How Peregrine’s Mental Health Model Turns Caring for Underserved Communities into Smart Business

Over the last decade, there has been an explosion of behavioral health startups in the market.

The vast majority of those companies focus on lower acuity care for commercial pay patients or employer-based programs. Despite the need for services, startups have largely ignored the underserved population with public health insurance.

But Nashville, Tennessee-based Peregrine is looking to change that paradigm. Founded in 2019, the behavioral health company partners with Federally Qualified Health Clinics (FQHCs), Rural Health Clinics (RHCs) and other primary care providers to help provide behavioral health services and operational support products.

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The company recently closed a $5 million equity funding round led by BIP Ventures, Martin Ventures, and Chapman Capital.

Primary care practices, including FQHCs and RHCs, are typically the front door of the health system. However, many clinics lack the appropriate staff or resources to address their patient’s behavioral health concerns.

“Primary care providers, FQHC and RHCs, are the majority of our customers because they are the primary care providers that are serving the underserved community in the United States,” Ryan Chapman, founder and CEO of Peregrine Health, told Behavioral Health Business. “We partner with them, bringing practice care and clinical support. That includes the staffing, predominantly through LCSW, MDs, psychiatrists, and all the oversight required. [Visits are] done via telehealth and in-person. We also bring all the operational support.”

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The startup also has technology and data products.

Because of the low reimbursement rates, many behavioral health providers have shied away from caring for Medicaid beneficiaries. However, the partnership model has created an avenue for a behavioral health provider to sustainably care for patients on public health insurance, according to Chapman.

“The FQHC and the RHC infrastructure are government designations that were created to provide healthcare services to those that are covered by federal payers. … They receive a reimbursement rate that you can sustainably provide service to behavioral health services under,” Chapman said. “We’re able to care for those people that need those services in a way that you can profitably do so by partnering with that primary care clinic that has that reimbursement structure in place already.”

The organization has 43 partnerships in 17 states that cover roughly 650,000 patients.

Fueled by the new round of capital, Peregrine plans to invest in the technology component of the business. Additionally, the company will focus on ensuring data availability and staffing.

While the company mainly operates on a fee-for-service basis, Chapman noted that it could move towards value-based care in the future.

“We are doing incredible work for people that either didn’t have access to services before or had extremely poor access,” he said. “Often prior to us building a partnership … folks had to drive hours to find a therapist that would take Medicaid. .. So we believe what we are doing already lends itself very well to value-based arrangements in the future.”

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