Medicaid

1. Medicaid The Real Problem with Child Welfare Funding Tracey Feild Institute for Human Services Management

2. The Title IV-E Straitjacket • The Pew Commission argues that Title IV-E is too categorical to provide the flexibility to meet the needs of children and families.

3. Federal Funding for Child Welfare • Title IV-E provides reimbursement for: • Room and board for children in out-of-home care; • Adoption subsidies; • Administrative and case management costs for children in out-of-home care, and • Administrative and case management costs for preventing the need for out-of-home care.

4. Federal Funding for Child Welfare • Title IV-B provides reimbursement for a wide range of services for children and families in the child welfare system. • Title XX (SSBG) provides funds for a wide rate of social services. • TANF provides funds for services to keep families independent and intact.

5. Federal Funding for Child Welfare • Medicaid provides reimbursement for: • Medical services for eligible children and families; • Therapeutic services for eligible children and families; • Rehabilitative services for eligible children and families.

6. Federal Funding for Child Welfare • Among these 5 federal programs, virtually any services needed for a child welfare family could be reimbursed. • The problem is that SSBG, Title IV-B, and TANF are all block grants or capped allocations, meaning that the funds allocated to a state are limited.

7. The Unique Nature of Entitlement Programs • Title IV-E and Medicaid are entitlement programs, meaning that the federal government guarantees that it will share in all allowable costs for all eligible persons, regardless of the spending level.

8. Federal Funding Maximization Rule of Thumb • In order to maximize federal revenues, and minimize the need for state and/or local funds, the general rule is to: • First, claim everything possible to entitlement programs. • Second, spend capped federal funds. • Lastly, fill in with 100% state/local funds.

9. Why is there a need for more flexibility? • Because, unlike Title IV-E, capped federal funds have not increased with the need. • SSBG funds have decreased 43% since 1981. • Title IV-B funds have increased 200% since 1981. • Because Medicaid is difficult to access, and doesn’t meet therapeutic and rehabilitative needs of eligible children – it is a roadblock!

10. The Title IV-E Waiver • The only real increases in federal funding in child welfare have been in Title IV-E. • Federal costs have increased 2000% since 1981. It’s the only federal child welfare funding source that has seriously grown. • It’s no wonder everyone looks to more flexibility in Title IV-E to meet all of the funding shortfalls in child welfare!

11. Title IV-E Has Been Used to Overcome the Medicaid Roadblock • 15 (of 25) waivers used Title IV-E for behavioral health services. • 4 (of12) new waiver applicants propose using IV-E for BH services.

12. Question: • Why should states need to use IV-E funds to pay for behavioral health services when there is federal reimbursement for behavioral health services through Medicaid? • 95% of foster children are Medicaid-eligible; about 50%+ of in-home children and families are Medicaid-eligible.

13. Medicaid and EPSDT* • Medicaid’s purpose is to provide health and rehabilitative services to eligible low income families. • Since 1989, federal law requires that any service needed by an eligible child must be provided regardless of the individual states’ Medicaid program limitations. * Early and Periodic Screening, Diagnosis and Treatment program

14. Medicaid Spending • While 47% of the Medicaid recipients are children, only 16% of the funds are spent on children. • This 16% includes all physical health care needs, dental health care, and mental health care. • Children are not the cause of Medicaid spending problems.

15. The Medicaid Roadblock • The Medicaid roadblock has led to “the IV-E straitjacket”. • It is because Medicaid is unresponsive to the special needs of the child welfare population that Title IV-E looks like a straitjacket. • Appropriate and costly therapeutic services are not always billable to Medicaid, even for eligible children and families.

16. Medicaid Behavioral Health Services • Typically controlled by State behavioral health/ mental health system. • BH/ MH systems see their role as serving all clients in need – Medicaid and non-Medicaid. • Services are limited by availability of non-federal match for Medicaid, and by all state or local funds for non-Medicaid eligibles.

