Utah’s Pre-paid, Capitated Behavioral Health Medicaid Plan

1. Utah’s Pre-paid, Capitated Behavioral Health Medicaid Plan NACBHDD Legislative Conference, Washington, D.C. March 4, 2013 Kyle Snow, ED, Northeastern Counseling Center, kyles@nccutah.org Mike Deal, ED, Southwest Behavioral Health, mdeal@sbhcutah.org Pat Fleming, DD, SLCo Div. Behavioral Health Services, pfleming@slco.org

2. Community Mental Health Movement Took Firm Hold Followed by the Expansion of Grant Funding for Community SUD Svc’s and Svc’s For Older Americans State Level Reorganization “Genesis” 1980’s-90 Child Welfare Disability Services Juvenile Justice Services STATE Child Welfare Disability Services Juvenile Justice Services Counties Human Services MH & SUD Services Aging Services Utah began adding optional services to it’s Medicaid plan, including MH Svc’s to the disabled populations…inpatient psychiatric services were covered… Utah’s Capitated MH Plan was born - with almost full coverage across 13 Co MH Authorities by 1996 Overbuild of psychiatric facilities - costs skyrocket Counties given responsibility to manage optional Medicaid Program & inpatient costs 1993 Cost savings to be used to expand MH Svcs (Medicaid & Unfunded/uninsured) 1996 – 2004 Worked exactly as designed, inpatient costs under control, allowed counties to expand while decreasing demand on State funds. It worked too well. 2006 – CMS changes, savings to be used for Medicaid only.

3. Three Common Financing Methods Cost reimbursement model Fee-for-service model Capitated model

4. Capitation Model – What is it? • Under this model, payer or providers, receive a fee for each enrollee to cover a specified level of behavioral health care and offer a defined package of services, for a specified period of time. The enrollees are usually residents of a specific area. Enrollee may be identified from a specific list. Payer or provider assumes risk (all risk, shares risk, limit risk share, etc.), associated with delivering services to enrollees.

5. When to use Capitation Model • When behavioral health expenditures growing faster than available funding. • When acute behavioral costs (inpatient care) growing more rapidly than the outpatient or traditional behavioral health expenditures. • When available funding is being reduced or no growth in funding is being projected within the near future. • When coordination of benefits of patient between different providers is not being done or very limited. • When provider network is providing unnecessary services or keeping patients in higher levels of care longer than needed.

6. How Do You Determine Enrollee Rates • Need to know total units of service provided by service code. • Need to know Medicaid units of service provided by service code. • Need to know cost by service code. • Need to know Medicaid units of service by service code and by rate cell. • Need to know Third Party Liability or insurance collection by Medicaid rate cell. • Need to know the number of eligibles by rate cell or category.

7. How Many Eligible or Rate Cells to Use? State of Utah’s 10 Eligibility Categories AFDC 0 to Age 5 Years AFDC 6 to 18 Years AFDC 19 to 64 Years Aged (65 Years and Older) Disabled Male (All Ages) Disabled Female (All Ages) Pregnant Woman (All Ages) Medically Needy Child (0 to 18 Years) Medically Need Adults (19 to 64 Years) Foster Care State of Utah has over 130 eligibility categories. Each based up a set of criteria submitted to CMS (Centers for Medicare and Medicaid Services). Too many to use!!!!! Utah has chosen to collapse all these into 10 categories.

8. Example of Monthly Payment Capitation • Utah uses a prepaid full capitation prepaid model. Under this model, the govt. agency, MCO, Providers and etc. receives a fixed amount of money for providing services to a patient for a particular period of time, including all the cost associated with behavioral health. (Inpatient hospital, outpatient, supported living, and other services - pharmacy is not included.) Prepayment allows agency a chance to contract for all services, staff for services and etc., without having to acquire large loans, or restrict prior years earning, to cover cost of providing the service.

9. Advantages of Capitation • Strong incentives to minimize financial costs. • Strong incentive to intervene earlier in patient’s treatment rather that waiting until clients admit at inpatient hospital. • Strong incentive to coordinate patient’s care between programs and providers. • Patient is likely to receive only those services and interventions that are necessary. • Limits the chances of exceeding the budget that has been approved. • Encourages the use of new programs that limit the exposure to the more intensive services such as inpatient.

10. Disadvantages of Capitation Agencies, providers, MCOs, and etc., (providers) have an incentive to limit the quantity of services provided to the patient. Patients may potentially receive less than optimal care since both quality and quantity may increase costs. In capitation-based settings, it is not as easy and straightforward for the patient to change her therapist. Providers may limit the days in intensive care to less than optimal before releasing back to the community to reduce cost, thus placing family, the new provider and the patient at greater risk. Agency overseeing capitation contract may incur additional costs for monitoring to ensure appropriate levels and quality of care are provided to the patients.

11. So which of the three methods is the best, cost reimbursement, fee-for-service, or capitation? • At Salt Lake County we use all three methods. Each has as mentioned advantages and disadvantages. • We use the cost reimbursement for new programs and programs looking for a particular usually non traditional service. (24 Crisis line) • We use fee-for-service with our substance abuse providers with a ceiling on the max dollars allowed per year. The monthly amount is limited to allow for services throughout the year. • On our mental health services both inpatient and outpatient we have placed our MCO contractor at full risk with reimbursement based upon the enrollment of eligibles in the 10 categories mentioned. But we added an additional aspect with our MCO any unspent funding will be deposit into an account maintained by our MCO, but belonging to Salt Lake County. These funds have been used to open new programs and cover shortfall in the falling year.