CMS-10398 (#45) 

OMB Control #0938-1148

Guidance to Planning Grant States to Apply to Participate 

in the Section 223 CCBHC Demonstration Program

Introduction

Section 223 of the Protecting Access to Medicare Act (PAMA) of 2014 (P.L. 113-93)1

authorized the Certified Community Behavioral Health Clinic (CCBHC) demonstration to allow 

states to test a new strategy for delivering and reimbursing a comprehensive array of services 

provided in community behavioral health clinics. The demonstration aims to improve the 

availability, quality, and outcomes of outpatient services provided in these clinics. It also 

requires states to reimburse CCBHC providers using a Medicaid prospective payment system 

(PPS) methodology intended to cover the full cost of providing CCBHC services to Medicaid 

beneficiaries. In 2016, the U.S. Department of Health and Human Services (HHS) selected eight 

states to participate in the demonstration (Minnesota, Missouri, Nevada, New Jersey, New York, 

Oklahoma, Oregon, and Pennsylvania) and expanded the demonstration to two new states 

(Kentucky and Michigan) through the Coronavirus Aid, Relief, and Economic Security Act (P.L. 

116-136) in August 2020. Though there have been several extensions to what was an originally a

two-year demonstration program, the most recent expansion under the Bipartisan Safer

Communities Act of 2022 (P.L. 117-259) authorized an additional one-year planning grant phase

and the addition of up to 10 additional states to participate in the CCBHC Demonstration

beginning as early as July 1, 2024, and every two years thereafter.

The CCBHC Planning Grants awarded by SAMHSA in March 20232 are designed to support

states through the 1-year statutory planning phase of the CCBHC Demonstration and prepare 

them and their clinics to participate in Demonstration program. As a planning grant recipient, 

CCBHC planning grant states are expected to submit an application to formally apply to 

participate in the four‐year Demonstration. Up to ten states will be selected to participate in the 

Demonstration based on the quality of the applications and geographic distribution, per the 

statute. All states that received a CCBHC Planning Grant, either in 2016 or 2023, are eligible to 

apply to participate in the four-year Demonstration.

Applications will be reviewed by a panel of federal subject matter experts. Based on that review, 

recommendations for selection will be made to federal officials of the Assistant Secretary for 

Planning and Evaluation (ASPE), the Centers for Medicare & Medicaid Services (CMS), and the 

Substance Abuse and Mental Health Services Administration (SAMHSA) for final selection no 

1 H.R. 4302, 113th Congress. Protecting Access to Medicare Act of 2014. PL No 113-92; April 2, 2014. 

https://www.congress.gov/bill/113th-congress/house-bill/4302 2 On March 16, 2023, the U.S. Department of Health and Human Services (HHS), through the Substance Abuse and 

Mental Health Services Administration (SAMHSA), awarded 15 states each with $1 million, one-year CCBHC 

planning grants. The 15 states selected were Alabama, Delaware, Georgia, Iowa, Kansas, Maine, Mississippi, 

Montana, North Carolina, New Hampshire, New Mexico, Ohio, Rhode Island, Vermont, and West Virginia.
2 

later than June 17, 2024. This document outlines the key application materials that must be 

submitted and clarifies the evaluation criteria that will be used to select states to participate in the 

demonstration. 

PAMA (P.L. 113-93, 42 U.S.C. 1396a, note), at subsection 223 (d)(4)(A) under which the 

program is authorized, is explicit that preference must be given to selecting demonstration 

programs where participating CCBHCs will achieve at least one of the following: 

• Provide the most complete scope of services as described in the Criteria to individuals 

eligible for medical assistance under the state Medicaid program; OR

• Improve availability of, access to, and participation in, services described in subsection 

Criteria to individuals eligible for medical assistance under the state Medicaid program; 

OR 

• Improve availability of, access to, and participation in assisted outpatient mental health 

treatment in the state; OR

• Demonstrate the potential to expand available mental health services in a demonstration 

area and increase the quality of such services without increasing net federal spending. 

This guidance is provided to clarify the criteria that federal subject matter experts will use to 

assess which states are most likely to achieve at least one of the above goal(s) during the 

demonstration program. Other criteria will be considered such as each state’s readiness to 

participate in the program in terms of meeting the expectations of the planning grant, the state’s 

compliance with the updated CCBHC Criteria3

 and conformance of the state’s PPS to the 

updated PPS Guidance4. 

Planning Grant States must submit applications to participate in the demonstration no later than 

March 20, 2024, 11:59PM EST. Applications must be submitted by email to 

CCBHC@samhsa.hhs.gov. States selected to participate in the demonstration program will be 

announced in June 2024. 

3 The updated criteria, released in March 2023, are available at https://www.samhsa.gov/sites/default/files/ccbhccriteria-2023.pdf. 4 The updated PPS guidance, anticipated to be released by December 31, 2023, will be available at 

https://www.medicaid.gov/medicaid/financial-management/section-223-demonstration-program-improvecommunity-mental-health-services/index.html
3 

Components of the Application to Participate in the Section 223 

Demonstration Program

Applications to participate in the demonstration program will be assessed on the completeness of 

the application and the score applied by an objective review of applications. There are three 

parts to this application: Required Attachments, Program Narrative, and Prospective Payment 

System Methodology Description. The components are described in greater detail below along 

with the points assigned for each section in parentheses. The total possible score is 100 for the 

complete application. 

Part 1: Required Attachments

You must include all of the following attachments. Attachment 1 will be scored as described 

under Part 2, item B.

Attachment 1. Complete the Certified Community Behavioral Health Clinic (CCBHC) 

Criteria Compliance Checklist 2023 according to the guidance included in 

this application guidance. This single checklist will identify the readiness 

of the proposed CCBHCs in your state to be compliant with the updated 

CCBHC Certification Criteria by the proposed start date of your 

demonstration program. Include the completed checklist as Attachment 1. 

