California’s Next Section 1115 Waiver:
Response to State of California October 19 Concept Paper
On October 19, the State Department of Health Care Services (CDHCS) released a draft
concept paper outlining its vision and goals for a new Section 1115 Medicaid Waiver. The
State proposes to focus on Fee-For-Service Medi-Cal beneficiaries who have multiple
chronic health conditions and utilize a high proportion of Medi-Cal resources. As the
Waiver document states, “for many beneficiaries, the Medi-Cal program does not provide
care coordination to help obtain needed services.”
Legislation authorizing the State to pursue the Waiver identified six goals, and CDHCS is
proposing four initiatives to achieve them. The Integrated Behavioral Health Project
(IBHP) supports the intent of the concept paper to promote care coordination through the
development of organized delivery systems of care. We believe that such systems of care
should provide incentives to fully integrate behavioral health and physical health care
services. IBHP offers the following comments in support of that goal.
Integrated behavioral health care should be an explicit component of organized
delivery systems of care developed for all four populations specified by the concept
paper.
IBHP is pleased that integrated behavioral care is a stated goal for the Adults with Severe
Mental Illness population, which would be phased in last as outlined in the concept paper.
However, beneficiaries in all four patient population groups experience mental health
conditions, some very significantly, even though they may not rise to “severe mental
illness.” Additionally, beneficiaries in all four patient population groups may have cooccurring substance use/abuse. Therefore, behavioral health, both mental health and
substance use/abuse services, should be integrated in all systems of care serving these
populations to improve health outcomes and reduce costs.
In particular, persons with disabilities experience a high level of mental health problems. A
recent study by the Center for Health Care Strategiesi found that the prevalence of
psychiatric illness among Medicaid beneficiaries with disabilities is significantly greater
than previously thought. By studying pharmacy utilization by this population, the
frequency of psychiatric illness among Medicaid beneficiaries with disabilities increases
from 29% to 49%. The study concluded that:
“…Medicaid beneficiaries with disabilities frequently have multiple chronic conditions
and particularly high rates of psychiatric illness and cardiovascular disease. The
analysis also reinforced that spending for beneficiaries with disabilities is skewed
disproportionately to those with high levels of co-morbidity — 45% of those with three
or more chronic conditions account for 75% of costs. These enhanced insights can help
states and health plans better prioritize high-opportunity groups of beneficiaries and
design programs that integrate physical, behavioral, and social supports to more
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effectively meet beneficiaries’ needs. “
In order to improve the health outcomes and reduce costs for this population—nearly half
of the Seniors and Persons with Disabilities (SPD) to be served under the waiver have a
mental health condition that warrants medication—it is critical to address their behavioral
health issues. It has been demonstrated that the costs of treating chronic medical
conditions go down when the co-occurring mental health condition is also treated. The
IMPACT model of integrated behavioral health has shown, for example, that over a 4 year
period, total health care costs are $3,300 less for the group enrolled in the IMPACT
program than it would otherwise cost. The reduction is primarily results from
improvements – and therefore less need for inpatient and outpatient services – in peoples’
medical conditions.
Although we recognize that, in order to stage the implementation of the waiver, it may be
necessary to segment the population into discreet categories, in reality, people experience a
spectrum of physical and behavioral health conditions that do not neatly fall into the
proposed four groups. In fact, by “siloing” populations, the Waiver risks undermining the
principles of integrated and coordinated care. Therefore, we strongly recommend that the
organized systems of care developed in all phases of the Waiver include integrated
behavioral health.
Integrated behavioral health models should account for the spectrum of complexity
of both physical and behavioral health.
As described above, individuals in SPD category will have a range of mental health and
substance use conditions, and adults in the Severe Mental Illness (SMI) category will
likewise suffer from a variety of physical health conditions. In fact, people with serious
mental illness die 25 years younger than the general population; 60 percent of premature
deaths among persons with schizophrenia result from untreated or poorly treated medical
conditions, such as cardiovascular disease, diabetes, and pulmonary diseasesii.
IBHP believes that the Four Quadrant Model, developed by the National Council for
Community Behavioral Healthcare, provides a useful framework for assessing patient
needs, based on the severity and complexity of both a person’s physical and behavioral
health conditions:
Quadrant I: Low Behavioral Health, Low Physical Health
Quadrant II: High Behavioral Health, Low Physical Health
Quadrant III: Low Behavioral Health, High Physical Health
Quadrant IV: High Behavioral Health, High Physical Health
Although it is likely that the majority of the SPD population may fall into Quadrant III, with
some people in Quadrant I, or that the majority of the SMI population may be categorized in
Quadrants II or IV, that will not be the case for all individuals. Creating systems that are
dynamic, allow consumer choice or preference, and can assess and connect individuals with
the most appropriate health care home and set of services will be essential to success.
