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 nontraditional, 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 SOLUTION
SHORT-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 SOLUTION
LONG-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 SOLUTION
INDEPENDENT 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
jflores@sfc.virginia.gov
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APPENDIX I
Intensive 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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