Medicaid plans struggle to provide mental health services

At the start of 2014, California's Medicaid program took over management of mental health services from the state's 58 counties. For Inland Empire Health Plan, a Medi-Cal managed-care plan, that meant going from being responsible for behavioral health benefits for 12,000 beneficiaries dually eligible for Medicare and Medicaid to more than a million enrollees.

“Overnight we became responsible for all outpatient mental health services for our entire patient population,” said Peter Currie, a psychologist and clinical director of behavioral health at the plan, based in Rancho Cucamonga.

The plan immediately faced the same hurdle Medicaid managed-care plans are confronting nationwide: how to attract behavioral health providers to programs that pay notoriously low rates. It's especially problematic in California, where Medi-Cal ranks 48th among the states in paying Medicaid providers, according to the Kaiser Family Foundation.

As many as 32 million individuals will gain access to behavioral health coverage for the first time by 2020 thanks to Medicaid expansion under the Affordable Care Act, according to HHS. “It's going to be harder for plans to manage the influx of patients needing mental health services because, like primary-care providers, there's a shortage,” said Heidi Arndt, senior vice president of Medicaid at Gorman Health Group, a consulting firm.

The ACA did two things to expand access to mental health services. It deemed it an essential health benefit that private health plans and Medicaid plans had to offer. And it indicated there had to be parity, meaning enrollees would have the same access to mental health services that they had to physical health services.

A recent Kaiser Family Foundation study found that Medicaid coverage of behavioral health services is generally more comprehensive than private health plans sold on the new government-run exchanges (See list at right). It's a set of services this population really needs. In 2011, the last year for which federal data are available, almost half of non-dually eligible adults under age 65 eligible for Medicaid on the basis of disability had a behavioral health diagnosis, according to a June 2015 Medicaid and CHIP Payment and Access Commission report to Congress. That population accounted for two-thirds of total Medicaid spending.

One out of every 10 persons in this group had a schizophrenic disorder, the highest prevalence of any age and eligibility group in the commission's analysis. Eighteen percent had a diagnosis of an episodic mood disorder, including bipolar disorder and major depressive disorders; and 14% had a diagnosis associated with an anxiety disorder.

Despite the changes outlined in the Affordable Care Act meant to ensure access to mental health services, it's been a struggle to make sure that happens. Plans, states and other stakeholders must work together to come up with ways to ensure access to care. Not doing so will mean continued financial woes for states.

“Limited access to mental health services can result in substantial hidden costs elsewhere—including costs to families, the criminal justice system and society more broadly,” said Dana Goldman, professor of public policy, pharmacy, and economics at the University of Southern California.

Even before expansion, Medicaid was already America's largest payer for behavioral health services. Medicaid spending on behavioral health treatment soared from $6.6 billion in 1986 to $35.7 billion in 2005, according to the Substance Abuse and Mental Health Services Administration. Along with the greater spending, Medicaid's share of funding for such services has risen—from 16% to 26% of all behavioral health spending.

To bring costs down, states increasingly use managed-care companies to oversee an enrollee's physical and mental health needs instead of having a behavioral health organization provide fee-for-service benefits. In 2011, as many as half the states still carved out some or all of their behavioral health benefits. But in recent years states including Arizona, California and New York have moved to have all benefits provided by one entity.

“Lack of coordination of care leads to sicker patients and higher cost,” said Emily Feinstein, director of health law and policy at CASAColumbia, a substance abuse and addiction research organization. She gave the analogy of alcoholic enrollees who keep injuring themselves when drunk and going to the ER. Patching up their injuries without addressing the patients' substance abuse means those beneficiaries will continue to rack up costs for the state.

To ensure access to behavioral health services, plans nationwide are using a variety of tactics, including paying providers more than the standard rates offered under fee-for-service. Some are making special payments to practices or chipping in funds for fellowships to attract behavioral health providers. Others are relying on nonclinicians such as peer counselors—people who have struggled with the same mental health issues as beneficiaries.

