased in the study time period (weeks 1-41 of 2020) as compared to the same time period in 2019. 14 The University of North Carolina saw an initial decrease in overall psychiatric visits in March 2020 (40% reduction) and April 2020 (49% reduction) before returning to expected pre-pandemic levels by late summer (September 2020).

At the University of North Carolina Hospitals (UNC), the coronavirus exacerbated inpatient psychiatry services by several factors that contributed to reduced inpatient capacity during the pandemic. First, following infection prevention guidance, the total number of inpatient psychiatric beds at the Chapel Hill campus was reduced by necessity to convert semi-private rooms to private rooms to allow for appropriate physical distancing between beds.

Second, several nurses either retired or resigned early in the year as the stress of the pandemic hit. This impacted the ability to fully staff inpatient units and operate at full volume. Finally, the need to have a designated inpatient psychiatric COVID + unit reduced inpatient capacity. UNC hospital converted a subsection of a unit to a three bed COVID + unit for patients in need of inpatient psychiatric care but medically asymptomatic or mildly symptomatic.

Patients who tested positive in the emergency room or converted to positive on the inpatient psychiatric units would be transferred to these beds. While this was necessary to meet the needs of the greater system, it frequently was empty and never reached full capacity leaving unfilled beds. The impact of these changes was increasing the length of stay for psychiatric patients boarding in the emergency room.

During the height of the COVID-19 pandemic, the number of main campus inpatient beds decreased from 76 (pre-COVID) to 52 (COVID). At the same time, some of the traditional dispositions for discharging patients (housing shelters, group homes, state psychiatric hospitals, and long-term care facilities) greatly tightened admission criteria or delayed referrals altogether. A recent article described a range of discharge delays between 7-47 days due to reluctance of congregate care facilities to accept COVID-19 patients back into the community. 15 The two inpatient units most impacted by these restrictions were the geropsychiatry unit and psychotic disorders unit. The crisis stabilization unit, child and adolescent units, and eating disorder units all experienced relatively minor increases in J o u r n a l P r e -p r o o f their average length of stays (ALOS) and total number of discharges but were less disrupted than the geropsychiatry and psychotic disorders units.

 In the pre-COVID year (March 2019-February 2020), the ALOS on the psychotic disorder unit (see Figure   4 ) was 15.2 days and the total number of discharges was 400.

 During COVID (March 2020-February 2021) the ALOS was 20.8 and the total number of discharges 238 for that psychotic disorder unit (see .  The overall financial impact on the psychotic disorders unit was a 14% reduction in physician charges from 3/1/20-2/28/21 as compared to 3/1/19-2/28/19.

 The overall financial impact on the geropsychiatry unit was a 37% reduction in physician charges from 3/1/20-2/28/21 as compared to 3/1/19-2/28/19. 

What cannot be adequately depicted in charts and graphs is the emotional toll and burnout that decimated staff in the emergency departments and inpatient psychiatric units. The time and mental energy that was spent in contingency planning was unfathomable: a) infection prevention (screening, re-screening, personal protective equipment distribution, and disinfection) b) restrictions of visitors and minimization of overcrowding; c) staff workforce planning/redeployment d) operational adjustments (telepsychiatry protocols, revising admission criteria, and designing a COVID+ unit); e) group therapy changes (limiting number of participants, utilizing physical distancing).

While the height of the pandemic looks to have past most for emergency and inpatient facilities, the emotional impact remains ever present.

A 2020 World Health Organization survey described disruptions in mental health services for children and adolescents, older adults and peripartum women in 130 countries. Over 60 % of respondents reported disruptions in counseling and psychotherapy, harm reduction services and opioid agonist therapy. Over a third of countries reported disruptions in emergency services for mental health crises. Closer to home, disruptions in mental health services were reported in all levels of behavioral health care, as previously outlined in this article. 16 Older individuals with behavioral health conditions confront the risk of COVID-19 on three key fronts. First, estimates of mental health condition prevalence in older adults is over 20 percent, near 50% in long term care settings. 17, 18 Second, individuals with behavioral health conditions experience a higher prevalence of high risk chronic conditions associated with poor COVID-19 morbidity and mortality. 19, 20 Third, individuals with behavioral health conditions often reside in settings with elevated risk of COVID-19 exposure, such as shared or congregant housing settings, including long-term care facilities such as assisted living facilities and skilled nursing facilities which house frail and elderly adults in need of 24/7 supervision and progressive levels of skilled needs. 21, 22 Finally, The November 20th, 2020 Morbidity Mortality Weekly Report (MMWR) noted 'As of October 15, 2020 Pre-COVID-19 efforts to achieve a more nuanced continuum of long-term care services (see Table 2 ), such as the capitated Program for All-Inclusive Care for the Elderly (PACE), resemble efforts to promote care in the least restrictive setting for individuals with mental illness. Policymakers, facility owners, consumers and caregivers can learn from behavioral health experiments in creating less restrictive therapeutic community-based support and services, such as Assertive Community Treatment and Supportive Housing programs. The PACE program, for example, incorporates behavioral health professionals into the core staffing model, although direct behavioral health services beyond those provided by primary care providers, are not included in the capitated rate. One may even liken PACE to a collection of piecemeal community-based, typically Medicaid-funded, behavioral health services which incorporate ancillary, medical and site-based services. Long-term care and community-based behavioral health services share a reliance on Medicaid for primary funding and hence, innovation in non-institutionalized care. 28, 29 Perhaps a middle ground between PACE and home-based care, as exemplified in Medicaid innovations is a starting point to address the needs of the Seriously Mentally Ill population in long-term care facilities. Initial Pandemic Response. Pandemic declaration occurs when an epidemic affects multiple countries or continents and indicates geographic spread as opposed to disease severity. As we described, the pace of financial policy change was a key influence on the ability to maintain behavioral health services across the care continuum after the pandemic declaration. In future pandemics, policy makers and payers can build from COVID-19 lessons learned to more quickly allow providers to transition to virtual care and ensure safe conditions for patients and providers in office or facility-centered care. Proactive strategies to obtain personal protective equipment (PPE) access and implement social-distance strategies are critical to allow behavioral health providers time to safely transition, as indicated, to virtual care methods. Facility-based partners should be included in surge/ initial pandemic planning to ensure the employment conditions of behavioral health workers and needs of behavioral health patients are wellrepresented.

Finally, the reliable and accurate communication of pandemic conditions, evolving disease burden and health sector J o u r n a l P r e -p r o o f service use is critical to ensuring health security for patients and providers. Anticipatory guidance to obtain and interpret accurate, timely and relevant information to guide financial and operational policy for behavioral health services coverage, payment and provision is as critical in the acute pandemic response phase and pathophysiology and treatment. For example, the Centers for Disease Control and Prevention outlines an entire health communication strategy at their website https://npin.cdc.gov/pages/health-communication-strategies. 

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Preliminary 2020 data show mental health services for children under age 19 declined starting in March and continue to be substantially below prior years' levels through October Comparing the PHE period (March -October 2020) to the same period in 2019, the data show ~22% fewer (12 million) mental health services Note: Data for recent months are likely to be adjusted upward due to claims lag.Mental health services among adults ages 19 to 64 dropped from 176 per 1,000 beneficiaries in February 2020 to a low of 100 per 1,000 beneficiaries in October 2020