Medicaid Managed Behavioral Health Still in Holding Pattern

Colleen O'Dea | July 30, 2012 | Health Care
No progress expected until feds approve state's comprehensive Medicaid waiver

New Jersey’s plans to move more Medicaid patients, including those receiving behavioral health services, into managed care remain on hold pending federal approval of the state’s proposal.

Initially, officials from the state Department of Human Services had hoped to have put out a request for proposals for a firm to oversee the new medical system that would begin January 1. But the state can’t make any changes without approval of the Centers for Medicare and Medicaid Services.

The RFP for an accountable care organization to manage behavioral health services was to have been issued July 1, but now officials are hoping to be able to issue it before the end of the summer. It cannot go out until after federal officials approve New Jersey’s comprehensive Medicaid waiver. The state proposed the program changes last September and has been working with CMS officials to answer their questions and concerns, with the final negotiations meant to assure them the program won’t cost the federal government, which pays about half the Medicaid bill, any more money.

“The approval process for the waiver is in the final stages now,” said Nicole Brossoie, a DHS spokeswoman. “The timelines will have to be changed, depending on when the waiver is approved.”

Behavioral Health Biggest Change in Medicaid Overhaul

New Jersey’s proposal is a complete overhaul of Medicaid, the healthcare program for those with very low incomes. But the biggest changes would affect behavioral health services and long-term care, since New Jersey already currently uses managed care to provide regular medical care to about 95 percent of those receiving services.

According to the waiver application, New Jersey had about 60,000 adults and 40,000 children receiving Medicaid behavioral health services in 2010.

Currently, behavioral health services for adults in New Jersey are paid as fee for service, unmanaged and uncoordinated.

Mental health advocates are anxiously awaiting the issuance of the RFP to see how state officials have addressed numerous concerns they raised after the announcement of the change to managed care.

DHS conducted an open process last winter and spring, convening a series of meetings with stakeholders. The groups issued an 83-page report last month that included more than 100 recommendations in the areas of access to care, clinic care, outcomes and finances, and a set of overall guiding principles the state should follow.

First and foremost, those include that the accountable care organization be “person-centered, reflecting the strengths, resources, challenges and needs of consumers.” It also urges that the system be easy to use, financially support a large number of providers, and give those with complex behavioral, medical, and social needs, including substance abuse, enough support to navigate the system and address all their needs.

“In the public mental health system, you’d like to think a person could go to any provider and get the service he needs, but if they’re not able to get access to all services, people end up getting the service that does not necessarily meet the need, but the service where there’s an opening,” said Phil Lubitz, associate director of the National Alliance on mental Illness of New Jersey.

Advocates Hope to Go Slow to Avoid ‘Growing Pains’

That’s just one of the fears advocates have. All these concerns have “representatives” like Lubitz and Debra Wentz, chief executive officer of the New Jersey Association of Mental Health and Addiction Agencies Inc., hoping the state chooses to pilot the new program on a small scale first to help work out any problems that are bound to arise.

“The number of people moving into managed care in the same time frame is what concerns people the most,” Wentz said. “There are going to be a lot of growing pains.”

But advocates also stress that there are some positive approaches in the waiver. For instance, they applaud the proposal to provide care in “health homes,” where a team of medical professionals oversee and address all a patient’s needs, both physical and behavioral. In addition to checkups and counseling, the services offered might include advice regarding diet and exercise.

“There are a lot innovative models, like the ACO and behavioral health homes,” Wentz said. “These will not necessarily be negative, but we want to have time to plan.”
New Jersey already has some experience using managed care for behavioral services. Since 2002, PerformCare, a division of AmeriHealth Mercy, has been overseeing behavioral health services to children receiving Medicaid.

Lubitz said it took the state years “to get it right,” but the managed care system for children is working well.

PerformCare is a managed care company that coordinates care but does not assume risk: it gets a predetermined amount regardless to arrange care for patients.

Eventually, according to the waiver, the behavioral health ACO would assume risk and could wind up losing money if the cost of care provided exceeds payments from the state. That could prompt the organization to cut corners or cut services in order to ensure it makes a profit.

This prospect worries advocates.

“The fear is always the way they will do this [ensure profitability] is by withholding care,” Lubitz said. “The other way is by providing more efficient care. Only time will tell. We have asked that there be a lot of oversight to make sure they are going toward a more efficient system.”

But state officials said they will not allow patients to suffer a lack of care. They say the savings will come from ensuring people get regular preventive care, which is less costly that critical or emergency care. They said that the four managed care companies overseeing the regular medical managed care already assume financial risk for that program.

And advocates acknowledge that reform is necessary to stop escalating costs and, hopefully, improve care at the same time.

“There is a need to move forward with a more uniform service delivery system with more managed care,” said Lubitz.

Overall, according to state officials, the waiver is intended to make improvements in the program, ranging from helping the elderly avoid nursing homes to reducing excess use of hospital emergency rooms, while saving the state money. Last year, according to DHS, Medicaid cost New Jersey taxpayers about $5 billion.

That portion of the plan that proposes shifting the oversight of nursing home and assisted living patients to managed care would affect about 30,000 elderly or disabled New Jerseyans on Medicaid. A main goal is to spend a greater portion of Medicaid dollars to allow residents to stay in their homes, rather than have to live in a nursing home or other facility. Changes were to have been put in place July 1, but they are also on hold pending the outcome of waiver discussions.