Local Authority Network Advisory Committee (LANAC)
Minutes
August 2, 2012
Austin, Texas
Attendance
LANAC Members:
Present
Valerie Covey
Ginger Blomstrom
Janet Paleo
Ed Dickey
Norm Mealey
Rick Ybarra
Not Present
Ramsey Longbotham
Wayne Brascom
Sonja Gaines
Ron Trusler
Department of State Health Services (DSHS) Staff and Others Present:
Tamara Allen (DSHS)
Lauren Lacefield Lewis (DSHS)
Ross Robinson (DSHS)
Kevin McClean (MHMR of Tarrant County), representing Sonja Gaines
Meeting Minutes:
Valerie Covey, Chair, called the meeting to order at 9:10 a.m.
I.
Public Comment
No public comments were offered.
II.
Approval of minutes
The minutes for the meeting of June 7, 2012 were approved without revision.
III.
Potential revisions to 25 TAC, Chapter 412, Subchapter P (relating to Provider Network
Development)
DSHS presented several proposals to address unresolved issues that inhibit network
development.
Provider payment.
In May, the LANAC considered rule language requiring LMHAs to pay contractors the current
Medicaid rate or a rate established by DSHS for all services. The committee voted to
recommend that this provision apply only to Medicaid clients. After careful consideration of this
recommendation and the potential consequences, DSHS is recommending a modified version of
the original proposal.
Under the modified proposal, LMHAs would be required to pay external provider the Medicaid
(or DSHS) rate for outpatient services for all clients, but DSHS would allow exceptions to the
standard rate if an LMHA can demonstrate a lower cost for non-traditional services. Nontraditional services are those with cost structures distinctly different from Medicaid services,
such as Peer Support and Family Partner services.
Tamara Allen provided an overview of how federal Medicaid dollars and state general revenue
are used and the Medicaid rate-setting process. She discussed how LMHA costs and
expenditures, including provider payments, affect the Medicaid rate and statewide funding. She
also highlighted the options that have been proposed and their potential impact.
In the discussion, it was noted that paying contractors the full Medicaid rate could present major
budget challenges for LMHAs who currently pay their contractors less than the full rate and
contract out a significant portion of their services. A number of LMHAs are likely to oppose this
proposal.
The committee voted to support the department’s recommendation regarding contractor
payment. DSHS will solicit additional feedback from LMHAs and other stakeholders.
Physician services
Texas is facing a shortage of psychiatrists, particularly in the public sector. Some LMHAs are
having difficulty filling vacant positions, often for an extended period of time. Under the current
rule, preference is given to contracting out full service packages, including medication
management. The purpose is to ensure the integrity of the model and avoid fragmented services.
Private providers have identified the difficulty of finding a physician as one of the barriers they
face, and requiring every provider to provide medication management increases the competition
for the few available psychiatrists. In addition, it is expected that many consumers would be
reluctant to move to a new provider if they had to leave their current physicians. Concerns have
also been raised about the difficulty of maintaining continuity of services if a private provider
leaves a local network unexpectedly.
To address these concerns, DSHS proposes that the LMHAs maintain physician services as part
of the critical infrastructure. Providers would have the option of providing those services, but
would not be excluded from the network if they are not able to secure a physician. The preferred
unit of procurement would be all routine outpatient services in a service package, with or without
medication management. To ensure integrated services and consumer convenience, LMHAs and
providers would be required to develop a plan to provide all office-based services at a single
location.
While this proposal protects the continuity of this critical service, it presents a number of
challenges. First, it increases the potential for fragmented service delivery. It may be difficult to
establish single-site services, particularly if the network has multiple providers. Second, the
reimbursement rate for physician services does not cover the cost of the service, and LMHAs
would bear the full burden of this funding shortfall.
In discussing this proposal, committee member also noted that it disincentivizes private
providers from finding solutions to the problem, such as the use of Advanced Nurse
Practitioners. The consensus was that the risks outweighed the potential benefits. The committee
voted to recommend that LMHAs continue to procure complete service packages, including
physician services to be provided by the contractor.
Movement of clients to the external network
Even if a contract is successfully negotiated, a new provider faces considerable uncertainty.
Unless the contractor has an existing site and other sources of revenue, it must make a substantial
financial investment up front. But because referrals are based on consumer choice, it is possible
that the new provider will not have enough clients to support operations, at least within the
timeframe needed. The problem is compounded by the fact that most people are reluctant to
change providers, and many LMHAs have a long waitlist, which means that few new clients are
entering the system. This risk has been a major disincentive to attracting new providers.
To address this issue without compromising consumer choice, DSHS proposes requiring LMHAs
to work with providers and stakeholders (including their local Provider Network Advisory
Committees) to establish a plan to encourage consumer transition to external providers when
new providers join the network. These plans could include opt-out provisions, but must always
allow consumers to choose any available provider. In addition, plans must treat all providers
equally.
Committee members suggested that local consumer-operated groups be included as required
participants in the development of these transition plans. With that addition, the committee
voted to support this proposal.
IV.
Adjourn
The meeting adjourned at 2:00 p.m.