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Bureaucracy, Regulations Stand in Way of Integrated Healthcare in New Jersey

Patients stand to benefit from integrated physical and behavioral care, but ingrained practices and outdated restrictions must be stripped away

nervous system

In the past few years, there’s been a growing body of research to prove that integrating behavioral and physical care will lead to healthier patients -- and lower treatment costs over time.

But for the most part, that doesn’t happen in New Jersey, and a recent report pointed to state bureaucracy and regulation as the primary culprit. The findings, from the Seton Hall Center for Health and Pharmaceutical Law and Policy, suggest that. despite the good intentions of regulators and new efforts to reform the outdated system, old practices and restrictions remain a high hurdle for both mental-health and primary-care providers who want to shift to more integrated treatment.

In interviewing dozens of state officials, providers and other stakeholders, Professor John Jacobi and his colleagues found numerous mental- and physical-health providers who wanted to expand the scope of their services but felt stymied by confusing regulations and inconsistent guidance from the departments involved. These rules also left doctors struggling to get reimbursed for some services they provided through Medicaid, the federal insurance program for poor and disabled residents, which is administered by the state.

The report, funded by the Nicholson Foundation as an outgrowth of work it was doing to integrate care in Trenton and Lakewood, includes eight recommendations to streamline and improve the regulatory system. These include a single comprehensive license for healthcare providers that offer both mental and physical care, an end to rules that encourage facilities to maintain separate spaces or processes for the two types of treatment, more funding for Medicaid reimbursements, and reforms to the complex coding system that researches said now hinders the repayment process.

Joan Randell, Nicholson’s COO, said the foundation decided to fund the study when its pilot projects ran up against recurring regulatory roadblocks and problems securing reimbursement. The report sought not just to understand the law and regulations but to learn how these requirements actually worked.

Gov. Chris Christie’s office lauded the report, which spokesman Brian Murray said validated the governor’s focus on -- and recent investments in -- behavioral care. The report notes that there are numerous challenges to reform, including federal approval in some cases, Murray said, but the need is clear: As Christie noted in his January State of the State address, the vast majority of Medicaid patients with the most costly physical ailments also have underlying mental health or substance abuse issues that often don’t get treated.

“This administration looks forward to examining the report in detail and exploring the optimal system for meeting both the physical and behavioral healthcare needs of our residents,” Murray said, thanking Seton Hall and Nicholson for their work.

The authors praised one recent state reform in particular -- the so-called Shared Space Waiver – issued by the state Department of Health as their report went to print. The guidance ends many of the most onerous restrictions on certain medical clinics that want to add behavioral treatments to their offerings, but Jacobi and others, including Carolyn Beauchamp, head of the Mental Health Association of New Jersey, noted it does not cover all facilities or work in reverse to allow mental health providers the same flexibility to include primary-care services onsite.

The department divide

Generally speaking, hospitals, primary-care clinics, and other medical facilities are licensed by the health department. Behavioral-health providers -- who treat mental illnesses or substance abuse -- are regulated by the department of Human Services. The requirements are further complicated by the specific type of services provided, whether it is inpatient or outpatient treatment and if the specific facility is physically attached to a larger hospital or not.

The system is designed to allow for flexibility, and the state has granted a number of waivers to specific facilities to encourage more integrated care, before issuing the recent Shared Services Waiver. But Jacobi and his team still found significant confusion among providers and state officials, and major differences over how these regulations are applied.

The health department deferred a response on the report to the governor’s office; a representative of human services said staff there had not yet hand a chance to review the 109-page report, but noted that DHS is now working on a plan to raise Medicaid reimbursement rates. Jacobi and Randell both praised the two departments for their involvement in the research process and willingness to consider reform. “This report should not be taken as a criticism of unwilling government regulators,” Jacobi wrote, adding that New Jersey was not alone in dealing with these complexities

Jacobi said this split regulatory dynamic creates almost mirror-image problems for two separate groups of patients, both poor and suffering from complex, multidimensional conditions. People with serious mental illness tend to receive care from mental health clinics -- primarily state-funded nonprofit operations -- that aren’t usually equipped to treat their physical conditions, like diabetes or hypertension. Those with more physical concerns generally go to medical clinics, like the 23 Federally Qualified Health Centers with sites around the state that can treat acute and chronic conditions, but have few behavioral-health options.

As a result, patients who receive care primarily for their physical health may go years before they are diagnosed and treated for anger issues or depression. Patients who are mostly visit mental-health caregivers may receive long-term care for their bipolar disorder, for example, but studies show they die on average 25 years earlier than the general population and often as a result of chronic, untreated medical conditions like cardiac or respiratory disease. In both cases, the cost of treatment would likely be reduced if patients received coordinated, integrated care, according to the Seton Hall report.

Experts agree that the current, bifurcated system is a relic of an earlier era when the main goal was to protect the privacy of behavioral health patients by separating their treatment from traditional medical facilities. The divide has been maintained by the separate regulatory systems, where experts in different licensing processes were not encouraged to overlap.

“You’ve got two competing departments … and there have been ongoing concerns about why it has to be this way,” said Beauchamp, with MHANJ, a longtime advocate for more integrated care. “The system has to move and it has to change.”

The bureaucratic system and paper regulations are only part of the problem, Jacobi noted. Interviews with providers suggested that the rules are interpreted differently at times and individuals in the same department have sometimes provided contrary advice.

In some instances, guidance doesn’t appear to have a legal basis; one example is the so-called “eight-hour rule” which providers and regulators seem to agree allows mental health facilities to provide up to eight hours a week in outpatient primary care. But researchers couldn’t find this rule in any law, regulation or written guidance issued by either department.

“We were struck by how much misinformation was out there,” Jacobi said.

In addition to calling for a single state-license process for an integrated facility, the report recommends the state eliminate any regulations that encourage separate operations and FQHCs should be permitted outright to offer behavioral-health services without seeking specific state approval. It called for additional funding for Medicaid reimbursements -- something Christie has identified for an extra $100 million in next year’s budget -- and ensure payment codes are comprehensive. In addition, both departments need to do a better job of educating providers about these complex rules and requirements.

“The mechanics of it are not difficult. It’s really having the will and making some tough decisions,” Jacobi said. “We just want to remove the barriers so the doctors can get down to it.”

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