17. Tough Resource Choices • Since need for BH/ MH services is far greater than available funds, MH administrators are forced to make tough choices to limit access to services. • Adults vs. children • General population of children vs. other system children (child welfare, juvenile justice) • High need children vs. low need children

18. Techniques to Limit Cost of BH/ MH Services • Limit desire for services • Offer only narrow range of office- or community-based services • Use providers without training or expertise in child abuse/ neglect issues • Restrict clients eligible for services • Define “medical necessity” criteria very narrowly • Limit maximum allowable units of service

19. Techniques to Limit Cost of BH/ MH Services (cont.) • Limit providers • Offer low reimbursement rates, so few providers available, resulting in long wait lists for services • Use intimidating audit procedures designed to discourage providers from billing • Require overly burdensome documentation requirements to discourage providers from billing

20. Impact is BH/ MH System is Not Responsive to Needs of CW • The system established by feds to meet the behavioral health needs of children, including the child welfare population, only marginally achieves that goal. • “Plan A” doesn’t work. • State child welfare administrators have been forced to develop “Plan B” to get access to needed BH/ MH services.

21. “Plan B” for BH/ MH Services • Use 100% state/ local resources, without any federal reimbursement, to purchase needed services. • Use limited block grant funds (SSBG or TANF) to purchase needed services. • Use capped federal funds (Title IV-B) to purchase needed services. • Use Title IV-E funds, through the waiver, to purchase needed services.

22. Why doesn’t “Plan A”, the Medicaid program, work for child welfare? • It could! • Problem is that access to Medicaid reimbursement is through BH/ MH system. • BH/ MH system is forced to control access to services to live within its budget. • CW doesn’t have that luxury; we must meet needs of CW population.

23. BH/ MH: Medicaid is Part of a Unified Program • Typically BH/ MH systems have a single system of services, single set of criteria to access services. • All clients have same access, regardless of eligibility. • But access has to be controlled in order to stay within budget. • Access is controlled through one or more techniques.

24. BH/ MH Mode of Operations • If: • You don’t meet the criteria for a service, or • The service doesn’t meet your needs, or • You have to wait for services because you cannot find a provider with an opening; or • You don’t feel the provider understands your issues, • Too bad. Solution: Go without the service!

25. CW Mode of Operations • If you need a service, child welfare is required to provide it, particularly for custody children. • If service is not accessible through BH/ MH system, CW has to find an alternative. • Because of lack of funding, CW has not done this well. • Only 2 of the 40 states with completed federal CFSRs passed the mental health performance standard.

26. CW Mode of Operations • Alternative may be to: • Purchase a service outside of Medicaid (possibly through a IV-E Waiver or with local funds), or • Provide a less appropriate substitute service.

27. CW: Medicaid is Only a Fund Source • To child welfare, Medicaid for BH/MH services is not a unified program of services, it is merely a fund source to be tapped to pay for services it must provide anyway. • If therapeutic services will be provided regardless of who pays for them, it only makes sense to use Medicaid to help pay for them whenever possible.

28. Squandering State/ Local Resources • Not using Medicaid to pay for these services only serves to save federal Medicaid dollars. • The state/ local agency spends more because it uses limited funds to pay for services partially fundable with unlimited federal funds.

29. Use Limited Funds to Pay for Leftover Costs • Limited block grant funds (SSBG), capped federal allocations (IV-B), and 100% state/ local funds should be used to fund social services and services to federally-ineligible clients, not to fund services that can be federally reimbursed with entitlement funds.

30. Using limited federal funds or state/local funds to pay for therapeutic services reimbursable through Medicaid would be like paying for room and board costs with SSBG funds, or all local funds when placing a IV-E eligible child in a licensed foster home. • It just doesn’t make sense!

31. Using IV-E and Medicaid Entitlements • CW could use non-federal funds to match: • IV-E for board and care; • Medicaid for therapeutic and rehabilitative services, or • Both, as needed.

32. Why doesn’t this work the way it should? • State attitudes toward growth in Medicaid spending; • BH/ MH fears of high needs of child welfare population; • Historic lack of evidence that child welfare population is at unique risk of poor health, mental health, emotional, developmental, educational, vocational outcomes.

33. Solving the Problem • The Pew Commission recommends: • Removing eligibility for foster care and adoption assistance. • Combining IV-E admin and training with Title IV-B. • They acknowledge that, like the Title IV-E waiver, this recommendation is designed to be cost neutral.

