551Valley Road, PMB# 173, Upper Montclair, New Jersey 07043
Web: www.njpra.org
Voicemail: (732) 646-5772 Fax: (973) 450-1189 E-mail: info@njpra.org
Testimony – FY 2015 State Assembly Budget Public Hearing
March 24, 2015
Thank you for the opportunity to provide testimony on behalf of the New Jersey Psychiatric
Rehabilitation Association (NJPRA) regarding the fiscal year 2016 budget. NJPRA is an
association of rehabilitation and recovery-oriented mental health providers who work
primarily with adults who have serious mental illnesses. They serve the over 250,000 New
Jerseyans with schizophrenia, bipolar disorder, and clinical depression. New Jersey is a
leading locale of PsyR knowledge and practice. Our members work in community
agencies, residences, and private practices. Our members provide a full range of
comprehensive community based support services which strengthen New Jersey’s system
of care by promoting recovery, facilitating discharges from institutional settings, fulfilling
the Olmstead mandate, preventing unnecessary long term care, and coordinating with our
system partners to meet the goals of New Jersey Division of Mental Health and Addiction
Services (DMHAS).
At the present time New Jersey is transitioning its public mental health and addictions
system to “managed care”. The Department of Human Services (DHS) recently announced
that it has designated Rutgers University of Behavioral Healthcare as the Administrative
Service Organization (ASO) to function as a gatekeeper to manage and provide
authorization for addiction services, including relevant Medicaid payments, throughout
the state effective July 2015. DMHAS has stated that this ASO will be functioning on an
interim basis as a pilot project for approximately 18 months. At some point during this
process DMHAS will incorporate mental health services into this managed care system.
Monthly provider-based contract payments will be changed to incident-based fee-forservice payments. Following this time period DMHAS may seek to recruit a private
managed behavioral health care organization (MBHO) through a public procurement
process to manage nearly all aspects of all New Jersey’s mental health and addiction
services.
A critical part of this transition to a managed fee for service system is setting new
Medicaid rates, a process DHS and its contracted accounting firm has been engaged in for
the past year or so. By this process the State will be redefining eligible services and resetting rates for all Medicaid-funded public mental health services. How DHS concludes
these will affect all New Jersey’s mental health service consumers and their providers for
years to come. The study of the impact of these changes should begin now and could be
conducted by Rutgers Institute for Health, Health Care Policy and Aging Research.
At stake is the adequacy of New Jersey’s public mental health system. The system is in
danger of deteriorating to a crisis if Medicaid rate-setting does not fund full and fair market
value for services in the new fee-for- service system. A cost-of-living contract adjustment
freeze over a number of years has made it difficult to retain and recruit qualified staff.
Meanwhile, Medicaid expansion through NJ FamilyCare has added 390,000 beneficiaries
in New Jersey, increasing system enrollment by nearly 30%. Strict new compliance
regulations threaten to overwhelm agency capacities. And the proposed change of the
State’s Medicaid payment basis to incidental fee-for-service will severely stress provider
cash flows. In a the transition to a fee for service system these rates must cover the
true and full costs of providing psychiatric rehabilitation services including associated
non-clinical, indirect costs (e.g., utilization review and compliance activities, billing
capacity, working capital).
Unfortunately, New Jersey’s Medicaid reimbursement today is severely deficient. Both
“catch-up” and “correction” are needed to ensure that psychiatric rehabilitation services
receive proper Medicaid specification and funding. Consider the following:
New Jersey’s Medicaid rates are currently the lowest in the nation. Thus many New
Jersey providers no longer accept Medicaid, the fewest of any state. This hobbles
effective PsyR practice and hurts those with mental illness.
Medicaid’s definition of “medical necessity” does not apply to many PsyR practices,
which preempts many effective, efficient aspects of PsyR that can greatly help. However,
state plan amendments could change this situation for the better and help to draw down
more federal funds than NJ does currently, the recent Community Support Services
initiative for Supported Housing is an example.
Gaps abound. Medicaid funds only some but not other elements within certain PsyR
practices which are critical to wellness and recovery (e.g., Supported Employment and
Supported Housing), creating enormous discontinuities and wasting public money.
Without proper support services such as these and others, there may be an over reliance by
some consumers on use of hospital emergency rooms which dramatically increases state
Medicaid expenditures. To this point, we applaud the Governor’s call to have Rutgers
Biomedical and Health Sciences study the causes of the high costs associated with the very
high levels of utilization of the Medicaid system by a minority of individuals and how
health care delivery to them can be improved. It is NJPRA’s position that the adequate
provision of psychiatric rehabilitation practices would be a key improvement made to the
system.