Inland Empire is using savings it achieves to pay providers higher Medicare rates. “I have to create a network while meeting demands for adequate reimbursement,” said Dr. Bradley Gilbert, CEO of the Inland Empire Health Plan, which has added about 300 mental health providers to its network in the past 18 months.In Pennsylvania, Medicaid behavioral health plans like Community Care Behavioral Health Organization are helping fund initiatives such as the University of Pennsylvania fellowship in public psychiatry. The fellowship is designed as subspecialty training for psychiatrists who plan leadership careers in the public sector. Participants are more likely to continue working with Medicaid beneficiaries once they finish their fellowship and have experienced the needs of that population, said Dr. James Schuster, chief medical officer for the plan.

Other plans say that the key to attracting providers is their ability to provide a total picture of their beneficiaries, which managed-care plans can because they also cover primary care. “They want the tools to appropriately engage the members,” said Jonas Thom, vice president of behavioral health at Ohio-based CareSource, which covers more than 1 million Medicaid beneficiaries.

The top roadblock to recruiting providers remains Medicaid's low rates, although many also complain about restrictive rules imposed by state agencies. “We work primarily with a population that has the resources to seek private treatment for their mental health,” said Douglas Bodin, CEO of a Los Altos, Calif.-based therapeutic consulting firm. “The public sector is riddled with waste, fraud and bureaucratic inertia that render appropriate interventions specifically tailored to each individual nearly impossible.”

Low-income patients often take longer to treat because they have other issues that must be addressed, including poor housing, transportation and nutrition. It often falls to mental health professionals to deal with these issues.

For mental health providers who have decided to treat Medicaid beneficiaries, the decision can be rewarding. In the small city of Chehalis, Wash., about 45 minutes south of Olympia, hopelessness tied to unemployment is high, said Tre Normoyle, behavioral health director at Valley View Health Center. “I see what I call chronic despair, where nothing is going right, and they don't see a way out of their circumstances,” Normoyle said. “Seeing people get mental health treatment, and finding mental illness that was previously undiagnosed and see them finally start to feel better is pretty meaningful.”

A number of states still have administrative roadblocks that block access to mental health services for Medicaid beneficiaries. The American Psychological Association is working with several states whose rules prevent Medicaid reimbursement for psychologists and other mental health providers in private practice settings. The trade group is unclear about the limitations' origins, but surmise they were meant to save money.

“There are providers that want to participate,” said Shirley Ann Higuchi, the APA's associate executive director of legal and regulatory affairs.

Many mental health practices are willing to take on interns or postdoctoral fellows to serve Medicaid beneficiaries, but many states decline to reimburse them. That means financing internships is difficult, making it harder to recruit and train the next generation of psychologists willing to work with low-income populations, said Stacey Larson, director, legal and regulatory affairs at the APA.

Some plans use community-based peer counseling as an alternative to specialty practices. A licensed professional such as a psychiatrist may consult on a case or see the beneficiary a few times a year while the plan lines up a person with personal experience of a specific behavioral condition to be a peer counselor on a regular basis.

“There's a friendship bond that forms, where there's a feeling that they've been in your shoes and know what you're going through,” said Tom Lutzow, CEO of iCare, a Milwaukee-based health plan co-owned by Humana. “There's a real trust there.”

Besides reducing ER visits for beneficiaries, peer counselors are also much less costly than a psychiatrist. A peer counselor may earn $22 an hour, much less than a psychiatrist, Lutzow said.

In the long run, however, the key to guaranteeing access to mental health services is providing higher reimbursement for the entire package of Medicaid services, which will require the states and the federal government to spend more to ensure access, providers and plan officials say.

“The reality is that provider reimbursement rates are a function of what state governments budget for Medicaid,” said Pamela Greenberg, CEO of the Association for Behavioral Health and Wellness, a trade group for behavioral health and wellness companies.