Attachment 2 Include a signed statement that verifies that all CCBHCs proposed to be a 

part of the state’s demonstration program will be compliant with the 

CCBHC Certification Criteria by the proposed start date of the state 

demonstration program and that, as a part of this, all participating 

CCBHCs will participate in SAMHSA’s treatment locator. The applicant 

must document that they have provisionally certified at least two CCBHCs 

in diverse geographic areas including rural and underserved areas. These 

provisionally certified CCBHCs must substantially meet the criteria and 

be ready to fully meet the certification criteria by the proposed date of 

state entry into the demonstration. 

Attachment 3. Include a statement that describes the target Medicaid population(s) to be 

served under the demonstration program. 

Attachment 4. Include a list of proposed certified community behavioral health clinics 

including any designated collaborating organizations (DCOs) proposed to 

work with each CCBHC and what portions of the nine required services 

they would be providing. 

Attachment 5. Include a signed statement that verifies that the state has agreed to pay for 

CCBHC services at a rate established under the prospective payment 

system. 
4 

Attachment 6. Include a description of the scope of services required by the state in 

compliance with CCBHC Criteria, Scope of Services, provided by/through 

CCHBCs in your state, available under the state Medicaid program, and 

that will be paid for under one of the selected PPS methodologies tested in 

the demonstration program. This is meant to be a verification of the scope 

of services that the state has required in order to comply with the CCBHC 

Criteria, including any additional services required through state discretion 

and evidence-based practices.

Attachment 7. Include the SAMHSA Budget Justification form from your state’s original 

application for a Planning Grant for CCBHCs and modify it to project the 

amount of unexpended funds, if any, and how they will be used after 

March 30, 2024. 

Part 2: Program Narrative

In the Program Narrative, you will describe your state’s readiness to participate in the 

demonstration program and project the impact of participation. The Program Narrative will be 

scored up to a total of 80 points and may not exceed 30 pages. Each of the sections will be 

scored as listed below. More detailed guidance is provided in the next section. 

A. Solicitation of input by stakeholders in developing CCBHCs (10 points) 

B. State Capacity to Support CCBHC and Certification of clinics as CCBHC (30 points) 

C. Development of enhanced data collection and reporting capacity (10 points) 

D. Participation in the national evaluation (15 points) 

E. Projection of the impact of the state’s participation in the Demonstration program (15 

points) 

Part 3: Prospective Payment System Methodology Description

Please complete Part 3 Prospective Payment System Methodology Description, the form that is 

attached later in this guidance. Part 3 will be scored up to a total of 20 points. Using this form, 

you will describe the following: 

1. CCBHC PPS Rate-Setting Methodology Options 

2. Payment to CCBHCs that are FQHCs, Clinics, or Tribal Facilities

3. Cost Reporting and Documentation Requirements 

4. Managed Care Considerations 

5. CCBHC Claims and Service Level Encounter Detail

6. Funding Questions 
5 

Part 2: Program Narrative

In the Program Narrative, you will describe your state’s readiness to participate in the 

demonstration program and project the impact of participation. This part will be scored up to a 

total of 80 points and may not exceed 30 pages. 

A. (10 points – approximately 3 pages) Solicitation of input by stakeholders with respect to 

the development of such a demonstration program from consumers, family members, 

providers, tribes, and other key stakeholders. Please provide the following: 

• A description of the steering committee or use of an existing committee, council, 

or process composed of relevant state agencies, providers, service recipients, and 

other key stakeholders to guide and provide input throughout the grant period. 

• A description of the outreach, recruitment, and engagement of the population of 

focus including adults with serious mental illness and children with serious 

emotional disturbances and their families, and those with long term serious 

substance use disorders, as well as others with mental illness and substance use 

disorders in the solicitation of input. 

• A description of the coordination with other local, state, and federal agencies and 

tribes to ensure that services are accessible and available. 

B. (30 points – approximately 11 pages) State capacity to support CCBHCs and certification 

of CCBHCs for purposes of participating in a demonstration program, using the updated 

CCBHC criteria. Reviewers will examine the state’s submission of the CCBHC Criteria 

Compliance Checklist 2023 attachment

(https://www.samhsa.gov/sites/default/files/ccbhc-compliance-checklist.pdf). This 

compliance checklist includes the updated criteria required for the CCBHCs and their 

Designated Collaborating Organizations (DCOs) which together form the CCBHC. For 

each of the criteria on the checklist, please indicate the number of clinics in your state 

that fall within each of the following categories: 

1. Ready to implement 

• The CCHBC fully satisfies all elements under this Program Requirement 

Criteria. 

2. Mostly ready to implement 

• The CCBHC satisfies almost all elements under this Program Requirement 

Criteria although some minor adjustments are currently in process to fully 

satisfy. The CCBHC has a plan to come into compliance within the 

required timeframe. 
6 

3. Ready to implement with remediation

• The CCBHC satisfies some elements but must make significant 

improvements in other elements to fully satisfy this Program Requirement 

Criteria. The CCBHC is responsive to implementing the needed changes 

and has begun to do so. The CCBHC has a plan to come into compliance 

within the required timeframe.

4. Unready to implement 

• The CCBHC has not demonstrated capacity to meet the elements under 

this Program Requirement Criteria and will be unable to come into 

compliance within the required timeframe. 

In addition, please provide the following: 

• A description of the state’s current readiness and history implementing the 

CCBHC program, including any current CCHBC Expansion grants in the state as 

well as the efforts to support the CCBHC Demonstration program; CCBHC 

initiatives under Medicaid state plan or waiver; any support of CCBHCs through 

other funding sources managed by the State; and the State’s capacity and 

infrastructure established to support the CCHBC Demonstration program in areas 

such as certification, technical assistance, data systems, and payment. 

• A description of the selection processes and review procedures that you used to 

select and certify clinics as CCBHCs that demonstrates attention to quality of 

care, access and availability of services. 

