Clinics in Crisis: The Sequel

Thursday, 21 January 2010 00:00

The Titanic, sinking head first into the depths as deckchairs cascade downward towards the sea! That is how Peter Campanelli, President/CEO of Institute for Community Living (ICL), imagines the future of community mental health services as it sails towards the NYS Office of Mental Health’s “Clinic Reform” set to take place April 1st.

Campanelli offered his assessment at “The Tail that Wags the Dog”, a one-day conference exploring “The Impact of Insurance on Behavioral Health” sponsored on January 14th by the Coalition of Behavioral Health Agencies. The event brought together more than 200 leaders from nonprofits and government to hear the perspectives of provider agencies, state officials and representatives of managed care organizations. Gregory Allen (DOH), Bruce Feig (OMH) and Troy Oechsner (DOI) shared the State’s perspective with conference participants.

The problem, as with that now famous iceberg, is not the much talked about and highly-visible restructuring of clinic services and reimbursement rates. “Very few of us would not agree that we are in dire need of being restructured,” says Campanelli. In fact, clinic reform will significantly increase the reimbursement which Article 31 mental health clinics receive for services – increasing the base rate for a unit of service from approximately $76 to $121.

Rather, the problem is the murkier but potentially fatal loss of revenue which lies below the surface. As part of clinic reform, OMH will be ending COPS (Comprehensive Outpatient Services) payments which have been used to offset previously unrealistically low reimbursement rates – including those paid by both Medicaid Managed Care Organizations (MCOs) and commercial MCOs. While OMH clinic reform will increase Medicaid Fee for Service (FFS) rates, it does nothing about managed care rates. Without a change in policy course, providers fear that clinics will be forced to either close entirely – as some already have – or end services for clients outside the Medicaid Fee for Service (FFS) system.

Luckily, however, there appears to be a broad recognition among State officials that the problem is real and that it could significantly impact access to community mental health services for thousands of New Yorkers. Keynote Speaker Wendell Potter (c. ) with the Coalition’s Patricia Gallo Goldstein (l.) and Phillip Saperia (r.).

Last March, OMH raised the issue in its own Clinic Restructuring Implementation Paper. “The average managed care payment for clinic services (without COPs) is approximately one-third to one-half of actual cost,” said OMH. “To ensure continued access to clinic services, OMH needs to address Medicaid managed care underpayments.”

The Coalition’s January 14th conference provided confirmation that OMH is still concerned – and that its concerns are shared by other key state agencies.

“Managed care rates, in my mind, are the biggest issue that remains to be resolved,” said Bruce Feig, Deputy Executive Commissioner at OMH.

“We have empirically documented that the average (managed care) payment is lower than what we are talking about on the Fee for Service side,” agreed Gregory Allen, Director of Financial Planning and Policy at the Office of Health Insurance Programs at NYS Department of Health. “We recognize that we can’t fix clinic restructuring… without addressing both the Fee for Service and the Medicaid Managed Care problem.”

Relief, hinted Allen, may be on the way. “We are looking, for the first time ever, at the possibility of putting money in a plan premium and also creating some kind of standard around payment sufficiency.”

Exactly what that will mean remains to be seen. “I’m not prepared to say more right now,” said Allen. “DOH is planning to do something. Details will come later.”

“That is amazing and gratifying to hear,” responded Phillip Saperia, Executive Director of the Coalition. “It is great to know you are working on it and that you believe in it.”

Danger Ahead!

Several providers offered a vision of what may happen to community mental health services if relief is not forthcoming.

“If we get to April 1st and clinic reform goes into place -- and the other solutions are not in place -- it will only be a matter of months before red ink starts showing up on financial statements,” said Campanelli. In light of other economic pressures facing nonprofits, the focus of boards and managements will be on “how do we get rid of this red ink,” he explained.

“Under this new system, the Medicaid Managed Care rate and the commercial rate is about 48% of actual costs,” Campanelli continued. “Our clinics would be losing close to $1 million a year. What are we going to do? One response is that we can’t continue to see these clients. We would have to drop the clients on these plans, shrink our clinics and consolidate them. That is one of the options we are seriously considering.”

Alan Trager, Executive Director/CEO of Westchester Jewish Community Services, offered proof that these are no idle threats: “I am here as an example of a casualty,” he told the conference. Last July, WJCS closed its clinic in Yorktown Heights, a clinic which had been operating for forty years. “The total amount of money we will lose over the course of the next three years is $3 million annually. That is a lot of money,” says Trager.

WJCS’ experience also highlighted the disparate impact which clinic restructuring and loss of COPS payments can have based on the payer mix at individual clinics.

