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SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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Page 1: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA

STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

Page 2: 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

Flores - Virginia Senate Finance Committee - NASHP2

Page 3: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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.

Flores - Virginia Senate Finance Committee - NASHP 3

Page 4: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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

Flores - Virginia Senate Finance Committee - NASHP 4

Page 5: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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.

Flores - Virginia Senate Finance Committee - NASHP 5

Page 6: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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.

Flores - Virginia Senate Finance Committee - NASHP 6

Page 7: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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.

Flores - Virginia Senate Finance Committee - NASHP 7

Page 8: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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.

Flores - Virginia Senate Finance Committee - NASHP 8

Page 9: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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.

Flores - Virginia Senate Finance Committee - NASHP 9

Page 10: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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.

Flores - Virginia Senate Finance Committee - NASHP 1

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Page 11: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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.

Flores - Virginia Senate Finance Committee - NASHP 1

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Page 12: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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

Flores - Virginia Senate Finance Committee - NASHP12

Page 13: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

Contact Information

Joe Flores, Legislative Fiscal Analyst

Senate Finance Committee

804.698.7483

[email protected]

Flores - Virginia Senate Finance Committee - NASHP 1

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Page 14: SLOWING THE GROWTH OF MEDICAID SPENDING IN VIRGINIA STRATEGIES DESIGNED TO CONTROL CHILDREN’S MENTAL HEALTH SERVICES EXPENDITURES

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

Flores - Virginia Senate Finance Committee - NASHP 1

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