Mental Health Payment Reform

The Department of Mental Health is excited to transition into a new mental health payment model as of January 1, 2019.  Mental Health Payment Reform represents a large operational and cultural shift towards focusing on how well we are doing rather than simply how much we are doing. The shift gives communities more flexibility with funding to meet the needs of the children, youth, adults, and families they serve. By simplifying the baseline payment structures and adding Value-Based payments that reward outcomes and incentivize best practice we aim to make it easier for our providers to meet the goal of efficient and effective care for Vermonters with mental health needs.

Mental health payment reform is the culmination of a multi-step and iterative process co-produced by staff with relevant expertise, providers, and stakeholders from across the system of care. Payment reform typically follows a four-step process which begins with planning and design and then moves through to initial implementation and ongoing evaluation. Mental health payment reform utilizes a multi-layer project governance structure, consisting of several subject matter specific work groups and a steering committee for work group report-outs and oversight of broad strategic project goals.

In total, the Department of Mental Health in collaboration with the Department of Vermont Health Access’ Payment Reform Unit engaged in over 150 hours of work group meetings over a 16-month period. More information and materials related to each mental health payment reform work group can be found below. In addition to the workgroup meetings, DMH and DVHA engaged with a variety of stakeholders, which included: AHS staff; Vermont Care Partners; Designated Agency Directors from CYFS, CRT, Financial, and Emergency Services; Designated Agency program managers and staff; Local Program Standing Committees; Local Interagency Teams; IFS Core Teams; Accountable Communities for Health; Consumer Advocacy Groups such as Medicaid Exchange Advisory Board; Department for Disabilities, Aging, and Independent Living Advisory Board; Developmental Services State Program Standing Committee; State Program Standing Committees for Children’s Mental Health and Adult Mental Health; Act 264 Advisory Board; Vermont Federation of Families for Children’s Mental Health; Mental Health Block Grant Planning Council; NAMI; and the Vermont Family Network.


Payment Model/Methodology & Business Operations:

The goal of the Payment Model and Methodology Work Groups is to create a value-based payment model for appropriate mental health services at Designated Agencies that is able to adapt to changing programs, services, related payments, and caseload in ongoing years. This work group also focused on State and Designated Agency needs to operationalize the payment reform including updated business and program operations.

New Payment Model and Billing Changes


Accountability & Encounter Data:

The goal of the Accountability & Encounter Data workgroup is to identify mental health payment reform data requirements and operationalize changes to monitoring and reporting structures to ensure the integrity of mental health programs and services and meet Federal and State auditing requirements. In support of this goal, the work group performs the following tasks:

  • Define minimum standards for mental health encounter data
  • Define MSR & MMIS encounter data reporting requirements
  • Update State and Federal reporting processes as needed
  • Review program integrity standards, update as needed

Key Changes in the New Provider Manual


Quality & Program Evaluation:

The goal of the Quality and Program Evaluation group is to develop quality improvement measures and oversight and to develop frameworks to evaluate and evolve the payment model over time to ensure effectiveness and ongoing sustainability

  • Develop a framework for State/DA payment model review (i.e., adding services, adding performance measures, and adjusting case rate as needed
  • Develop a framework for federal payment model review

Value-Based Payment Summit


Steering Committee:

The goal of the Steering Committee is to offer a checkpoint for stakeholders across the various subject matter specific work groups to receive updates and ask questions about decisions made across the mental health payment reform project.


Contact Information

Department of Mental Health
Commissioner Emily Hawes
280 State Drive, NOB 2 North
Waterbury, VT 05671-2010
Phone: (802) 241-0090
Fax: (802) 241-0100

Contact Us

Public Records Database and Contact Information

For more information about public records requests please click here