Nashville, Tenn.-based Mental Health Cooperative has held cost growth for its highest-need Medicaid members to less than half the rate of its peers by building its model around one idea: Patients with serious mental illness shouldn’t have to find their own way through the system.
The nonprofit, which serves more than 39,000 patients a year across more than 50 Tennessee counties, connects care management, crisis care, psychiatry, primary care, pharmacy and social services and is paid largely through value-based contracts. It detailed the model in a study published July 15 in NEJM Catalyst.
“It’s taking the fragmented care that we have, both social systems and in the healthcare system, and helping our consumers navigate those pathways,” said Corey Cronrath, DO, chief medical officer and chief technology officer of Mental Health Cooperative. “We don’t expect the consumer to follow us. We follow them.”
The approach is showing up in utilization and cost. From 2017 to 2024, ED visits among the organization’s Tennessee Health Link members fell 33% and inpatient admissions fell 26%, compared to other THL providers. Its total cost of care rose 7.4% per member per month from 2019 to 2024, compared with 17.6%, according to the study. Tennessee Health Link coordinates healthcare services for Medicaid members with “the highest behavioral health needs.”
If every other THL provider had matched Mental Health Cooperative’s total cost of care, TennCare and its managed care organizations could have saved an estimated $40.9 million in 2024, according to the study. The estimate assumes those providers had similar circumstances and patient panels.
Gaps remain. Seven- and 30-day psychiatric readmission rates rose each year over that period and missed state targets, and only 46.6% of attributed members were actively engaged in care in 2024.
Those results trace back to how the organization was built. It began in the 1990s as a social work care management company and added clinical services over time as it hit gaps in the system, Dr. Cronrath said.
“The organization at the heart is still care management. It’s [the] navigation of care systems,” he said. “But over the years, when [MHC] weren’t able to get someone into psychiatric care or find a place for crisis stabilization, the organization created the services.”
Unlike many similar organizations that rely mostly on grants, Mental Health Cooperative runs primarily on a per-member, per-month case management rate. An incentive payment for reducing ED visits and inpatient use, while improving medication adherence and other quality measures makes up its margin. A small share of revenue is still fee-for-service where value-based contracts aren’t yet in place, he said.
The model’s impact reaches beyond Mental Health Cooperative’s own patients. For hospitals, the payoff is ED capacity, Dr. Cronrath said. When behavioral health crises are handled elsewhere, emergency departments can focus on medical emergencies, and Medicaid programs see lower total cost of care, he said.
Co-response is central to that diversion. Mental Health Cooperative crisis managers ride with Nashville police, giving officers an option besides the ED or jail: the organization’s crisis stabilization unit. The teams responded to about 15,000 calls together last quarter, and fewer than 5% ended in jail, Dr. Cronrath said.
“The police want what’s best as well. They’re not looking to arrest or to punish. They want support,” Dr. Cronrath said. “By being able to help train the police in some basic de-escalation tactics and working with this population, along with having a crisis manager ride with them, that has been a game changer.”
Behind the scenes, keeping all of those pieces connected depends on data, Dr. Cronrath said.
“You have to be very good with your data. You have to be able to take all this different information from different agencies, different EHRs, different IT platforms, your own platforms, and as you bring it in, you have to actually turn it into usable information,” he said.
That includes knowing the hourly cost of running an exam room or the crisis stabilization unit, which lets the organization negotiate sustainable, per-member, per-month rates.
Looking ahead, Dr. Cronrath said the model should be replicated nationally and paid for on outcomes rather than volume.
“It needs to be on a value-based outcomes PMPM or something along those lines instead of fee-for-service because we don’t want to do more,” he said. “We want outcomes, not just doing more services.”
For organizations looking to build something similar, he said, the first step is care management and data. “It starts with navigation through the system, and being really good at collecting the data, the information of where people are going, what services they’re utilizing, what pain points they have. Then you can use the data as a map of where to invest your limited resources to get better and better outcomes,” he said. “But it all starts with social workers and data, and then build[s] from there.”
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