Paths to Payment under Medicaid: The Web We Weave for Mental & Substance Use Disorders Treatment

1. Paths to Payment under Medicaid: The Web We Weave for Mental & Substance Use Disorders Treatment Rita Vandivort-Warren Organization and Financing Branch Div of Services Improvement, CSAT

2. MH/SA Treatment is 7.5 Percent of All Health, 2001 SA = 1.3% SA = $ 18.3 billion MH = 6.2% MH = $ 85.4 billion All Health, 2001 All Health = $1,372.5 B MH/SA = 7.5 $104 billion

3. The Proportion of Public Spending in SA Treatment Grew between 1991 and 2001 All SA, 2001: Public, 76% All Health 2001 Public, 45% All SA, 1991: Public, 62% All SA = $11.4 B Public = $7.1 B Private = $4.3 B All Health = $1,373 B Public = $613 B Private = $759 B All SA = $18.3 B Public = $13.8 B Private = $4.5 B

4. Private and Public Average Annual Growth Rate, 1991 - 2001 Average Annual Growth Rate

5. State & Counties Design and Administer 63% of All SA Spending in 2001

6. Public Payments to SA Grew Faster: Annual Growth Rates, 1991 to 2001 Overall SA Growth Rate: 4.8

7. Private Insurance & Over All SA Services, 1992–2001

8. Percent Change in SA Outpatient Services, 1992–2001

9. Although Medicaid Portion of All MH/Sa Tx Spending is Large, Especially MH • 27% of all MH • 19% of all SA SUD Tx $: 1.5% MH Svc $ 10% Medicaid MH/SA as Portion in Total Medicaid Spending: All Medicaid $ 225, 511 Billion

10. SA/MH of All Expenditures, Each Payer, 2001 * Medicaid includes Federal and State Dollars ** Other Federal includes VA, DOD, Block Grant etc 22.3%

11. State Childrens Health Insurance Program (SCHIP) Facts • 1997, Title XXI, SCHIP; States choose either Medicaid expansion, separate “commercial” MCO/HMO plan with narrow and limited benefits for MH/SA • If Medicaid expansion, EPSDT entitlement • Separate SCHIP plans, • No SA requirements; weak MH • no “prevention or screening” requirement; • medical necessity only to “cure” not ameliorate • In 2004, SCHIP enrolled 3.9 million children, Medicaid 41.3 million children • Deficit Reduction Act: Prohibit SCHIP $ for childless adults

12. Separate SCHIP      Medicaid Expansion      Combo MH/SA Benefits in 36 Separate Programs *16 states provide MH benefit available through Medicaid * 20 states separate benefit, usually both SA and MH, with limits SCHIP State Design, 2002

13. Inpatient Only for Detox Inpatient SA Tx & Detox Outpatient SA Opioid Treatment Residential Treatment Inpatient MH Outpatient MH # States That Have Coverage- Limit Day/$ 4 3 (75%) 17 16 (94%) 21 20 (95%) 5 ? 6 ? 21 19 (90%) 21 17 (81%) Coverage Limitations for MH/SA for 21Separate SCHIP Programs In 9 of 21 States, Combined MH and SA Benefits

14. MH/SA Services: Paths to Inclusion Under Medicaid Coverage • Waivers and Managed Care Program • EPSDT for Children and Youth • Through State Plan Amendment: • Rehab Option • Targeted Case management • Other Providers • Clinic Services • Collateral Contacts

15. Waivers and Managed Care • Waivers to mandatory enroll Medicaid beneficiaries: 1915b Waiver: • largely irrelevant as 1997 Balanced Budget Amendment allowed involuntary managed care enrollment without waiver if certain consumer protections • Under 2006 Deficit Reduction Act (DRA), Medicaid programs need not meet standards of comparability, statewidedness, freedom of choice (State Medicaid Director, 3/06, #06-008) 1915c Home and Community Based Waiver: Under 2006 Deficit Reduction Act (DRA), can implement svc without waivers and now IMD less an obstruction 1115 Waiver: Research; support state health reform i.e. HIFA; more states are using, especially to make special agreements on aspects that CMS doesn’t like – IGT, UPL, DSH

16. Recent 1115 Waivers Changing Key Medicaid Elements (C. Mann) • Conversion to defined contribution (away from defined benefit) • Annual dollar caps on benefits • Enrollment caps allowed • EPSDT waived (in one state) • Per person and global caps on federal $ • Inter Gov’t Transfer to Certified Public Expenses (CPE) • DSH into Safety Net Care Fund (SNCF) • In Waiver Approval Processing • Closed negotiations between CMS and Gov/State agency – State seeks input, CMS does not • States negotiate to keep $ - FL in UPL; MA in DSSH • No written rules – States ask “Did I get as good a deal?”

