When an employee member faces a mental health crisis, where do they go? For many, the only options they consider are either weekly outpatient care or an inpatient hospitalization. However, there are middle grounds that are often overlooked, and that gap is costing employers millions while leaving members without the care they need.
We see this pattern repeatedly: members bypass necessary intermediate care and land in emergency departments, not because their condition demands it, but because they don’t know where else to turn, or those middle options simply aren’t readily available when they need them.
The Least Restrictive Care Principle
“The overall goal is for a patient to receive the least restrictive level of care that can safely and effectively treat their condition,” explains Dr. Sarah Andrews, former Assistant Professor of Psychiatry and Behavioral Sciences at the Johns Hopkins University School of Medicine, and now Telligen’s Medical Director. “Based on the presentation and the clinical factors, we’re deciding where they settle in and what would be most appropriate.”
This principle is not only about clinical best practices, but also considering quality of life and how care fits into a member’s everyday life. Appropriate levels of care can differ based on an individual’s needs. Even if someone requires a higher level of care, this can often be achieved while they continue working, maintaining relationships, and staying active in their communities while getting the treatment they need. But achieving this balance requires options, and that’s where the system often fails.
The Missing Middle: Understanding IOP and PHP
Most people are familiar with traditional outpatient therapy (weekly or bi-weekly sessions) and inpatient hospitalization. What many don’t realize is that there are two levels between that are often overlooked: Intensive Outpatient Programs (IOP) and Partial Hospitalization Programs (PHP).
IOPs typically meet 2-3 times per week for several hours, providing structured treatment for moderate to severe conditions without requiring members to leave their lives entirely. PHPs go further, offering daily treatment five days a week for several hours each day.
“The goal of PHPs and IOPs is to stabilize their needs and prevent unnecessary hospitalization.” Dr. Andrews notes, “These are individuals who do not require 24-hour supervision, but they need structured treatment sessions and frequent interactions with healthcare professionals to monitor progress and make adjustments accordingly.”
Yet these programs remain dramatically underutilized. “Oftentimes someone will transition directly from outpatient care and go immediately to inpatient care without considering intermediate options. And sometimes that’s just based on availability – based on being able to get into a program.”
The result? Members who could recover effectively in a PHP setting instead end up hospitalized at three times the cost, or they attempt to manage at the outpatient level until their condition deteriorates into a true crisis.
The Escalation Cascade: When Access Gaps Drive Crisis
Restricting access to outpatient and intermediate care doesn’t save money, it drives members toward the most expensive settings.
“There’s an inverse relationship between restricting outpatient access and then driving higher, more expensive acute care utilization,” Dr. Andrews explains. “If someone doesn’t have access to outpatient or IOP, then they might end up going through the ER and receiving a higher level of care that they might not actually need.”
We see this pattern regularly, a member struggles to get an outpatient appointment or faces prior authorization delays. Their condition worsens. Eventually, they end up in the emergency department, not because they need that level of intervention, but because all the appropriate intermediate options were inaccessible.
“Access gaps create a dangerous escalation pattern. When members can’t access intermediate care levels, they receive fragmented, under-resourced treatment. Their clinical situations worsen as a result, ultimately requiring higher levels of care than would have been necessary with appropriate early intervention.”
“They tend to get underserved clinically,” Dr. Andrews notes when asked what happens when appropriate care levels aren’t available. “Since they’re getting underserved, their clinical situation worsens, ultimately requiring higher levels of care, such as emergency or inpatient services, than would have been necessary with appropriate early intervention.
It’s a costly escalation cascade, three steps forward, two steps back, with members cycling through increasingly intensive (and expensive) levels of care that could have been prevented with timely access to appropriate treatment.
The Step-Down Availability Gap
Even when members do access higher levels of care appropriately, getting them back to lower levels becomes its own challenge. The issue isn’t clinical readiness, but system capacity.
“As the medical director for inpatient services, I coordinated patient care for years,” Dr. Andrews reflects. “And the biggest thing is from day one, when someone comes in and is admitted, that’s the day that discharge planning happens. Not after things have stabilized.”
But planning means little without available options. “If a patient needs a step-down level of care, such as residential treatment or even IOP, often times the patient may remain on the inpatient unit until an appropriate step-down placement is obtained.”
This reality can often put members between a rock and a hard place: “One program that might be close to where a patient lives, but there is not an intake appointment available for another two weeks. Is the patient appropriate to go home and not have those resources for two weeks, or do they need to stay in the hospital?”
These daily realities inflate costs and keep members in inappropriate care settings longer than medically necessary.
Crisis Centers: The ER Alternative Employers Should Know About
Behavioral health crisis centers are another option that’s gaining traction. Unlike general emergency departments, these specialized facilities focus exclusively on mental health crises with trained staff and appropriate resources.
“They’re a great addition to communities,” Dr. Andrews notes. “Mental health-focused crisis services can assist in appropriately evaluating and triaging patients. These centers have the resources to refer patients to the most appropriate level of care.”
Care Managers: Bridging Clinical Plans and Real Life
Care managers don’t just coordinate appointments, they bridge gaps between what clinicians recommend and how to make it work in a member’s real life.
“When someone gets discharged from the inpatient unit, typically medications are going to change,” Dr. Andrews explains. “A care manager can go through all the medication changes, being able to sit down with patients and outline – how are you going to get this medication? When are refills due?”
It goes beyond logistics: “Being able to provide the resources where a member can access, how am I going to get to this IOP program? What route should I take? How am I going to get there? All those things essential.”
“Care managers can bridge that gap between different providers and how to actually implement the plan,” Dr. Andrews notes. At Telligen, we’ve seen this approach prevent readmissions, reduce ER utilization, and most importantly, help members recover rather than cycling through the system.
Questions Employers and Brokers Should Be Asking
If you’re an employer or a brokerage representing one, here are the questions you should be asking your potential behavioral health utilization management vendors, if applicable:
On Clinical Quality and Access
- What are your actual wait times for IOP and PHP programs?
- What recognized clinical criteria standards do you use for medical necessity determinations?
- Are crisis centers included in your network?
On Care Navigation
- Do you provide care navigators to help members find in-network providers quickly?
- How do you support transitions between levels of care?
- What happens when a member is clinically ready to step down but programs have waitlists?
On Authorization Philosophy
- Do you implement “no review periods” for initial behavioral health visits to ensure immediate access?
- How do you avoid the inverse relationship between restricting outpatient access and driving expensive acute care utilization?
The Bottom Line
The gap between outpatient therapy and inpatient hospitalization is filled with cost-effective, clinically appropriate options that most members never access, not because they don’t need them, but because the system makes them too difficult to find or utilize.
For employers, addressing this missing middle is about ensuring your members get the right care, at the right time, in the right setting. When we remove barriers to appropriate care, everyone benefits: members recover faster, claims costs decrease, and your workforce stays healthier.
To speak with a Telligen Health and Well-Being expert about how to identify levels of care within behavioral health for your organization, please visit: https://www.telligen.com/contact-an-expert-hwb/