• A description of the diversity of CCBHCs including geographic area, population 

density, underserved areas or other data. Cite documentation, including medically 

underserved area (MUA) designations, that at least one CCBHC is located in a 

rural and/or underserved area. Include a description of how the state and 

CCBHCs will address disparities, including systematic processes that have been 

established to ensure under-served/historically marginalized populations, 

including Black, Latino, Hispanic, and Indigenous and Native American persons, 

Asian Americans and Pacific Islanders, and other persons of color; members of 

religious minorities; lesbian, gay, bisexual, transgender, queer, and intersex 

(LGBTQI+) persons; persons with disabilities; persons who live in rural areas; 

and persons otherwise adversity affected by persistent poverty or inequity, have 

access to high-quality healthcare. 

• A description of how the state has worked with selected CCBHCs to improve the 

delivery of high-quality behavioral healthcare, such as support for evidence-based 

practices, workforce development, development of interdepartmental 

partnerships, recovery-oriented and trauma-informed models of care, and other 

related areas as well as a description of plans to continue support CCBHCs in 

these areas as a part of the demonstration program. 
7 

• A description of how CCBHCs will be working with other community

organizations, including the 988 Suicide & Crisis Lifeline, and state mental health

and substance use crisis response systems.

• A description of how the CCBHC needs assessments have been used to identify

behavioral health needs and resources in the service areas of included CCBHCs

across the lifespan, to include the impact the CCBHC needs assessment will have

on staffing, language and culture, services, locations, service hours, and evidencebased practices, while identifying and addressing barriers and increasing access to

healthcare.

• A description and justification of the evidence-based practices5 that the state has

required

• For each proposed CCBHC, provide the definition of the CCBHC service area

using recognized geographic boundaries, such as municipal or county borders, zip

codes, or census tracts.

• A description of the guidance to CCBHCs regarding the CCBHCs organization

governance that ensures meaningful input by consumers, persons in recovery, and

family members.

• A description of any other areas that the state is exercising their discretion to

place additional requirements that go beyond the minimum expectations set in the

CCBHC criteria, using the State Discretion Guidance.

• A description of the planned process for bringing additional CCBHCs into the

State CCBHC Demonstration program over time, if the state is planning to add

additional CCBHCs over the course of the 4-year demonstration program (note:

states may describe a process without identifying specific CCBHCs).

C. (10 points – approximately 4 pages) Development of enhanced data collection and

reporting capacity. Please provide the following:

• A description of the ways in which the state and CCBHCs have developed or

enhanced data collection and reporting capacity in support of meeting PPS

requirements, quality reporting requirements, and demonstration evaluation

reporting requirements listed under Criteria Program Requirement 5: Quality and

Other Reporting in the Criteria.

• A description of the designed or modified and implemented data collection and

reporting systems-including but not limited to registries or electronic health

record functionality that report on access, quality, scope of services, and costs and

reimbursement for behavioral health services. A description of how the state

assisted CCBHCs with preparing to use data to inform and support continuous

quality improvement processes within CCBHCs, including fidelity to evidencebased practices, and person-centered, and recovery-oriented care during

5 For more information about evidence-based practices for mental and substance use conditions, please visit the 

SAMHSA Evidence-Based Practices Resource Center: https://www.samhsa.gov/resource-search/ebp
8 

demonstration. A description of how the state plans or has developed processes by 

which it can provide timely input to CCBHCs on interim results of statedcollected quality measures. 

• A description of how the state will work with CCBHCs to ensure that the

CCBHCs are billing for CCBHC services correctly using the federal CCBHC, or

state developed demonstration billing codes, in a way that results in proper

payment of the PPS and captures service level detail of CCBHC services

delivered under the claim.

• A description of the format of all data described in this section and when and how

evaluators will be able to access this data.

D. (15 points – approximately 6 pages) Participation in the national evaluation of the

Demonstration Program. Please provide the following:

• A description of the capacity and willingness to assist HHS to access data related

to the cost, quality, and scope of services provided by CCBHCs and the impact of

the demonstration programs on the federal and state costs for a full range of

mental health and substance abuse services (including inpatient, emergency, and

ambulatory services paid for through sources other than the demonstration

program funding).

• A summary of discussions with the federal evaluation planning team regarding

the selection of an appropriate comparison group for an assessment of access,

quality, and scope of services available to Medicaid enrollees served by CCBHCs.

• The status of requests or planned requests for an Institutional Review Board’s

approval to collect and report on process and outcome data (as applicable and

necessary).

E. (15 points – approximately 6 pages) Project the impact of the state’s participation in the

Demonstration program. Please project the impact of CCBHCs in your state to achieve at

least one of the goals listed below during the four-year demonstration program. Use the

following guidance to develop your narrative.

• Select one or more goals from the four listed below to project the impact of

CCBHCs in your state. Explain the process by which you selected the goal(s) and

why it is important to your state and CCBHC communities. Include a description

of the impact from established State CCBHC efforts, if applicable.

• List specific measures, selected from CCBHC Criteria: Appendix B, that will

show the impact on the population served by CCBHCs over the four-year

demonstration program period.6

 Explain how these measures are related to the

goal(s) selected.

• Provide baseline data on selected measures from the planning grant period.

6 CCBHC Criteria - Appendix B: https://www.samhsa.gov/sites/default/files/ccbhc-criteria-2023.pdf
9 

• Describe your plan for data collection, documentation, tracking of outcomes, and

analysis to measure progress in achieving the outcome.

• Using the selected measures, project the impact on the target population from

baseline to the completion of the demonstration program and justify your

projections. Include any data that was collected based on State CCBHC efforts

already implemented on the target population, if applicable.

Goal 1. Provide the most complete scope of services required in the CCBHC

Criteria to individuals who are eligible for medical assistance under the state

Medicaid program.

Goal 2. Improve availability of, access to, and participation in, services described

in subsection (a)(2)(D) to individuals eligible for medical assistance under the

State Medicaid program.

Goal 3. Improve availability of, access to, and participation in assisted outpatient

mental health treatment in the state.

