OVERVIEW OF PRESENTATION

SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA

STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

OVERVIEW OF PRESENTATION

• Background

• The issue

• Growth in Medicaid spending on children’s community mental health rehabilitation services

• The problem(s)

• The solution(s)

• Multi-year, multi-pronged strategies enacted to restrain the growth of spending

• The results

• Lessons learned

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BACKGROUND• Three state agencies – Department of Medical

Assistance Services, Department of Behavioral Health and Developmental Services, and Comprehensive Services Act (CSA) – fund children’s mental health services.

• Non-traditional, community mental health services are “carved-out” of Medicaid managed care.

• Forty community services boards (CSBs) and private providers provide optional mental health rehabilitative services under Medicaid State Rehab Option.

• CSA pays for services to at-risk children, youth, and their families.

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THE ISSUE: 735% GROWTH IN MEDICAID—FUNDED OUTPATIENT MENTAL HEALTH SERVICES

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THE ISSUE• Over a ten-year period, Medicaid spending for

non-traditional, community mental health services in Virginia grew substantially.

• FY 2000 expenditures - $3.6 million• FY 2010 expenditures - $466.4 million

• In four years, expenditures for three Medicaid-funded services for children – intensive in-home and therapeutic day treatment services, and mental health supports – increased from $86 to $335 million.

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THE ISSUE• Intensive in-home services grew by 250 percent

from FY 2006 to FY 2010.

• Two to six month family preservation interventions for children and adolescents with or at risk of serious emotional disturbance, including individuals with intellectual disabilities.

• Therapeutic day treatment has grown by 418 percent since FY 2006.

• Services for children and adolescents.• Combines education and mental health treatment.• Evaluation; medication education and

management; daily living skills; and individual, group, and family counseling.

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THE PROBLEM• Inadequate oversight of program.

• CMS ruling in 2005 led to influx of private providers of community-based services.

• Regulation and oversight of services built around CSB delivery model.

• Agencies unprepared for additional workload.• Licensing staff overwhelmed by expansion of other

community-based service initiatives.• Prior-year administrative budget reductions never

restored.• Strong utilization management and provider

qualifications controls lacking.• Questionable marketing practices by private

providers.• No independent assessment of children prior to

services being provided.

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THE PROBLEM• Impact of sister agency initiative overlooked.

• CSA initiative designed to transition children and adolescents from residential to community care.

• Demand for community-based care increased.• Costs shifted from CSA to Medicaid.

• Other concerns.

• Children unwittingly being labeled with serious mental health disorders by accepting service.

• Unclear if appropriate services being provided.• Limited resources being diverted from other mental

health service needs.

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THE SOLUTIONSHORT-TERM -- BLUNT INSTRUMENTS

• Rates reduced for therapeutic behavioral services*

• Reduced rates for certain therapeutic group home and day treatment services between 3 and 5 percent

• Rates reduced for intensive community treatment from $70 to $60 per hour

• Rates reduced for psychiatric residential treatment facilities*

• Reduced operating rates by 3 to 4 percent• Eliminated annual inflation adjustment

* Partially restored reductions with FY 2011 FMAP extension.

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THE SOLUTIONLONG-TERM -- SHARPER TOOLS

• Prior authorization: Implemented restrictive requirements on services.

• Provider Qualifications : Enhanced provider and staff qualifications.

• Audits: Increased monthly audits, including compliance audits related to staff qualifications, treatment plans, and training as well as expenditures.

• Marketing Rules: Implemented rules on marketing services similar to rules that apply to managed care organizations.

• Independent Assessments: Examined changes to de-link clinical assessment from direct service provider.

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LONG-TERM SOLUTIONINDEPENDENT CLINICAL ASSESSMENTS

• Effective July 2011, the Commonwealth implemented the Virginia Independent Clinical Assessment Project (VICAP).

• Under VICAP, children will be required to have an independent clinical assessment prior to the provision of children’s mental health rehabilitation services.

• VICAP can recommend any mental health service based on the level of need; prior authorization still required.

• Until now, providers have found and screened children for services.

• Preliminary reports suggest the volume of services is down.

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LESSONS LEARNED• Keep your eyes on the ball

• Use data mining techniques to evaluate trend increases

• Provide adequate staffing to ensure proper oversight/ make sure need is documented and communicated

• Stay apprised of sister agency initiatives

• Adopt advocacy groups as allies

• Better coordinate behavioral health services

• Take advantage of tight budget times to make difficult changes

• Develop good working relationship with budget staff

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Contact Information

Joe Flores, Legislative Fiscal Analyst

Senate Finance Committee

804.698.7483

[email protected]

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APPENDIX IIntensive in-home services

• Time-limited, usually between two and six months, family preservation interventions for children and adolescents with or at risk of serious emotional disturbance, including individuals with intellectual disabilities

• Crisis treatment; individual and family counseling; life, parenting, and communication skills; case management activities and coordination with other required services; and 24-hour emergency response

Therapeutic day treatment services for children and adolescents

• Combines education and mental health treatment• Evaluation; medication education and management; daily

living skills; and individual, group, and family counseling

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