What new rates the State will set, and for what services, now pose the greatest public
health policy challenge to face the Garden State in years:
1. New Jersey’s rates for community health and physician services must be better
than last. Our rates should double just to get to the national average, which still
won’t fully address our state’s highest costs. Rates must also be indexed to
inflation so never again will payments to providers for such critical services be
reduced, as effectively has resulted from New Jersey’s most recent freeze of rates
and so that public mental health providers do not face a shortage of recruiting and
retaining qualified clinicians.
2. Expanding NJ Medicaid’s definition of “medical necessity” to include a) all
PsyR practices, b) all elements of each PsyR practice (e.g., for Supported
Employment, from pre-employment through on-going support services), and c)
activities necessary to support psychiatric rehabilitation (e.g., utilization reviews
and compliance activities, increased billing capacity and related working capital
expenses). Other states do this, so should New Jersey
3. Medicaid specification and funding for sensible adjunctive services when
necessary for safety or flexibility in special situations (e.g., paired rather than single
visits by mobile treatment/support teams, telephonic rather than face-to-face
dialogues of consumers with prescribing specialists and care managers), that more
efficiently and inexpensively enable activation of PsyRand related recovery
practices.1
4. More active legislative oversight of the State’s Medicaid rate-setting process. We
also call for an expansion of Rutgers Biomedical and Health Sciences Medicaid
study to include a review of this process and to provide recommendations on these
rates.
Other key areas where these funds could be effectively utilized would be the provision of
the evidence based and promising practices of supported employment and supported
education so that a greater number of New Jersey’s citizens with disabilities are better
integrated in our business and higher education communities. New Jersey currently funds
a very modest supported employment initiative which has been cut by 20% from the
previous year. On top of that DHS has stretched supported employment services even
further by starting an initiative to provide in reach by the supported employment services
to the state hospital system without additional resources, essentially an unfunded mandate.
The proposed funding for FY’16 does not provide the resources needed for everyone who
wants to work to get the support needed to become responsible, tax-paying members of our
communities. There is ample empirical evidence that employment produces not only
financial benefits but also mental health and physical health benefits, thus reducing medical
and social service costs. Additionally, studies show that education increases employment.
Expansion of these services is crucial to achieving the goals of DMHAS and the state’s
Employment First philosophy. NJPRA therefore proposes that the current state
funding level of $5 million dollars for supported employment be doubled to $10
million so that twice as many consumers can be effectively served.
During the past TWO years direct care workers were slated to receive a half annual
cost of living increase, which is not significant adjustment even in this day and age by
any stretch of the imagination. To make matters worse however is the fact that both
of these adjustments NEVER HAPPENED! The pull back of these token increases
has been highly insulting to a provider community which has assisted the State save
millions of dollars by providing the community services which allow for the closure
of state hospitals. NOW is the time to help these dedicated direct staff members earn
what they deserve by giving them an appropriate annualized cost of living increase.
These hard working individuals, most who are not represented by collective bargaining
units, typically earn salaries below self-sustaining wages and are sometimes eligible for
government benefits themselves. Many direct care staff members have to work two or
more jobs just to make ends meet. They have not received an annualized salary increase
from Fiscal Year 2009. The cost of living has risen significantly during this time (inflation
averaged over 2% per year during this time period). They have very modest benefit
packages. They have always contributed to their health care plans and are now being
required to contribute more – resulting in a reduction of their already low income.
It is very important for you to understand that their counterparts, direct care staff who work
in our state hospitals, earn substantially greater salaries. To give one specific comparison,
a community based direct care worker with a Bachelor’s degree will start at about
$31,000 a year, while salaries for Bachelor level civil service workers start at about
$46,000 (NJAMHAA HR Practice Group Salary Survey, 2010). State hospital staff
have their salaries supplemented by overtime wages and are eligible for a generous state
pensions and health insurance packages. These options are not offered to community based
staff in non-profit agencies.
As we continue the process of downsizing our hospitals, we are discharging patients who
typically have multiple disabilities and require intense support to transition to the
community. The community based direct care staff who are responsible for taking over the
care of these patients are not fairly compensated for this work. We therefore strongly
propose funding for a 3% COLA for the all of direct care staff members in our
community based mental health system so that they can begin to move towards
earning a living wage for the increasingly challenging work that they do every day to
keep our public mental health system intact.
Respectfully,
Leslie Stivale
NJPRA President
(732) 297-5840 Ext. 11
Contact: Chance Lykins, MBI Gluck Shaw, 212 W. State St. Trenton, NJ 08608
Tel: 609-392-3100; Cell: 609-410-6231; Email: clykins@mbi-gs.com