Psych hos­pi­tals seek al­ter­na­tive as Med­i­caid pi­lot fund­ing ends

Modern Healthcare - - NEWS - By Vir­gil Dick­son

A CMS demon­stra­tion pro­vid­ing Med­i­caid pay­ment for residential men­tal health ser­vices in 11 states ended abruptly in April, leav­ing pa­tients and providers up in the air.

Since the cre­ation of Med­i­caid 50 years ago, the pro­gram has ex­cluded pay­ment for in­sti­tu­tions of men­tal dis­ease (IMDs), a clas­si­fi­ca­tion that in­cludes most residential treat­ment fa­cil­i­ties for men­tal health and sub­stance-abuse dis­or­ders with more than 16 beds.

The Af­ford­able Care Act au­tho­rized $75 mil­lion over three years for the Med­i­caid Emer­gency Psy­chi­atric Demon­stra­tion. The ini­tia­tive, ad­min­is­tered by the CMS In­no­va­tion Cen­ter, was to test whether Med­i­caid could get higher qual­ity care at a lower over­all cost by cov­er­ing emer­gency care at pri­vate psy­chi­atric hos­pi­tals.

Eleven states and the Dis­trict of Columbia par­tic­i­pated in the pro­gram, which started in July 2012 and was sup­posed to end De­cem­ber 2015. But the hos­pi­tals were no­ti­fied in April that the pro­gram was end­ing early be­cause fund­ing was ex­hausted. “Sud­denly, the funds just stopped, and we might not even get paid for some of the ser­vices we’ve al­ready pro­vided,” said Dr. Az­far Ma­lik, CEO of Cen­terPointe Hos­pi­tal, a psy­chi­atric fa­cil­ity in St. Charles, Mo.

Providers sus­pect the money ran out be­cause the Med­i­caid rolls bulged be­gin­ning in 2014 when the ACA Med­i­caid ex­pan­sion took ef­fect.

A CMS spokes­woman de­clined to com­ment on why the pro­gram ended and said there were no plans to ex­tend the demon­stra­tion. A fi­nal eval­u­a­tion re­port is not due un­til Septem­ber 2016.

Mark Co­vall, pres­i­dent of the Na­tional As­so­ci­a­tion of Psy­chi­atric Health Sys­tems, said the IMD ex­clu­sion has caused Med­i­caid ben­e­fi­cia­ries with men­tal ill­ness to en­dure long stays in gen­eral hos­pi­tal emer­gency de­part­ments. If no beds are avail­able at a gen­eral hos­pi­tal, emer­gency psy­chi­atric pa­tients are re­ferred to stand­alone psy­chi­atric fa­cil­i­ties. Un­der fed­eral law, those fa­cil­i­ties can’t deny ad­mis­sion even though Med­i­caid won’t pay them be­cause of the IMD ex­clu­sion. As a re­sult, providers say, the pa­tients of­ten are dis­charged early and re­ceive lower-qual­ity care.

Co­vall’s group is lob­by­ing Congress to ex­tend the demon­stra­tion through Septem­ber 2016 so that Med­i­caid would con­tinue to pay for the ser­vices un­til law­mak­ers can re­view the re­sults. A Se­nate bill with bi­par­ti­san sup­port was in­tro­duced in Fe­bru­ary, but there has been no move­ment on it. The Obama ad­min­is­tra­tion plans to test another strat­egy to ad­dress Med­i­caid’s IMD ex­clu­sion.

The CMS this month pro­posed that Med­i­caid man­aged-care plans be al­lowed to pay pri­vate psy­chi­atric fa­cil­i­ties for short-term stays.

While some psy­chi­atric fa­cil­i­ties have praised the pro­posal, oth­ers were dis­ap­pointed that stays would be lim­ited to 15 days. “Some of the in­di­vidu- als are pro­foundly ill and the 15-day limit could pose a sig­nif­i­cant chal­lenge in terms of be­ing able to care for these peo­ple,” said Dr. Lawrence Price, pres­i­dent of But­ler Hos­pi­tal in Providence, R.I. There was no such lim­i­ta­tion for the demon­stra­tion, he added.

Alabama’s Med­i­caid pro­gram doesn’t con­tract with man­aged-care plans, said Tuerk Sch­lesinger, CEO of Al­taPointe Health Sys­tems in Mo­bile, Ala., which had two psy­chi­atric fa­cil­i­ties par­tic­i­pat­ing in the CMS demon­stra­tion. So his fa­cil­i­ties are ex­cluded un­der the pro­posal.

Few beds are avail­able for se­verely men­tally ill peo­ple in his state, and con­tin­u­ing to care for the pa­tients with­out pay­ment would be fi­nan­cially cat­a­strophic for his com­pany. “We wouldn’t be able to stay open very long,” he said.

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