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An ad that appeared in the print edition of Politico this summer urged the feds to consider mental-health patients in designing demo programs for dual-eligibles.

Seeking inclusion

Mental-health groups voice concerns over demos

By Jessica Zigmond
Posted: December 1, 2012 - 12:01 am ET

Worried that state applications for a federal demonstration program for Medicare and Medicaid enrollees are not designed in a way that ensures access and proper care for the mentally ill, some behavioral-health groups have developed a proposal of their own.

So far, the CMS has received applications from 26 states for the agency's Financial Alignment Initiative, a program that will allow the CMS to test two payment models nationwide for up to 2 million dual-eligibles—those enrolled in both Medicare and Medicaid. (A spokeswoman for the CMS confirmed that New Mexico has withdrawn its application, bringing the active applicant pool to 25.)

The purpose of the demo is for the states to integrate acute and long-term-care services for this typically vulnerable and medically complex population, as well as improve the financing between the two federal healthcare programs. By the CMS' count, dual-eligibles total more than 9 million enrollees and account for 27% of Medicare costs and 39% of Medicaid costs—making them a costly population of great interest to state and federal policymakers.

Although the dual-eligible demonstration program is intended to better coordinate care for enrollees, it could end up having the opposite effect for those with mental illness if the demonstrations are not structured properly, says Mark Covall, president and CEO of the National Association of Psychiatric Health Systems.

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“The dual-eligible population is not homogenous,” Covall says, adding that this patient group includes the elderly, developmentally disabled, children with autism and those with severe mental illness. And according to the Medicare Payment Advisory Commission, 56% of all Medicare inpatient psychiatric patients are dually eligible for Medicare and Medicaid. As Covall explains, the current state demonstration proposals are too general in how they're designed, which will make it hard to evaluate what does—and doesn't—work well for the severely mentally ill population.

The best way to determine if a demonstration proposal works for mental-health patients in the dual-eligible population is to isolate the group in its own demo, Covall says. That's why a group of six organizations—the American Foundation for Suicide Prevention, American Psychiatric Association, Mental Health America, National Council for Behavioral Health, National Association of Psychiatric Health Systems, and the National Alliance on Mental Illness—established the Mental Health HOPE Alliance to draft a proposal that focuses on the needs of the mental-health population among the dually eligible.

“We did reach out to a few states initially to gauge their interest, and based on that, we've focused on a particular state and that's the only state we're in active discussion with right now,” Covall says. He did not identify the state because there is no formal agreement yet. In the end, the state would have to submit the coalition's proposal—or amend its current application if it has already submitted one—to the CMS.

While most of the current state applications follow a capitation model, that design sets an arbitrary cap that could lead to health plans having to restrict or limit care, Covall says. That's why the alliance's proposal follows a fee-for-service model. The group's proposal focuses on care coordination in what Covall calls the “after-care programs post-hospital” and includes quality measures to evaluate how various interventions improve access and outcomes.

Andrew Sperling, director of federal legislative advocacy at the National Alliance on Mental Illness, says some of the key elements of the proposal also include establishing a patient-centered medical home and integrating primary-care services in behavioral-health settings.

“What drives the high cost is by and large not their psychiatric care,” Sperling says of the dual-eligibles. “What drives the high cost is the co-morbid medical conditions, such as diabetes, hypertension, COPD, substance abuse, heart disease,” and high use of emergency medical services. “The reason these are poorly managed is dismal access to primary care.” he says.

Meanwhile, those groups are also working to make sure that the CMS considers their concerns as they review the current set of applications and work with states to modify them.

This summer, more than 40 organizations that make up the Mental Health Liaison Group sent a letter to Melanie Bella, director of the CMS' Medicare-Medicaid Coordination Office, that urged Bella and her staff to review the state proposals to ensure they included “critical protections” for dual-eligibles with mental illness. The letter also offered a list of their concerns about the applications. For instance, a majority of the state proposals call for enrolling beneficiaries into a managed-care plan and not giving beneficiaries other plans to choose from.

“On the one hand, the argument is you will have an opportunity for coordination,” says Chip Kahn, president and CEO of the Federation of American Hospitals, which isn't a member of either the Mental Health Liaison Group or the Mental Health HOPE Alliance. “But the negative side ... is whether the coordination is appropriate and doesn't break up the network of providers that the patient and their family put together because they're basically forced into something else.”

Another concern is that mental-health patients could lose certain Medicare benefits. For example, the letter noted that some states propose substituting their state Medicaid formularies for Part D plan formularies. That would mean beneficiaries could lose the Part D protections that require formularies to include “all or substantially all” of the drugs in six protected classes, including antipsychotics, antidepressants and anticonvulsants.

“We fought very, very hard in 2002 and 2003 when Congress drafted the Medicare Modernization Act that these dual-eligibles would go into the Medicare drug benefit,” Sperling says. “There were a couple of states that proposed to shift their coverage for prescription drugs back to the Medicaid drug plans that the states provide. We're pressing CMS to make sure that an integrated care plan covers everything.”

Overall, the CMS has been receptive to the concerns of the mental-health advocacy groups, Sperling says. “They have states that want to move forward,” he says. “And what do states want? Consumer flexibility. And we're saying: We want more accountability.”

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