Goal 4. Demonstrate the potential to expand available mental health services in a

demonstration area and increase quality of such services without increasing net

federal spending.
10 

Part 3: Prospective Payment System Methodology Description

Using the following format, describe the state’s prospective payment system (PPS) methodology. 

This part of the Guidance will be scored up to a total of 20 points and your response may not 

exceed 30 pages. Each section of this part of the application corresponds to the same section of 

the CCBHC PPS Guidance. Sections 1-5 of this form pertain to fee for service prospective 

payment; managed care payment is addressed in section 6. 

Section 1: Introduction

Section 223 of the PAMA, requires payment using a PPS for CCBHC services provided by 

qualifying clinics and related satellite sites established prior to April 1, 2014. The Centers for 

Medicare & Medicaid Services (CMS) offers a state the option of using one of four (4) PPS 

payment methodologies. States may select from among the daily Certified Clinic PPS rate (CC 

PPS-1), the monthly Certified Clinic PPS rate (CC PPS-2), the daily Certified Clinic PPS rate 

that includes special crisis services (CC PPS-3), and the monthly Certified Clinic PPS rate that 

includes special crisis services (CC PPS-4). The rate selected by the state must be used

demonstration-wide for payments that are either fee for service (FFS) or made through managed 

care payment systems. CMS updated the PPS Technical Guidance in 2023 which outlines details 

specific to the available PPS options currently available under the CCBHC demonstration. 

Section 2: CCHBC PPS Rate-Setting Methodology Options

CMS offers a state the option of the CC PPS-1, CC PPS-2, CC PPS-3, or CC PPS-4 

methodology for use demonstration-wide. The state chooses the following methodology (select 

one): 

Certified Clinic PPS-1 Methodology (CC PPS-1) (Continue to Section 2.1) 

Certified Clinic PPS-2 Methodology (CC PPS-2) (Continue to Section 2.2) 

Certified Clinic PPS-3 Methodology (CC PPS-3) (Continue to Section 2.3) 

Certified Clinic PPS-4 Methodology (CC PPS-4) (Continue to Section 2.4) 

Section 2.1: Certified Clinic PPS-1 Methodology (CC PPS-1) 

The CC PPS-1 methodology is implemented as a fixed daily rate that reflects the expected cost 

of all CCBHC services provided on any given day to a Medicaid beneficiary. This is a cost 

based, per clinic rate that applies uniformly to all services rendered by a CCBHC and qualified 

satellite facilities established prior to April 1, 2014. The state has the option of offering Quality 

Bonus Payments (QBPs) that are to be paid in addition to the PPS rate to any certified clinic that 

achieves on state established thresholds for payment in accordance with Section 3: Quality 

Bonus Payments (QBPs) of the updated PPS Guidance. 
11 

Section 2.1.a Components of the CC PPS 1 Rate Methodology 

Demonstration Year One (DYl) Rate Data

In the box below explain the source(s) of cost and visit data used to determine the DYl rate. 

Detail any estimates that the state used to determine allowable cost and the appropriate number 

of daily visits to include in the rate calculation. If more space is needed, please attach and 

identify the page that pertains to this section. 

Annual PPS-1 Rate Updates 

The CC PPS-1 rates will be updated between DYs with mandatory rebasing by using 

(select one):

The Medicare Economic Index (MEI)

Rebasing CC PPS-1 rate

Interim Payment Methodology for Rebasing 

When rebasing PPS rates for an upcoming DY, the PPS rate for the upcoming DY is calculated 

by rebasing the prior DY’s PPS rate so the rate calculated for the upcoming DY reflects the prior 

DY’s cost experience. As the cost and visit data for the prior DY data will not be available to the 

state in time to analyze and rebase the rate prior to the start of the upcoming DY, the state will 

need to pay an interim PPS rate until the PPS rate(s) are finalized for that DY. In the box below, 

please provide an explanation of the interim payment methodology7 that your state will use 

specifying what interim rate the state will pay providers, when the final PPS rate would be 

calculated for that DY, and how the state intends to reconcile claims for that DY to ensure that 

all CCBHC service encounters provided in that DY are paid that DY’s rebased PPS rate. If the 

state intends to have a different interim payment methodology for the optional annual and 

mandatory rebasing timeframes (DY3 and every three years thereafter), please include a 

description of both methodologies below. If more space is needed, please attach and identify the 

page that pertains to this section. 

7 An interim rate is requested as it is likely that the current DY data will not be available to the state in time to 

analyze and rebase the rate for the upcoming DY.
12 

If Section 2.1 is completed, skip Sections 2.2, 2.3, and 2.4 and continue to Section 3.1. 

Section 2.2: Certified Clinic PPS-2 Methodology (CC PPS-2) 

The CC PPS-2 methodology is implemented as a fixed monthly rate that reflects the expected 

cost of all CCBHC visits provided within any given month to a Medicaid beneficiary. This is a 

cost-based, per clinic rate that applies uniformly regardless of the number of services rendered 

within the month by a CCBHC and qualified satellite facilities established prior to April 1, 2014. 

Under this methodology, separate rates are developed for both the base population and if elected 

to implement by the state, clinic users with certain conditions, or special populations (SP). In 

addition, the CC PPS-2 methodology includes outlier payments that are required to be paid for 

costs exceeding state- defined thresholds and the implementation of QBPs in accordance with 

Section 3: Quality Bonus Payments of the PPS guidance. 

Section 2.2a Components of the CC PPS 2 Rate Methodology 

DYl Rate Data

In the box below explain the source(s) of cost and visit data used to determine the DYl rate. 