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To that end, organized delivery systems should clarify the respective roles for Primary Care
Providers (PCP) and Behavioral Health providers (BH), as well as for specialty care
providers, which may vary for individuals with conditions described by the different
quadrants. Therefore, bi-directional care, which enables people with a primary care
provider as a medical home to receive behavioral health within the primary care setting
and visa versa—unless more specialized care is needed—is an important component of
integrated behavioral health. Both PCPs and BHs could potentially serve as health care
homes, depending on the local delivery system capacities and the design of the system.
Stepped care would provide the linkages for persons needing specialized care to transition
to the higher level of care and persons with stable BH conditions could transition back to
PCPs.
Moreover, all four population groups specified by the concept paper have high needs for
specialists – whether for a physical disability, a pediatric illness, or severe mental illness.
Specialty care will clearly need to be provided, and the organized delivery system of care
will need to establish whether that can be provided within the healthcare home or through
referrals and partnerships.
Continuation or expansion of the Health Care Coverage Initiative (HCCI) should
include integrated behavioral health.
Recent analysis of the ten Health Care Coverage Initiatives (HCCI)iii indicate that they have
made progress in expanding access and enhancing care coordination through medical
homes. However, these models have generally not included behavioral health as part of the
medical home and, therefore, they are not sufficient to address the needs of the uninsured
population. These models have been built upon county mandated indigent care programs;
examination of county operated indigent care program claims demonstrates a high
frequency of mental health and substance use diagnoses, despite payment restrictions for
those conditions.
It is likely that the majority of this population would fall under Quadrants I and III, although
there would be individuals who have more complex conditions as well, such as so-called
Frequent Users. As CDHCS considers continuing the HCCI, and even expanding it to more
counties, IBHP strongly recommends that CDHCS establish standards for a medical home—
which we would suggest renaming to a health care home—which would include, at a
minimum, integrated behavioral health care.
The Waiver should provide appropriate incentives for integrated behavioral health
and care coordination.
The Waiver should enable local/regional pilots to develop and test reimbursement
mechanisms that support different health care home models that include behavioral health.
Just as there are different service delivery models for health care homes that could be
tested as part of the Waiver, so, too, are there different reimbursement models. They
include an enhanced case or visit rate that establishes responsibility in the healthcare home
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for care management and coordination, screenings, consultations, etc., direct
reimbursement for services, or prospective payment methodologies.
Proposals now under consideration by Congress as part of health reform include some of
these ideas. Should health reform pass, the Waiver should look to pilot models that can lay
the foundation for broader adoption. The Waiver could test out these ideas, gain
experience, and determine their impacts.
Implementation of Health Information Technology and Health Information Exchange
should include behavioral health.
Integrated behavioral health and care coordination depend on being able to share
information and medical records, consistent with privacy requirements, to enable the
providers to develop a care plan that addresses all of the patient’s needs. As the
parameters for such systems are established, behavioral health must be included in the
design of the systems and behavioral health safety net providers must be included for
outreach and adoption.
An integrated behavioral health project for persons with mental illness and physical comorbidity being implemented in Bucks County, Pennsylvania has found that a data
infrastructure that promotes information exchange is an essential pillar for care
coordination.iv This will be particularly important for implementation of the fourth phase—
adults with severe mental illness. Unless and until full integration of these programs
occurs, these individuals will likely be served by separate health plans, providers and
systems of care, so the ability to exchange information will be critical to coordinating care.
Integrated Behavioral Health Project. Launched in 2006, the Integrated Behavioral Health
Project (IBHP) is an initiative designed to accelerate the integration of behavioral health
services into primary care settings in California. The initiative’s goals are to enhance access
to behavioral treatment services, improve treatment outcomes for underserved populations,
and reduce the stigma associated with seeking such services. IBHP, a project of the Tides
Center, is funded by The California Endowment as part of its strategic goal to promote the
health of underserved individuals and families by expanding access to quality health and
mental health services. For more information please go to www.ibhp.org or contact
Mary Rainwater, Project Director at: mary@ibhp.org
i
Kronick, R. et al. “The Faces of Medicaid III: Refining the Portrait of People with Multiple Chronic
Conditions.” Center for Health Care Strategies. October 2009.
ii
Mauer, B. “Integrated Care: A National Perspective”, presentation to Collaborative Family Health Care
Association. October 2009. (Citing NASHMPD 2006)
iii
Pourat, N., et al. “Health Coverage in the Safety Net: How California’s Coverage Initiative is Providing a
Medical Home to Low-Income Uninsured Adults in Ten Counties, Interim Findings.” UCLA Center for Health
Policy Research. June 2009.
iv
See http://www.chcs.org/usr_doc/Zebrowski.pdf
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