State Budget Cuts Impact Continuity of Mental Health Care

Continuity of care between the inpatient and outpatient settings continues to be a challenge. Current hospital payments assume that hospitals are actively involved through discharge and the transition to outpatient settings and advocating for payments for outpatient providers to assist in this process is viewed as duplicative. This undermines mental health care providers’ ability to smoothly transition clients between service settings.

Meeting the credentialing requirements for program services and mental health professionals has posed new challenges. Community behavioral health organizations employ professionals that may not meet private insurers’ credentialing standards (for example, 3 years of post-licensure experience). Community providers have addressed this through contractual arrangements in which quality assurance and supervision requirements substitute for these credentialing standards. Services are billed under a supervisory protocol in which the supervising professional’s national provider identifier is used.

Additionally, some programs offer services that rely on a combination of funding sources such as county, state, and private insurers. In these situations, counties sometimes want to limit private insurance clients’ access to these programs because a portion of the overall program is covered by the county.

Impact of State Budget Cuts on Mental Health Care –

In a dramatic turnabout that may foreshadow dilemmas faced by other states, the governor of Minnesota vetoed funding for the state’s mental healthcare program. The legislature would have extended the program for several months, as a compromise was negotiated to retain elements of coverage for the state’s mental health population – a hospital uncompensated care fund, medication/pharmacy, and “coordinated care delivery systems.” In the system, an accountable hospital-centered program paid a fixed amount to cover about 40% of the state’s mental illness population who elected to participate. As there is no reimbursement for outpatient clinic and all non-hospital services, providers and consumers now are scrambling to seek disability determination or enroll in Medicare type coverage after the six month state mental illness coverage enrollment period ends.

While these cuts are only effective as of June 1, 2010, it is expected that they will result in increases to the uncompensated care burden on hospitals and community safety net providers.

How Do We Minimize The Impact of Budget Cuts on Mental Health Care?

Many not-for-profit membership organizations representing community mental health and other service provider agencies throughout Minnesota have been working in coalition with national mental health groups on advocacy related to the state’s mental health program changes. Initially, advocacy efforts were focused on encouraging the state legislature to vote in support of expanding the state Medicaid program early to receive additional federal funding (as provided for in the national healthcare reform bill). Unfortunately, this proved to be politically untenable in the immediate future; however, a measure was passed to allow the governor to use executive authority to expand Medicaid coverage for mental illness patients.

While being actively involved in this advocacy process is vitally important to the community behavioral health system, national mental health advocacy medicaid organizations and their members are also evaluating ways in which they can optimize their business practices to meet this changing budgetary reality. Among other strategies, community behavioral health providers are working to develop partnerships with community hospitals to reduce the number of avoidable emergency department admissions and ease the transition from the inpatient to outpatient settings, supporting clients through the disability determinations process so they may become eligible for Medicaid as quickly as possible, and raising funds that will help to cover the cost sharing requirements for state sponsored mental health care and the enrolled clients that are unable to pay.

Through this two-pronged approach that includes both advocacy and pragmatic business considerations, it is hoped that the community behavioral health system will be able to develop new cost-effective ways of delivering services that will be well-positioned to withstand funding changes while taking advantage of new opportunities made available through national and state health care reform initiatives.