Detail any estimates that the state used to determine allowable cost and the appropriate number 

of monthly visits to include in the rate calculation. If more space is needed, please attach and 

identify the page that pertains to this section. 
13 

Annual PPS-2 Rate Updates

The DYl CC PPS-2 rate(s) will be updated between DYs with mandatory rebasing by using 

(select one): 

The Medicare Economic Index (MEI)

Rebasing CC PPS-2 rate

Interim Payment Methodology for Rebasing 

When rebasing PPS rates for an upcoming DY, the PPS rate for the upcoming DY is calculated 

by rebasing the prior DY’s monthly PPS rate so the rate calculated for the upcoming DY reflects 

the prior DY’s cost experience. As the cost and visit data for the prior DY data will not be 

available to the state in time to analyze and rebase the rate prior to the start of the upcoming DY, 

the state will need to pay an interim PPS rate until the PPS rate(s) are finalized for that DY. In 

the box below, please provide an explanation of the interim payment methodology8 that your 

state will use specifying what interim rate the state will pay providers, when the final PPS rate 

would be calculated for that DY, and how the state intends to reconcile claims for that DY to 

ensure that all CCBHC service encounters provided in that DY are paid that DY’s rebased PPS 

rate. If the state intends to have a different methodology interim payment methodology for the 

optional annual and mandatory rebasing timeframes (DY3 and every three years thereafter), 

please include a description of both methodologies below. If more space is needed, please attach 

and identify the page that pertains to this section.

PPS-2 Identification of Populations with Certain Conditions, or Special Populations (SP) 

Under the PPS-2 Methodology states have the option to develop a monthly PPS rate for 

populations with certain conditions, or Special Populations (SP). The state chooses to (select 

one): 

Implement SPs and develop monthly SP PPS Rate(s) as part of the PPS-2 Methodology 

Not implement SPs, therefore no monthly SP PPS Rate(s) will be developed as part of the 

PPS-2 Methodology (Continue to Section 2.2a, PPS-2 Outlier Payments)

8 An interim rate is requested as it is likely that current DY data will not be available to the state in time to analyze 

and rebase the rate for the upcoming DY payment.
14 

In the box below, identify populations with certain conditions for which separate PPS rates will 

be determined by the state and explain the criteria used to identify them. If more space is needed, 

please attach and identify the page that pertains to this section. Note: the populations listed below 

should match those shown on the sample cost report submitted by the state. 

PPS-2 Outlier Payments

Outlier payments are reimbursements to clinics in addition to PPS rates for participant costs that 

exceed a state-defined threshold to ensure that clinics are able to meet the costs of serving their 

users.

In the box below provide a description of the outlier payment methodology including an 

explanation of the threshold for making payment and how much of total allowable cost is set 

aside for outlier payment; how often outlier payment is calculated; and, how often certified 

clinics receive outlier payment. If more space is needed, please attach and identify the page that 

pertains to this section.

If Section 2.2 is completed, skip Sections 2.1, 2.3, and 2.4 and continue to Section 3.2. 
15 

Section 2.3: Certified Clinic PPS-3 (CC PPS-3) 

The CC PPS-3 methodology is implemented as a fixed daily rate that reflects the expected cost 

of all CCBHC services provided on any given day to a Medicaid beneficiary. This is a cost 

based, per clinic rate that applies uniformly to all services rendered by a CCBHC and qualified 

satellite facilities established prior to April 1, 2014. Under this methodology, separate rates are 

developed for both the base population and for at least one of the categories of special crisis 

services (SCS). In addition, under this methodology the state has the option of offering Quality 

Bonus Payments (QBPs) that are to be paid in addition to the PPS rate to any certified clinic that 

achieves on state established thresholds for payment in accordance with Section 3: Quality 

Bonus Payments (QBPs) of the updated PPS Guidance. 

Section 2.3.a Components of the CC PPS-3 Rate Methodology 

Demonstration Year One (DYl) Rate Data

In the box below explain the source(s) of cost and visit data used to determine the DYl rate. 

Detail any estimates that the state used to determine allowable cost and the appropriate number 

of daily visits to include in the rate calculation. If more space is needed, please attach and 

identify the page that pertains to this section. 

Annual PPS-3 Rate Updates

The DYl CC PPS-3 rates will be updated between DYs with mandatory rebasing by using 

(select one): 

The Medicare Economic Index (MEI)

Rebasing CC PPS-3 rates 
16 

Interim Payment Methodology for Rebasing

When rebasing PPS-3 rates for an upcoming DY, the PPS rate for the upcoming DY is calculated 

by rebasing the prior DY’s PPS rate so the rate calculated for the upcoming DY reflects the prior 

DY’s cost experience. As the cost and visit data for the prior DY data will not be available to the 

state in time to analyze and rebase the rate prior to the start of the upcoming DY, the state will 

need to pay an interim PPS rate until the PPS rate(s) are finalized for that DY. In the box below, 

please provide an explanation of the interim payment methodology9 that your state will use 

specifying what interim rate the state will pay providers, when the final PPS rate would be 

calculated for that DY, and how the state intends to reconcile claims for that DY to ensure that 

all CCBHC service encounters provided in that DY are paid that DY’s rebased PPS rate. If the 

state intends to have a different methodology interim payment methodology for the optional 

annual and mandatory rebasing timeframes (DY3 and every three years thereafter), please 

include a description of both methodologies below. If more space is needed, please attach and 

identify the page that pertains to this section. 

PPS-3 Special Crisis Services (SCS) Rates

Under the PPS-3 Methodology states are required to develop a daily PPS rate for at least one of 

the three categories of Special Crisis Services (SCS). The state chooses to implement the 

following SCS categories (select at least one): 

9813 CCBHC mobile crisis services 

Other CCBHC Mobile Crisis services (non- 9813 Mobile Crisis Services) 

Crisis stabilization services occurring at the CCBHC

9 An interim rate is requested as it is likely that the current DY data will not be available to the state in time to 

analyze and rebase the rate for the upcoming DY payment.
17 

In the box below, please describe what demonstration services the CCBHC will provide under 

each category of SCS service the state intends to implement. If more space is needed, please 

attach and identify the page that pertains to this section. Note: the categories listed below should 

match those shown on the sample cost report submitted by the state. 

If Section 2.3 is completed, skip Sections 2.1, 2.2, and 2.4 and continue to Section 3.1. 

