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State Watch
Psychiatric News
Volume 38 Number 15 page 18-19
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No one wants to think about where to cut state budgets. For months, however, members of the Massachusetts Psychiatric Society (MPS) helped state officials consider how to curtail Medicaid prescription drug costs with minimal pain and disruption to patients and psychiatrists.

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James Ellison, M.D., received the Clinical Excellence Distinguished Service Award on behalf of the Massachusetts Psychiatric Society.

On June 24, Kenneth Duckworth, M.D., acting state commissioner of mental health, presented MPS President James Ellison, M.D., M.P.H., with the Clinical Excellence Distinguished Service Award for the society’s advisory work in the development of the Massachusetts Health Drug List, a preferred drug list using principles for drug formularies developed by MPS.

Ellison was one of four MPS representatives on the state’s Psychopharmacology Work Group, which developed a program to educate physicians about costly prescribing habits that are not evidence based. As a result of the program, the number of patients taking five or more psychotropic medications went from 559 in January 2002 to 25 in January 2003. The cost went from $305,000 a month for the first group to $20,000 a month for the second (Psychiatric News, May 16).

In related news, MPS’s immediate past president, Elizabeth Childs, M.D., has been appointed state commissioner of mental health. Childs was director and chief of psychiatry at Carney Hospital in Dorchester.

Immediate APA past president Paul Appelbaum, M.D., who is from Massachusetts, told Psychiatric News, "This is the first time in more than two decades that Massachusetts has had a psychiatrist as commissioner of mental health. Dr. Childs’s appointment is a wonderful and welcome example of psychiatrists moving back into positions of responsibility in the public sector. I’m sure she will do a great job."

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The government’s General Accounting Office (GAO) found that the Centers for Medicare and Medicaid Services (CMS) is not "fully complying with statutory and regulatory requirements when it renews [Medicaid] waivers."

Medicaid home and community-based services (HCBS) waivers are the primary means by which states provide noninstitutional long-term care. CMS has the right of approval for waivers and the legal obligation to monitor their impact through regional offices of the Department of Health and Human Services (HHS).

HCBS waivers can enable states to receive funding for transportation, nursing and personal-care services, respite care, and training of caregivers for the Medicaid population who is eligible for institutional care.

From 1991 through 2001, the HCBS waivers grew from 5 percent to 19 percent of Medicaid expenditures, representing $1.6 billion to $14.4 billion. From 1992 to 1999, the number of beneficiaries covered by waivers nearly tripled.

More than 70 percent of the waivers that the GAO reviewed documented one or more quality-of-care problems. The most common problems were "failure to provide necessary services, weaknesses in plans of care, and inadequate case management."

The HHS regional office in Dallas, for example, found that in Oklahoma 27 percent (4,303 beneficiaries) received none of their authorized personal-care services, and 49 percent received only half of their authorized services.

As of June 2002, almost one-fifth of the waivers in place for three years or more had either never been reviewed or were renewed without a review. For an additional 16 percent of the waivers, reports were never finalized.

States’ waiver applications and annual reports for waivers often contained little or no information on state mechanisms for assuring quality in waivers, thus limiting information available to CMS when considering renewals.

In a written response to the report, CMS administrator Thomas Scully said that states are responsible for "quality assurance."

Sen. Charles Grassley (R-Iowa), one of two senators to request the GAO report, said, "These waivers should be put on hold until the department gets a handle on the quality of care going to older and disabled Americans."

In a letter to HHS Secretary Tommy Thompson, Grassley and Sen. John Breaux (D-La.) asked the Bush administration to submit a corrective plan by July 28.

Selby Jacobs, M.D., a member of the APA Committee on Public Financing of Psychiatric Care and a professor of psychiatry at Yale University, told Psychiatric News, "As the Bush administration attempts to shift greater control and management of Medicaid from the federal government to the states, we ought to fear not only for the quality, but also the adequacy of services. The GAO report contains alarming information that suggests what might happen if federal oversight over Medicaid continues to diminish. In my opinion, leaving the standards for quality and adequacy to be worked out on a state-by-state basis—usually by behavioral managed care organizations that have contracted with the state Medicaid agency—would be a mistake. The federal government should not shirk its responsibility to set expectations for quality and adequacy that build greater accountability into the waiver process."

"Long-Term Care: Federal Oversight of Growing Medicaid Home and Community-Based Waivers Should Be Strengthened" (GAO-03-576) is available on the Web at www.gao.gov.

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Gov. Ted Kulongoski (D) and state legislative leaders sent a letter to President Bush committing the state to legislation that would overhaul the Oregon Health Plan (OHP) by rationing health care based on a resident’s income and medical need.

The state legislature is prioritizing populations of OHP enrollees based on income and ranking medical benefits within each income group. At the top of the benefit list is mental health care, along with prescription drugs, laboratory and X-ray work, and doctor visits, according to www.kaisernetwork.org on June 13.

The OHP gained national attention as an early effort to expand Medicaid coverage to more low-income people by prioritizing and limiting medical services (Psychiatric News, April 19 and October 18, 1991).

John McCulley, Oregon Psychiatric Society executive secretary, said that the state legislature’s Joint Ways and Means Committee is considering appropriations for the legislation. "We’re pleased that mental health has been regarded as a high priority. Mental health advocates were also able to keep psychotropic medications out of the group of medications that is to be subject to capitation."

As of July 1, Kulongoski had signed a stop-gap budget bill that would stave off for one month new cuts in health benefits. Cuts are still in effect for coverage of outpatient mental health care for 100,000 OHP members who lost those benefits on March 1 (Psychiatric News, April 4).

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States had good news in the legislation (HR 2) that authorized a $350 billion package of tax cuts.

The law, signed by Bush on May 28, included $10 billion to increase the federal matching rate for Medicaid by 2.95 percent until October 24, 2004, and $10 billion in direct aid to state governments.

State officials, however, are finding that the impact of the short-term increased support from the federal government could be tempered by the loss of state tax revenue.

State and federal tax laws frequently are "coupled" so that cuts at the federal level trigger cuts at the state level.

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The Small Business Health Fairness Act (HR 660) passed the House of Representatives in late June by a vote of 262-162 and has been referred to the Senate Committee on Health, Education, Labor, and Pensions.

The bill, which addresses the problem of the growing number of Americans without health insurance, would allow businesses in the same trade groups to form association health plans (AHPs).

Those plans would be exempt, however, from state laws that mandate parity and provide consumer protections.

In fact, in September 2002 the Department of Labor released a report that praised AHPs because "by operating under federal law, [they] can avoid the cost of state benefit mandates" (Psychiatric News, May 2).

In January APA joined other members of the Mental Health Liaison Group in a letter to Rep. Dennis Hastert (R-Ill.), speaker of the House, and Sen. William Frist (R-Tenn.), Senate majority leader and a physician, opposing legislation that "would exempt association health plans from state regulation and thereby undermine state mental health parity laws and other critical consumer protections." ▪

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James Ellison, M.D., received the Clinical Excellence Distinguished Service Award on behalf of the Massachusetts Psychiatric Society.

On June 24, Kenneth Duckworth, M.D., acting state commissioner of mental health, presented MPS President James Ellison, M.D., M.P.H., with the Clinical Excellence Distinguished Service Award for the society’s advisory work in the development of the Massachusetts Health Drug List, a preferred drug list using principles for drug formularies developed by MPS.

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