17. EPSDT – Early Periodic Screening, Diagnosis & Treatment • EPSDT mandate passed in 1969, but expanded in 1989 to explicitly include Mental illnesses (include SUD) and developmental delays • Must cover all svcs Medicaid pays, even if not in State’ Medicaid state plan • When studied MHSA screening instruments, 16 states recommended tool for MH; 4 states for SA • Primary care MD’s often don’t screen because don’t know what to do with a positive screen – build it • Children <19 y/o in DRA Benchmark Plan • must have wraparound of EPSDT services; state plan must specify how ensure • Not clear what this includes

18. MANDATORY SVC Inpatient hospital services Outpatient hospital services Physician services Lab/X-ray Nursing facility care FQHC/Rural health clinic services EPSDT services for all children Nurse midwife/nurse practitioner Family planning services Home health care OPTIONAL SVC Prescription Drugs Clinic Services Inpatient psychiatric services for individuals under 21 Other practitioners Collateral Contacts Targeted case management Diagnostic, screening, prevention and rehabilitation: Rehab Option Transportation Dental, eyeglasses, podiatry Designing Medicaid: 3 options: Services, Eligibility & Provider Payments

19. Rehabilitation Option under Medicaid Through State Plan Amendment Major pathway for including IOP, other community based and consumer run services • Services can be screening, diagnostic, prevention, and rehabilitation services: • Instead of “medical necessity”, can be to maintain functioning or prevent conditions • Still provided by or under supervision of licensed staff • Define clearly what services are • Require services must meet specific goals in individual service plan President’s 2007 Budget, stating Medicaid is the payer of last resort, • REGS redefine allowable costs under Rehab Option and DSSH, • REGS will prohibit school administrative charges, transportation costs under IDEA, • LEG change administrative matching rate on targeted CM to 50%

20. Use Other Optional Categories covering MH/SA Providers • Clinic Services: Are diagnostic, therapeutic or rehabilitative svc under direction of MD— Can incorporate MHSA clinics, non-MD therapist • Other Providers: medical or remedial care by licensed practitioners within scope of practice; • Targeted Case management: svcs to assist individuals to get needed tx; may be limited to MH or AIDs/HIV • Collateral Contacts: contacts with family members or other significant others to the person in treatment

21. In 8 States, SA Services in St Plans • States have latitude in how define the services under Optional Categories • States can exercise multiple Options for same service • States have used different Optional Categories to cover the same service • State optional service definition approved in one state may not be approved in another

22. 2006 Deficit Reduction Act (DRA) Harder to qualify: • Citizen documentation requirement • Assets transfer – look back 5 yrs from 3 yrs Greater co-payment under Medicaid • Not pay premium (up to 5% of income) in 60 days, can terminate • If enforceable, providers can turn clients away • Not cost share on prevention to kids, pregnancy svcs, family planning, and proper Emergency Room svc

23. S’Chipping away: Benchmark Plans, primary care benefit, MH (SUD?) 75% actuarial value (with pharm, vision, hearing); but if benchmark does not include MH, state need not include Exempt from participation: pregnant, blind, dual, institutional, foster care, hospice, sp needs children If exempt individual opts for Benchmark plan, state must show informed consent, including benefits comparison Benchmark plans guarantee access to FQHC and RHC Home and community based without waivers – Needs based criteria otherwise need institution- developed by states Independent assess & plan; may self-direct & purchase care Can cap numbers served & waitlist for services Svc: respite care, family support, supported employment Targeted case management: emphasized medical service, excludes for CM in child welfare or foster care; seem chg to preclude IDEA 2006 Deficit Reduction Act (DRA)

24. More DRA & Demonstration Programs • Health Opportunity Accounts: similar to under Medicare, states pre-fund an account that client self directs care, roll over unspent $, retain a portion if leave Medicaid; up to 10 state demos for 5 yrs; requires annual deductible; pymt rate not > 125% Medicaid rate • Home & Com-Based Alternative to Psych Residential Treatment Facilities for Kids: up to 10 states $218 over 5s; Demos on cost-effectiveness ofalternatives to child psych residential care – but must meet all HCBS waiver requirements, i.e. budget neutral • Money Follows the Person Rebalancing for residents of OCF-MR, hospital, nursing home, or IMD; States awarded will receive up to 90% federal match for home and community based services; but maintenance of effort required • Added 3 to 4 Million dollars annually to expand the family information centers under maternal & Child Health BG - 07 25 states, 08 40 states, 09 all states • TANF- increased state requirements of work participation, decrease flexibility

25. Implement FY02 and Planned FY03 Cost Containment Strategies (Kaiser, 5/2003)

26. Covering MH & SA Under Medicaid • Golden Rule: Even if build a beautiful system, State must fund it • CHC/FQHC/RHC, mandated provider, collaborations? • CMS for IMD, SA is Mental Disorder, Joint MH/SA Benefits? • Commercial plans don’t differentiate MH & SA benefits; as SCHIPPing, could follow this pattern? • DRA – flexibility in home and community based options without waivers or cost effective formula; no comparability, easier to target to specific disorders • Self directed care and Health Opportunity accounts: more flexible spending on services? • Medicaid – another “Payer of Least Resort”, but DRA only state options • Can’t ignore Medicaid but must also look elsewhere too