Section 2.4: Certified Clinic PPS Alternative (CC PPS-4) 

The CC PPS-4 methodology is implemented as a fixed monthly rate that reflects the expected 

cost of all CCBHC visits provided within any given month to a Medicaid beneficiary. This is a 

cost-based, per clinic rate that applies uniformly regardless of the number of services rendered 

within the month by a CCBHC and qualified satellite facilities established prior to April 1, 2014. 

Under this methodology, separate rates must be developed for both the base population and at 

least one of the categories of special crisis services (SCS). Additionally, states have the option to 

elect separate rates developed for clinic users with certain conditions, or special populations 

(SP). In addition, the CC PPS-4 methodology requires outlier payments that are paid for costs 

exceeding state- defined thresholds and the implementation of QBPs in accordance with Section 

3: Quality Bonus Payments of the PPS guidance. 

Section 2.4.a Components of the CC PPS-4 Rate Methodology 

DYl Rate Data

In the box below explain the source(s) of cost and visit data used to determine the DYl rate. 

Detail any estimates that the state used to determine allowable cost and the appropriate number 

of monthly visits to include in the rate calculation. If more space is needed, please attach and 

identify the page that pertains to this section. 
18 

Annual PPS-4 Rate Updates

The DYl CC PPS-4 rates will be updated between DYs with mandatory rebasing by using (select 

one): 

The Medicare Economic Index (MEI)

Rebasing CC PPS-4 rates

Interim Payment Methodology for Rebasing 

When rebasing PPS-4 rates for an upcoming DY, the PPS rate for the upcoming DY is calculated 

by rebasing the prior DY’s PPS rate so the rate calculated for the upcoming DY reflects the prior 

DY’s cost experience. As the cost and visit data for the prior DY data will not be available to the 

state in time to analyze and rebase the rate prior to the start of the upcoming DY, the state will 

need to pay an interim PPS rate until the PPS rate(s) are finalized for that DY. In the box below, 

please provide an explanation of the interim payment methodology10 that your state will use 

specifying what interim rate the state will pay providers, when the final PPS rate would be 

calculated for that DY, and how the state intends to reconcile claims for that DY to ensure that 

all CCBHC service encounters provided in that DY are paid that DY’s rebased PPS rate. If the 

state intends to have a different methodology interim payment methodology for the optional 

annual and mandatory rebasing timeframes (DY3 and every three years thereafter), please 

include a description of both methodologies below. If more space is needed, please attach and 

identify the page that pertains to this section. 

PPS-4 Identification of Populations with Certain Conditions, or Special Populations (SP) 

Under the PPS-4 Methodology states have the option to develop a monthly PPS rate for 

populations with certain conditions, or Special Populations (SP). The state chooses to (select 

one): 

Implement SPs and develop monthly SP PPS Rate(s) as part of the PPS-4 Methodology 

Not implement SPs, therefore no monthly SP PPS Rate(s) will be developed as part of the 

PPS-4 Methodology (Continue to Section 2.4a, PPS-4 Special Crisis Services) 

10 An interim rate is requested as it is likely that current DY data will not be available to the state in time to analyze 

and rebase the rate for the upcoming DY payment.
19 

In the box below, identify populations with certain conditions for which separate PPS rates will 

be determined by the state and explain the criteria used to identify them. If more space is needed, 

please attach and identify the page that pertains to this section. Note: the populations listed below 

should match those shown on the sample cost report submitted by the state. 

PPS-4 Special Crisis Services (SCS) Rates

Under the PPS-4 Methodology states are required to develop a monthly PPS rate for at least one 

of the three categories of Special Crisis Services (SCS). The state chooses to implement PPS 

rates for the following SCS categories (select at least one): 

9813 CCBHC mobile crisis services 

Other CCBHC Mobile Crisis services (non- 9813 Mobile Crisis Services) 

Crisis stabilization services occurring at the CCBHC

In the box below, please describe what services the CCBHC will provide under each category of 

SCS service the state intends to implement. If more space is needed, please attach and identify 

the page that pertains to this section. Note: the categories listed below should match those shown 

on the sample cost report submitted by the state. 

PPS-4 Outlier Payments

Outlier payments are reimbursements to clinics in addition to PPS rates for participant costs that 

exceed a state-defined threshold to ensure that clinics are able to meet the costs of serving their 

users.
20 

In the box below provide a description of the outlier payment methodology including an 

explanation of the threshold for making payment and how much of total allowable cost is set 

aside for outlier payment; how often outlier payment is calculated; and, how often certified 

clinics receive outlier payment. If more space is needed, please attach and identify the page that 

pertains to this section.

If Section 2.3 is completed, skip Sections 2.1, 2.2, and 2.3 and continue to Section 3.2. 

Section 3: Quality Bonus Payments (QBPs)

Section 3.1: Optional QBPs (CC PPS-1 and CC PPS-3) 

When using the CC PPS-1 or CC PPS-3 methodology, a state may elect to offer a QBP to any 

CCBHC that has achieved on the state-defined threshold for a measure in accordance with 

Section 3: Quality Bonus Payments, of the PPS guidance. No incentive payment shall be made 

solely on the basis of reporting on measures and shall only be paid for CCBHC performance 

improvement at or above the measure threshold. The state can make a QBP for optional QBP 

quality measures provided in the PPS Guidance and may propose its own additional QBP quality 

measures. Any additional state-proposed measure must be approved by CMS. 

The state chooses to (select one):

Not offer QBP(s) (Continue to Section 4) 

Offer OBP(s)

In the box below provide a list of the quality measures that will be used in addition to the 

required QBP measures listed in Section 3 of the PPS guidance. Please note any measure that is 

state-defined and provide a full description of the measure. If additional space is needed, please 

attach and identify the page that pertains to this section. 
21 

In the box below describe the QBP methodology, specifying (1) the state-developed thresholds 

that trigger payment, (2) the methodology for calculating the payment, (3) the amount that will 

be paid for each measure, and (4) how often the payment is made to CCBHCs. Also provide an 

annual estimate of the amount of QBP payment by demonstration year (DY) for all clinics 

expected to be certified, including an estimate of the percentage of QBP payment to be made 

through the PPS rate. If additional space is needed, please attach and identify the page that 

pertains to this section.

