Since the outbreak of the war on 7 October 2023, Israel has faced one of the most complex mental health (MH) crises in its history (See update “The National Mental Health Program”). The current change in payment mechanisms for outpatient MH aims to shift care from inpatient to outpatient settings, promote the development of high-quality services within general hospitals and integrate in- and out-patient care, along with physical and mental health.
Until November 2024, outpatient psychiatric and psychological care was paid for by bundled payments that covered one of three possible packages of services (known as “episodes of care”): diagnostic services, short-term treatment, and long-term treatment. Each episode included a minimum number of services, for example, “short-term treatment” included up to six consultations with a MH professional for adults and eight for children. The packages of services were paid prospectively, and there was a unique tariff for each package regardless of the types of service provided.
- New bundled payments aim at promoting outpatient MH care: From 15 November 2024, payments changed to a retrospective bundled episode of care package. Tariffs now vary according to the type of service provided. The new “package” includes 15 encounters and is valid for one year, but the final tariff is set retrospectively based on the type of care provided during these encounters – for example, individual psychotherapy, group psychotherapy, follow-up phone visit, remote psychotherapy and more. Once a “package” is fully used up, the patient’s needs are reassessed; the MH clinic sends a medical summary of the service provided during the package to the payer (health plan, HP) along with a treatment plan (if needed). If necessary, the HP issues a new “package of care” to continue treatment.
- Higher per diem tariffs and introduction of pay for quality (P4Q) payments for MH inpatient care: the MoH increased the MH per diem tariffs paid by the HPs, which were considered to be too low for hospitals to provide high-quality care. In addition, the MoH will directly pay P4Q payments to hospitals that meet quality indicators.
- The MoH will pay for “MH rehabilitation programs”, instead of the HPs. These services will be funded with earmarked funds allocated by the MoH.
- The reform aims to promote home hospitalization as an alternative to full psychiatric hospitalization through more flexible financial arrangements between HPs and hospitals.
- Exemptions from copayments for MH Emergency Room Visits: the HPs will fully cover visits to emergency rooms in mental health centres even if no hospitalization is needed.