34. Block Grant vs. Entitlement • So the only advantage to Pew’s proposal is having a flexible, modestly enhanced and expanded IV-B program, which includes IV-E admin costs and training. • But giving up the entitlement nature of both training and admin/ case management costs will be a huge mistake! • Pew’s recommendations are merely a shift, but a shift with no real advantage.

35. Block Grant vs. Entitlement • Entitlement funding is what allows the program to grow. • Requirement for non-federal match allows state/local agencies to leverage state/local funds. • Title IV-B has never had increases comparable to entitlement funding. • Even with a 2% growth rate and inflation, that may just cover salary increases, not increased numbers of staff, or new enhancements in IS, or new program development.

36. What happens when you spend your entire IV-B grant, but need more? • You will have to ask for 100% local funds to increase staffing levels. • You will have to ask for 100% local funds to increase training. • You will have to ask for 100% local funds to fund new program development or additional home-based services.

37. Capped Allocation vs. Entitlement • Any effort to undo the entitlement nature of any portion of Title IV-E is a mistake. • It may look like a good deal now, with a $200 million increase, but in five years, it will look just like TANF looks now compared to when it was first implemented.

38. An Alternative Solution • Make two technical changes in Title IV-E: • De-link eligibility from 1996 standard, change to a regularly-updated, state-based poverty standard. • Allow for assisted guardianships as an allowable and reimbursable placement alternative. • Give child welfare independent access to Medicaid.

39. Medicaid • Research evidence of unique health risks of abused and neglected children now exists. • It is sufficient to warrant a separate Medicaid program, separate set of services for the child welfare population. • States could develop a new program of services designed specifically for the CW population, without any involvement of the mental health system.

40. Therapeutic and Rehabilitative Services for Abused & Neglected Children • Program could be defined by the child welfare system, including: • Service array, • “Medical necessity” criteria, • Provider qualifications, including use of para-professionals, • Rate setting procedures and rates, • Units of service, documentation requirements, audit procedures.

41. IV-E is not a straitjacket • IV-E was designed to meet specific needs as an unlimited entitlement program, just like Medicaid. • (No one refers to Medicaid as a straitjacket because it doesn’t pay for room and board!)

42. “Fear of Medicaid” is a Disadvantage to CW • Many CW administrators see Medicaid as too complicated, too rigid, too restrictive. • But Medicaid is set up that way by state administrators in order to reduce access and utilization. • It doesn’t have to be that way!

43. Examples of Medicaid Services • Targeted case management: Used to provide intensive case management to SED children. Unit of service can be monthly, based on one face-to-face contact, rather than documented in 15-minute increments.

44. Medicaid Service Examples • Day treatment for children and youth; • Day treatment for children ages 2 through 5; • Rehabilitative day treatment.

45. Medicaid Service Examples • Comprehensive behavioral health assessment; • Interpretation or explanation of results of psychiatric examination; • Development of individualized treatment plan; • Treatment planning and review.

46. Medicaid Service Examples • Intensive therapeutic on-site services: Provided in the child’s home or foster home, and includes the provision of therapeutic services, teaching problem solving skills, behavior strategies, normalization activities to maximize strengths, reduce behavior problems or functional deficits that interfere with personal, familial, education, vocational or community adjustment.

47. Medicaid Service Examples • Intensive community-based treatment: Designed to provide the necessary treatment to a child and family (substitute or natural) to allow the family to remain intact, thus preventing the need for long term residential or hospital psychiatric care on the part of the child. Services include assessment, family therapy, collateral intervention with schools, social service and juvenile justice agencies and other systems affecting the child; and assistance in household management, self-management and family management.

48. Medicaid Service Examples • Rehabilitative skills training: Provided to children who need periodic intervention in to their living environment to achieve stable, successful long-term outcomes. Skills trainers participate in behavior management and remedial skills training.

49. Designing a Medicaid Program that Fits Child Welfare • Child welfare can design service definitions that meet needs for in-home services; • Child welfare can design medical necessity criteria that include child protective issues beyond mental health diagnostic issues; use of “V” codes, or “at risk” codes in DSM-IV, but allow child welfare to control access to services (or to “keep the gate”).

50. Designing a Medicaid Program that Fits Child Welfare • Child welfare can design practitioner requirements that allow for licensed social workers, and para-professionals (under the supervision of licensed professionals) to provide services, but can also require expertise, training, or even certification in child abuse/ neglect issues.