In the box below, please specify how the state-developed thresholds were developed in such a 

way where QBPs made to providers are reflective of performance improvement, the provision of 

a higher quality of care, improvement of beneficiary health, or a reduction in health disparities. 

Please also explain how state needs assessments, priorities, and goals were used to determine the 

thresholds for the QBP quality measures. If additional space is needed, please attach and identify 

the page that pertains to this section. 
22 

Section 3.2: Required QBPs (CC PPS-2 and CC PPS-4) 

Under the CC PPS 2 and CC PPS-4 methodologies, a state must offer a QBP to any CCBHC that 

has achieved the state-defined threshold for a measure in accordance with Section 3: Quality 

Bonus Payments, of the PPS Guidance. No incentive payment shall be made solely on the basis 

of reporting on measures and shall only be paid for CCBHC performance at or above the 

measure threshold. The state can make a QBP for optional QBP quality measures provided in the 

PPS guidance and may propose its own additional QBP quality measures. Any additional stateproposed measures must be approved by CMS. 

In the box below provide a list of the quality measures that will be used in addition to the 

required QBP measures listed in Section 3 of the PPS guidance. Please note any measure that is 

state-defined and provide a full description of the measure. If additional space is needed, please 

attach and identify the page that pertains to this section. 

In the box below describe the QBP methodology, specifying (1) the state-developed thresholds 

that trigger payment, (2) the methodology for calculating the payment, (3) the amount that will 

be paid for each measure, and (4) how often the payment is made to CCBHCs. Also provide an 

annual estimate of the amount of QBP payment by demonstration year (DY) for all clinics 

expected to be certified, including an estimate of the percentage of QBP payment to be made 

through the PPS rate. If additional space is needed, please attach and identify the page that 

pertains to this section.
23 

In the box below, please specify how the state-developed thresholds were developed in such a 

way where QBPs made to providers are reflective of performance improvement, the provision of 

a higher quality of care, improvement of beneficiary health, or a reduction in health disparities. 

Please also explain how state needs assessments, priorities, and goals were used to determine the 

thresholds for the QBP quality measures. If additional space is needed, please attach and identify 

the page that pertains to this section. 

Section 4: Payment to CCBHCs that are FQHCs, Clinics, or Tribal Facilities

In some instances, a CCBHC may already participate in the Medicaid program as a Federally 

Qualified Health Center (FQHC), clinic services provider or Indian Health Service (IHS) facility 

that receives payment authorized through the Medicaid state plan. In these instances, the state 

should refer to the PPS guidance for how these Medicaid providers would be paid when a clinic 

user receives a service authorized under both the state plan and this demonstration. 

The state will require each certified clinic on its CCBHC cost report to report whether it is 

dually certified as a FQHC, clinic services provider or IHS facility.

Section 5: Cost Reporting and Documentation Requirements

In order to determine CCBHC PPS rates, states must identify allowable costs necessary to 

support the provision of services. 

Section 5.1: Treatment of Select Costs

CMS provides additional guidance for the state regarding how to treat select costs, including 

uncompensated care, telehealth, and interpretation or translation service costs. 

The state excludes the cost of uncompensated care from its calculation of the CCBHC PPS 

rate(s).
24 

Section 5.2: Cost Report Elements and Data Essentials 

Cost Reporting 

The state will use the CMS CCBHC cost report and has attached a sample completed 

CCBHC Cost Report form plus an explanatory narrative that demonstrates the rate for DY1. 

The state will use its own cost report and has attached a sample completed CCBHC Cost 

Report form plus an explanatory narrative that demonstrates the rate for DY1 and the cost 

report instructions. 

The attached state-developed cost report template includes following key elements as specified 

in section 4.2 of the PPS guidance: 

Provider Information

Direct and Indirect Cost-Identification

Direct and Overhead Cost-Allocations

Number of Visits

Rate Calculations

Section 6: Managed Care Considerations

The statute requires payment of PPS and allows payment to be made through FFS and/or through 

managed care delivery systems for demonstration services. If the state chooses to include 

CCBHC service coverage in their managed care contracts, CCBHCs must still receive the full 

PPS payment. 

Section 6.1: Managed Care Capitation CCBHC PPS Rate Methodology 

Please check the box if at least some, if not all of the CCBHC services under the 

demonstration will be delivered through managed care.

Please check the box to confirm that the PPS methodology selected in Section 2 will apply 

to CCBHC demonstration services delivered in both managed care and FFS. 

Please check the box if none of the CCBHC services under the demonstration will be 

delivered through managed care. (Continue to Section 7) 
25 

Section 6.2: Building CCBHC PPS Rates into Managed Care Capitation 

CMS offers states the option of using either of the following methodologies for incorporating the 

CCBHC rate into the managed care payment methodology (select one): 

Fully incorporate the PPS payment into the managed care capitation rate and require the 

managed care plans to pay the full PPS. 

Explain how the state will provide adequate oversight to ensure CCBHCs receive the actual 

PPS rates, including provisions for special populations and outlier payments, as applicable 

(PPS-2 and PPS-4). If additional space is needed, please attach and identify the page that 

pertains to this section.

OR

Require the managed care plans to pay a rate to the CCBHCs that other providers would 

receive for similar services, then use a state supplemental payment (wraparound) to ensure 

payment to CCBHCs is equal to the PPS. 

Explain how the state will provide adequate oversight related to reconciling managed care 

payments with full PPS rates, including provisions for special populations and outlier payments. 

