Medicaid Rule Could Jeopardize Access to MH Care, APA Warns

On August 16, Health and Human Services (HHS) Secretary Tommy G. Thompson proposed a new rule for Medicaid beneficiaries in managed care plans. He touted its anticipated effect, saying in a press release, “This proposed rule provides needed patient protections and gives states flexibility to implement these protections without jeopardizing Medicaid beneficiaries’ access to health care” (Psychiatric News, October 5).

The proposed rule would extend to Medicaid patients the same rights as are included in the patients’ rights legislation now before Congress. That bill covers patients in employer-sponsored health plans.

Although the proposed rule does contain new protections for some Medicaid beneficiaries, it also has disturbing implications for beneficiaries who have mental illness, including substance abuse disorders.

Medicaid is the largest source of public funds for mental health services. And, according to Jeffrey Buck, associate director for organization and financing at the federal Center for Mental Health Services, “As of 1997, the most recent year for which we have good data, Medicaid was almost as important a source of funds for mental health and substance abuse treatment as was private insurance. Medicaid funds accounted for 20.3 percent of the total dollars spent on mental health and substance abuse, and private insurance accounted for 23.8 percent. The remainder came from other state and federal programs and out-of-pocket funds.”

Steven Mirin, M.D., APA’s medical director, said, “At the invitation of the Centers for Medicare and Medicaid Services [CMS] we submitted formal comments about the impact of the proposed rule on the patients we serve and those who remain unserved. I noted our concern that people with mental illness must have access to medically necessary psychiatric services provided in a variety of appropriate settings, within or through Medicaid managed care plans.”

In his October 15 letter to CMS (which was previously called the Health Care Financing Administration), Mirin also described a series of specific Medicaid problems including the following:

• A rule proposed by the Clinton administration in 1998 stipulated that enrollees with “serious and multiple medical conditions” would have specific protections. State agencies would be required to assure that managed care companies have procedures in place to identify these individuals, assess their condition, identify appropriate medical procedures with monitoring, and develop a treatment plan. These procedures were to include direct access to specialists as required by the treatment plan and updated by the physician responsible. Treatment of depression by an “appropriate specialist” is an example given of covered service. The 2001 proposed rule does not contain comparable language or commentary.

The 1998 rule was finalized in January 2001, just before the Bush administration took office. The Bush administration, however, delayed its effective date twice this year to gain time to review the rule and make changes.

• Managed care plans have too often limited psychiatrists to providing only initial diagnostic evaluations and medication management. No protections against such contractual limitations are offered in the 2001 proposed rule.

• Sections on “provider discrimination,” “availability of services,” and “adequate capacity and services” should be revised to ensure that managed care companies offer a full range of psychiatric services and have a sufficient number of psychiatrists participating in their plans.

• The wording “Coordination and continuity of care” should be revised to ensure that CMS monitors state agencies and managed care companies to identify disruptions in treatment of patients with a mental illness and helps state agencies find solutions should such disruptions be imminent. CMS should describe appropriate coordination efforts and use its resources to ensure continuity and coordination of treatment.

• The proposed rule’s section on the use of practice guidelines should be revised to ensure consultation with medical societies, such as APA, that have already developed guidelines.

The history of the proposed rule dates back to the Balanced Budget Act of 1997 (BBA). In an analysis for the Kaiser Commission on Medicaid and the Uninsured, Jeffrey S. Crowley, project director of the Institute for Health Care Research and Policy at Georgetown University, wrote, “Major goals of the BBA were to achieve cost savings by creating new efficiencies in the Medicaid program and to give states new flexibility in mandating that Medicaid beneficiaries enroll in managed care. Congress also balanced these actions with substantial new consumer protections for beneficiaries enrolled in managed care companies.”

In the lobbying that took place before the legislation passed, advocates for Medicaid beneficiaries called for the exemption of adults with special health care needs from mandatory enrollment in managed care plans. When Congress declined to broaden the exemption, leaders in both parties tried to find ways of protecting those beneficiaries most vulnerable to receiving inadequate or poor-quality care in managed care programs.

Congress instructed then-HHS Secretary Donna Shalala to conduct a study concerning safeguards necessary to ensure that the health care needs of individuals with special health care needs and chronic conditions who are enrolled in Medicaid managed care organizations would be adequately met by the legislation.

That study, published in November 2000, “Report to Congress: Safeguards for Individuals With Special Health Care Needs Enrolled in Medicaid Managed Care,” included “individuals with serious and persistent mental illness/substance abuse” as one of six groups with “special health care needs and chronic conditions.” The report made 24 recommendations that covered issues for those groups such as access to experienced clinicians, quality monitoring, payment incentives, and coordinated and continuous care.

Many of those recommendations were incorporated in the rule developed by the Clinton administration and issued in January of 2000 as a final rule. The CMS, under the newly elected Bush administration, delayed implementation of that rule and proposed significant changes, which were presented by Thompson in August. Crowley noted, “Most of the provisions of the January 2001 final rule that would implement these recommendations have been eliminated from the August 2001 proposed rule.”

In defense of the changes, Thompson said, “[The] previously issued rule went far beyond what Congress intended with the Balanced Budget Act, and its excessive mandates actually threatened beneficiaries’ access to care under Medicaid. The new proposed rule will ensure that states have the flexibility they need to protect patients while protecting the programs they may already have established.”

The 60-day comment period ended October 19. CMS will review comments submitted before issuing a final rule, due next year. ▪