Policy & Financing

Fragmentation in health care, and particularly the separation of medical from behavioral health services, has led to clinical, operational, and financial inefficiency.1, 2 Health care costs in the United States are much higher than those in other developed nations, 3 with mental health being the most costly type of chronic condition, accounting for an estimated $201 billion in health care costs.4

One approach to providing cost-effective whole-person health care is to integrate primary care and behavioral health services. Various research studies have highlighted how this model of integration can improve clinical outcomes and decrease the cost of care.5-7 Despite the promise this model of care holds, significant barriers to large-scale implementation and adoption exist. In particular, financing is one of the primary barriers to integrating primary care and behavioral health.8, 9

Many tools provide guidance to primary care practices navigating sustainability challenges in the current financial climate. For example:

However, widespread financial and policy changes are needed to sustain large-scale adoption of integrated models of care.9, 10

Some payment reform initiatives have focused on adapting the current fee-for-service structure to allow billing and reimbursement of services that are key to the integrated model of care. In particular, the Centers for Medicare & Medicaid Services (CMS) has recently made several changes to Medicare, noted in a summary of the CMS Final Rule for 2017 Medicare Payments for Integrated Behavioral Health Services (PDF - 325 KB) and a related CMS press release.

Despite these improvements, the fee-for-service reimbursement model does not fully address fragmentation and may perpetuate policies that often separate payment of services into two categories: physical and mental. This separate payment structure often forces clinicians to work within their professional silos to receive payment.8 Our health care system needs payment structures that bridge fragmentation in care.

Alternative payment models (APMs) supplement or replace the traditional fee-for-service payment model to focus more on outcomes and quality, and less on the volume of services provided.10 A variety of APMs have been proposed, including global payments, bundled payments, and pay for performance. It is important to understand how various APMs may influence delivery of integrated services11; several informative articles address this topic.10, 12

The Patient Protection and Affordable Care Act placed greater emphasis on primary care, behavioral health, and payment reform. This change in focus was supported by strong data showing that the failure to provide whole-person care to patients with comorbid behavioral health and medical conditions has been a major driver of increasing health care costs. There is growing recognition that integrating behavioral health in primary care leads to better care and improved outcomes. Whatever happens in future health care redesign efforts, integrating behavioral health and primary care can help improve quality and reduce growth in costs.


  1. Melek S, Norris D. Chronic conditions and comorbid psychological disorders. Research Report. Seattle, WA: Milliman; 2008.
  2. Stange SC, Ferrer RL. The paradox of primary care. Ann Fam Med 2009;7(4):293-9. http://www.annfammed.org/content/7/4/293.long. Accessed April 3, 2017.
  3. U.S. health care from a global perspective: spending, use of services, prices, and health in 13 countries. New York, NY: Commonwealth Fund; 2015. http://www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-health-care-from-a-global-perspective. Accessed April 3, 2017.
  4. Roehrig C. Mental disorders top the list of the most costly conditions in the United States: $201 billion. Health Aff (Millwood) 2016 Jun 1;35(6):1130-5.
  5. Reiss-Brennan B, Brunisholz KD, Dredge C, et al. Association of team-based care with health care quality, utilization, and cost. JAMA 2016;316(8):826-34. https://www.ncbi.nlm.nih.gov/pubmed/27552616. Accessed April 3, 2017.
  6. Woltmann E, Grogan-Kaylor A, Perron B, et al. Comparative effectiveness of collaborative chronic care models for mental health conditions across primary, specialty, and behavioral health care settings: systematic review and meta-analysis. Am J Psychiatry. 2012;169(8):790–804. http://ajp.psychiatryonline.org/doi/full/10.1176/appi.ajp.2012.11111616. Accessed April 3, 2017.
  7. Balasubramanian BA, Cohen DJ, Jetelina KK, et al. Outcomes of integrated behavioral health with primary care. J Am Board Fam Med 2017;30(2):130-9.
  8. Kathol RG, Butler M, McAlpine DD, et al. Barriers to physical and mental condition integrated service delivery. Psychosom Med 2010;72(6):511-18.
  9. Miller BF, Gilchrist EC, Ross KM, et al. Creating a culture of whole health: recommendations for integrating behavioral health and primary care. Aurora, CO: Eugene S. Farley, Jr. Health Policy Center; February 2016. https://www.apa.org/about/governance/president/culture-whole-health.pdf. Accessed April 3, 2017.
  10. Miller BF, Ross KM, Davis MM, et al. Payment reform in the patient-centered medical home: enabling and sustaining integrated behavioral health care. Am Psychol 2017;72(1): 55-68. https://www.apa.org/pubs/journals/releases/amp-a0040448.pdf (PDF - 154.85 KB). Accessed April 3, 2017.
  11. Alternative payment model (APM) framework: final white paper.McLean, VA: Health Care Payment Learning & Action Network; 2016. https://hcp-lan.org/groups/apm-fpt-work-products/apm-framework/. Accessed April 3, 2017.
  12. Hubley SH, Miller BF. Implications of healthcare payment reform for clinical psychologists in medical settings. J Clin Psychol Med Settings 2016; 23(1):3-10.