Demo will ex­pand pay for psy­chi­atric hos­pi­tals

Modern Healthcare - - NEWS - Paul Barr

Demon­stra­tion will boost pay for psych hos­pi­tals

Hospi­tal in­dus­try ex­ec­u­tives will be ea­ger to see the re­sults of a Med­i­caid pi­lot project launched last week that could lead to ex­panded Med­i­caid re­im­burse­ment for free-stand­ing psy­chi­atric hos­pi­tals.

The three-year CMS demon­stra­tion, an­nounced March 13, will give a to­tal of $75 mil­lion in fed­eral funds to 11 par­tic­i­pat­ing states and the Dis­trict of Columbia, which in turn will have to kick in their own funds, es­ti­mated to be as much as $50 mil­lion. The demo, called the Med­i­caid Emer­gency Psy­chi­atric Demon­stra­tion, re­sults from a pro­vi­sion in the Pa­tient Pro­tec­tion and Af­ford­able Care Act.

The states are to use the money to cre­ate Med­i­caid re­im­burse­ment pro­grams for psy­chi­atric pa­tients ages 21 to 64 and seek­ing emer­gency treat­ment at what the CMS calls in­sti­tu­tions for men­tal dis­ease, or IMDS, a type of hospi­tal care that doesn’t cur­rently qual­ify for Med­i­caid re­im­burse­ment.

The pi­lot, if suc­cess­ful, could in­spire Congress to pass leg­is­la­tion to fund such care through Med­i­caid for the en­tire coun­try, with the idea of low­er­ing costs while im­prov­ing care. The demon­stra­tion, which could also in­clude state Med­i­caid fund­ing of as much as $50 mil­lion, should pro­vide valu­able in­for­ma­tion on the ef­fec­tive­ness of in­creas­ing Med­i­caid cov­er­age at psych hos­pi­tals, said Mark Co­vall, pres­i­dent and CEO of the Na­tional As­so­ci­a­tion of Psy­chi­atric Health Sys­tems. “We’re go­ing to learn how much is be­ing spent, and how much we saved or didn’t save as part of im­ple­ment­ing this” demon­stra­tion, he said.

Med­i­caid al­ready spends a lot on men­tal health and is the largest payer for treat­ment, ac­cord­ing to a Fe­bru­ary 2011 study in Health Af­fairs. In 2005, 10% of Med­i­caid spend­ing was on men­tal health, a to­tal of $31.1 bil­lion in that year, ac­cord­ing to the re­port.

But Co­vall said shift­ing some of the psy­chi­atric emer­gency care to psych-fo­cused hos­pi­tals shouldn’t in­crease costs, be­cause psych hos­pi­tals can pro­vide in­pa­tient care at as lit­tle as 50% of the cost that an acute-care emer­gency depart­ment can. More­over, many acute-care EDS are over­bur­dened and Med­i­caid pa­tients are un­able to get the psy­chi­atric care they need from those fa­cil­i­ties, “I think it will save money in the long run,” Co­vall said.

Re­becca Chickey, di­rec­tor of the sec­tion for psy­chi­atric and sub­stance abuse ser­vices at the Amer­i­can Hospi­tal As­so­ci­a­tion, said that although there may be acute-care hos­pi­tals that would pre­fer that there not be a na­tional change to Med­i­caid psych re­im­burse­ment, the AHA en­dorses the demon­stra­tion as part of the ACA. “We’ll have to see if the demo achieves it goals,” Chickey said. “I’m hopeful.”

Many pa­tients who miss out on care do so in part be­cause of cost, ac­cord­ing to an April 2011 re­port from the Kaiser Com­mis­sion on Med­i­caid and the Unin­sured, called Men­tal Health Fi­nanc­ing in the United States: A Primer. A 2009 sur­vey by the fed­eral gov­ern­ment found that 45.7% of men­tal health pa­tients not get­ting care cited cost as a rea­son why, the re­port noted.

Through a quirk in the law that dates to the be­gin­ning of Med­i­caid in 1965, acute-care hos­pi­tals are re­im­bursed for such care by Med­i­caid, and many in the in­dus­try have sought to give psy­chi­atric hos­pi­tals the same re­im­burse­ment for years. “It’s about time. It hasn’t been a level play­ing field for the IMDS,” said Dr. Steven Sharf­stein, pres­i­dent and CEO of Shep­pard Pratt Health Sys­tem, Bal­ti­more, an IMD that will be par­tic­i­pat­ing in the demon­stra­tion through Mary­land’s suc­cess­ful ap­pli­ca­tion.

IMDS, de­fined as in­de­pen­dent psy­chi­atric hos­pi­tals with more than 16 beds, were orig­i­nally ex­cluded from Med­i­caid be­cause at the time and for years be­fore that, men­tal health fund­ing was con­sid­ered to be the re­spon­si­bil­ity of the state alone, through public hos­pi­tals. The de­sign­ers of Med­i­caid saw no rea­son to take on the cost of that care.

But the men­tal health­care model has changed, with far fewer pa­tients liv­ing in in­sti­tu­tions and more seek­ing care on an emer­gency ba­sis at pri­vate acute-care and psy­chi­atric hos­pi­tals. And, of course, the Emer­gency Med­i­cal Treat­ment and Ac­tive La­bor Act re­quires that IMDS treat ER pa­tients whether they have in­sur­ance cov­er­age or not.

The 10 other states in the demo are Alabama, Cal­i­for­nia, Con­necti­cut, Illi­nois, Maine, Mis­souri, North Carolina, Rhode Is­land, Washington and West Virginia. The AHA’S Chickey praised the CMS for spread­ing the de­mos across the coun­try to re­flect the di­verse na­ture of the states’ Med­i­caid pro­grams. The demon­stra­tion is ex­pected to be­gin July 1 and calls for the CMS to re­port to Congress no later than Dec. 31, 2013, a CMS spokes­woman said.

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