by Alisa B. Busch, M.D.
[Winter 1997; Vol. 24 No. 4]
July 1, 1997, marked the first day of chaos in Maryland’s public mental health system (PMHS) when the state enacted its Medicaid 1115 Waiver Proposal. Literally overnight, the entire system (medical and mental health) underwent enormous changes in service delivery. The waiver, approved by the Health Care Financing Administration (HCFA), allows the state to combine multiple state and federal health care funds and bypass traditional Medicaid regulations. Maryland is not alone in this attempt; nearly every state in the country either has, or is proposing, a Medicaid grant waiver in an attempt to control the skyrocketing costs of Medicaid.
Maryland’s new public health system is a hybrid. Although general medical care (which includes primary mental health and substance abuse treatment) is capitated and served by several managed care organizations, the PMHS is carved out and operates as fee-for-service. The state accepted Maryland Health Partners (a conglomerate of CMG and Green-spring) as the administrative service organization (ASO) for an administrative fee of nearly eleven million dollars over an eighteen month period. The ASO assumes no risk (it neither keeps as profit any money it may save the system, nor loses money if it overspends). However, it is subject to a 10 percent withhold based on quarterly performance criteria (not fiscally driven at present) established by the state Mental Hygiene Administration (MHA). In addition to billing and claims, the ASO gathers utilization and quality improvement data. It will apply MHA’s newly established medical necessity criteria (none existed prior to this), and diversion to less intensive alternatives of care as the foundation for cost control. Although quality improvement was not the impetus for change, it is hoped that the establishment of a system-wide data base can be used to evaluate utilization and begin to assess quality of care. Prior to the waiver, the mental health data system was fragmented and data gathering very difficult. In fact, even meaningful utilization data were nonexistent.
During the development process, MHA planned some protections for traditional outpatient mental health centers (OMHC) and patients: first, the preservation of mental health funds for mental health treatment (the carve-out); second, patients could maintain existing therapeutic relationships as long as the provider chose to participate in the PMHS. Also, after considerable lobbying of the legislature by provider groups, traditional OMHCs could participate in a transition plan to facilitate their transition to the new system. The plan allowed them to maintain 90 percent of their grant funding and collect 90 percent of the new Medical Assistance fee-for-service rate (while forgoing payment on grey zone patients). Also, to promote continuity of care, MHA would be not deny services during the first two months.
That was the theory. However, in practice, the administrative burden of registering all Medicaid and grey zone recipients on one day overwhelmed both providers and the ASO. MHA had not adequately communicated the number of patients enrolled in the system (over 30,000). Providers complained about the waiting time on the phone for authorizations. Treatment plans were not approved in a timely fashion due to the ASO’s administrative burden and provider confusion regarding the proper way to complete them. Accessing Medlink, the intermediary company for claims, was often difficult; merely changing a computer printer could make a provider’s system incompatible. Many providers felt the state’s new expectation of 65 percent productivity in the OMHCs (up from 50 percent) was unattainable in a public mental health system. This concern, coupled with the tremendous increase in administrative burden during transition, was overwhelming to many. The ASO slow disbursement of claims payments made many OMHCs require cash advances from their local mental health authority, the Core Service Agency (CSA). In this newly centralized system, many providers questioned the CSAs’ influence, and CSAs struggled in articulating their new role in locally managing their systems of care. Many felt MHA poorly communicated evolving policy during this period.
Providers, knowing the ASO was not actually managing the system by early fall 1997, worried that spending was out of control and that by mid fiscal year, MHA would need to enforce dangerously stringent cost containment. Equally troubling, the data system was not yet intact, thereby making utilization projections impossible. First quarter fiscal reports from Baltimore City OMHCs, which had opted into the transition plan, indicated they had lost approximately 5 percent of their revenue. If they were not in the transition plan, they would have lost 35 to 50 percent. Some county governments that provided care as OMHCs anticipated they could not be fiscally solvent in a fee-for-service system and closed, transferring patients to other providers. Some providers became concerned they were witnessing the dismantling of the PMHS. By late November, MHA began to increase pressure on MHP to resolve its administrative problems and ease the burden on providers or risk being in default of their contract.
All change is stressful; the new PMHS is no exception. Although several features attempt to protect continuity, any change (let alone overnight change) risks losing patients. It is important to recognize that this is an evolving system which is sensitive to political pressure. If channeled properly, that can be powerful leverage. Critical questions remain, including will the data ever become useful or meaningful; what will be the role of the local mental health authorities in this new centralized system; what will happen to the providers; and most importantly, what will happen to the patients? The ultimate outcome, after the transition dust settles, has yet to be determined.
Alisa Busch, M.D., a senior psychiatry resident at Johns Hopkins Hospital, is studying the changes in mental health care delivery systems around the country. Currently, she is Member-in-Training Trustee on the APA Board of Trustees.