If additional space is needed, please attach and identify the page that pertains to this section.
26 

Explain the frequency and timing of the wraparound payment used by the state: 

Section 6.3: Managed Care Delivery System Operational Considerations 

Strategies for avoiding duplication of payments: There is significant variation of how services 

are delivered through Medicaid managed care. Several states contract with PIHPs and PAHPs 

that specialize in behavioral health services. Medicaid enrollees may be members of a PIHP or 

PAHP and MCO at the same time. As such, a CCBHC may not be aware which managed care 

plan is responsible for payment of behavioral health services. Please indicate the contractual 

arrangement(s) that will be delivering services under the demonstration: 

CCBHC demonstration services will be delivered by multiple managed care plans (MCOs, 

PIHPs, PAHPs). 

OR: 

The state will require all CCBHC services to be delivered under the contract for one 

managed care plan.

Describe which managed care plans will be responsible for providing CCBHC services and what 

services provided in other managed care plans may duplicate the CCBHC services. 
27 

Explain the methodology for removing services that duplicate CCBHC demonstration services 

from the managed care plans not responsible for the CCBHC services, how managed care 

capitation rates will be changed, the timing/process for determining that the new managed care 

rates will be actuarially sound, and how the state will ensure no duplication of expenses. If 

additional space is needed, please attach and identify the page that pertains to this section. 

If a state chooses not to include all demonstration services under one contractor, define the 

delineation of services between contractors. If this delineation will require a change to managed 

care capitation rates, explain how rates will be affected, the timing and process for determining 

that the new managed care rates will be actuarially sound, and how the state will ensure nonduplication of payments. If additional space is needed, please attach and identify the page that 

pertains to this section.

Section 6.4: Data Reporting and Managed Care Contract Requirements

Describe the data reporting polices and processes, including specific data deliverables to be reported 

by each entity, collection of data, timing of reporting, and contract language for data reporting. If 

additional space is needed, please attach and identify the page that pertains to this section. 
28 

Explain how the state will ensure access to CCBHC services from Managed Care Organizations 

(MCO), Prepaid Inpatient Health Plans (PIHP), or Prepaid Ambulatory Health Plans (PAHP), 

particularly how it will address out-of-network access to CCBHCs. Please also indicate if the 

state plans to develop quantitative networks adequacy standards specific to CCBHCs (note: this 

is recommended but not required). If additional space is needed, please attach and identify the 

page that pertains to this section. 

Section 6.5: Identification of Expenditures Eligible for Enhanced Federal Matching 

Percentage (FMAP)

Describe the process whereby the state will ensure proper claiming of enhanced FMAP for 

CCBHC services by identifying the portion of the capitation payment(s) applicable to the 

services/populations that are eligible for the enhanced match. States should reference the SMD-23-

0005 guidance CMS issued in August 2023 on Medicaid managed care claiming methodologies. If 

additional space is needed, please attach and identify the page that pertains to this section.
29 

Section 7: Identifying CCBHC Claims and Service Level Encounter Detail 

States participating in the CCBHC demonstration must have a mechanism for identifying claims 

attributable to the CCBHC demonstration as well as service level detail of the CCBHC services 

provided during the encounter. The CMS Alpha Numeric Healthcare Common Procedure Coding 

System (HCPCS) File & Code Sets contain dedicated 223 demonstration encounter “T” billing 

codes that are for CCBHCs to bill solely for demonstration encounters and a Q2 billing code 

modifier that can be used for billing service-level data associated with each demonstration 

encounter. 

The State will use one of the following mechanisms to identify claims attributable to the CCBHC 

demonstration (select one):

T1040 Medicaid certified community behavioral health clinic services, per diem 

demonstration billing code 

T1041 Medicaid certified community behavioral health clinic services, per month 

demonstration billing code 

Another state-developed mechanism for identifying CCBHC claims, as described below. 

The State will use one of the following mechanisms to identify the service level detail associated 

with each demonstration encounter (select one):

Q2 Demonstration procedure/service modifier 

Another state-developed mechanism for identifying service level detail associated with each 

demonstration encounter, as described in detail below. 
30 

Section 8: Funding Questions: Section 223 Behavioral Health Demonstration

The questions below should be answered relative to all payments made to CCBHCs reimbursed 

pursuant to Section 223 of P.L. 113-93 Protecting Access to Medicare Act of 20143 and the 

methodology described in the state’s application to participate in the demonstration program. 

CMS requests the following information about the source(s) of the non-federal share of payment 

made for demonstration services. 

1. Section 1902(a)(2) stipulates that the lack of adequate funds from local sources will not result

in lowering the amount, duration, scope, or quality of care and services available under the

plan.

a. Describe how the non-federal share of each type of Medicaid payment (e.g., basic PPS

rate, outlier payment and quality bonus payments) is funded.

b. Describe whether the state share is from appropriations from the legislature to the 

Medicaid agency, through intergovernmental transfer agreements (IGTs), provider 

taxes, or any other mechanism used by the state to provide state share. Note that, if the 

appropriation is not to the Medicaid agency, the source of the state share would 

necessarily be derived through an IGT. In this case, please also identify the agency to 

which the funds are appropriated.
31 

c. If any of the non-federal share of payment is being provided using IGTs, fully describe

the matching arrangement including when the state agency receives the transferred

amounts from the local governmental entity transferring the funds.

d. For any payment funded by IGTs, please provide the following information:

i. A complete list of the names of entities transferring funds;

ii. The operational nature of the entity (state, county, city, other);

iii. The total amounts transferred o by each entity;

iv. Clarify whether the transferring entity has general taxing authority: and,

v. Whether the transferring entity received appropriations (identify level of appropriations)
32 

2. Do CCBHC providers receive and retain the total Medicaid expenditures claimed by the state

for demonstration services (includes PPS and quality bonus payments) or is any portion of

the payments returned to the state, local governmental entity, or any other intermediary

organization?

If providers are required to return any portion of payments, provide a full description of the 

repayment process. Include in your response a full description of the methodology for the 

return of any of the payments, a complete listing of providers that return a portion of their 

payments, who they return the funds to (state, local governmental entity, or any other 

intermediary organization), the amount or percentage of payments that are returned, and the 

disposition and use of the funds once they are returned (e.g., general fund, medical services 

account, etc.).