While a Coalition survey of 16 member agencies found that, on average, commercial insurance paid for just 13% of total visits, commercial managed care covered 64% of WJCS’ Yorktown Heights clients. “It is a middle class community,” says Trager. Another 7% were on Medicaid Managed care.

In total, therefore, more than 70% of the clinic’s visits would be paying rates which covered less than half the cost of care. NYNP’s rough calculation would put the clinic’s total loss under these circumstances at close to 40%.

“That is not a recipe for success,” says Trager. “It won’t work with those numbers; it can’t work with those numbers.”

Similar problems confront clinics which serve large numbers of children, explained Fern Aaron Zagor, Executive Vice President and COO at Staten Island Mental Health Society (SIMHS). The result for SIMHS is a payer mix heavily slanted towards Medicaid Managed Care (40%) and “cross-over” clients who have both Medicaid or Medicaid Managed Care and private insurance (21%). “This is something we find unique to serving children where one parent is on Medicaid and the other has private insurance,” says Zagor.

Further complicating SIMHS’ problem is the working class community it serves, giving the agency a private insurance payer base of 28%.

Put it all together and an estimated 89% of SIMHS services are covered by managed care plans paying less than half the actual cost of services – with no COPS payments to make up the difference. The total net loss by our calculation: close to 50%.

Compounding all these issues are the authorization and payment problems well known to providers with managed care clients. “We get a telephone authorization for ten sessions and provide services,” said Milta Vega-Cardona, Director of Billing and Claims at the Puerto Rican Family Institute. “Then, a month later, we get written authorization for only five sessions.”

Same Clients; Same Needs

Are there differences in the diagnoses and treatment needs that would justify lower payment rates for clients covered by managed care plans – commercial or Medicaid – versus fee for service Medicaid?

Absolutely not, said conference participants.

Alan Trager noted that the clients at his Yorktown Heights clinic included 18% with bi-polar disorder, 31% with depression, 23% with anxiety disorder, 19% with adjustment disorder, 6% with attention deficit disorder and 3% with Schizophrenia. “These are not the ‘worried well’,” said Trager.

“I can find very little clinical difference between people who are being paid for by commercial managed care, Medicaid managed care or fee for service Medicaid,” said Peter Campanelli.

Medicaid Managed Care

Up until this point, the system-wide negative impact of payment rate differentials between fee for service Medicaid and Medicaid Managed Care is moderated to some degree by the carve out of individuals with Severe and Persistent Mental Illness (SPMI) from Medicaid Managed Care requirements.

Many observers believe – and providers fear – that possible revisions in DOH’s SPMI definitions or even an elimination of the carve out itself is likely to substantially increase the number of mental health consumers covered in the future through Medicaid Managed Care plans rather than FFS Medicaid. The result, therefore, would be a further loss of reimbursement.

Payment Adequacy

Will the State act to mandate higher rates on Medicaid Managed Care contracts? Will it act in time?

While there may not be past precedent for taking these steps in New York State, there are examples elsewhere. “Pennsylvania mandates that plans pay no less than the Medicaid rate,” said OMH’s Bruce Feig. “It is an interesting concept. Of course their rates aren’t quite as high as ours.”

Network Adequacy

As the ultimate purchaser of services, it seems clear that the State could legally mandate terms of payment to providers for Medicaid Managed Care contracts. However, no such authority exists for commercial health insurance plans.

“While there is a lot that we at the Department of Insurance (DOI) can do, there are a lot of things we can’t do,” said Troy Oechsner, Deputy Superintendent for Health. “We can’t enforce private contract provisions which a provider has with a health plan.”

However, one shared concern is network adequacy, Oechsner explained: “We can put pressure on health plans to make sure their networks are adequate. We have seen a trend in the marketplace towards less benefits, cost shifting onto consumers and skimpier and skimpier networks to try and drive better discounts. We are concerned about people not having access to adequate care.”

Concerns about whether managed care plans – Medicaid or commercial – provide access to an adequate network of providers was a consistent them at the conference.

“We hear stories that somebody has insurance but there is no provider that can give them an appointment in less than six months,” said OMH’s Bruce Feig. “Do you really have a network if there is a six month waiting list?”

One participant urged a review of MCO claims data to determine average wait times between initial assessments and follow-up visits.

Broader Concerns Over Clinic Restructuring

While the Coalition’s conference focused on reimbursement disparities between FFS Medicaid and managed care, providers do have other concerns regarding the OMH clinic restructuring initiative.

First and foremost, providers worry that OMH may be moving too fast. “The contemplated changes are far reaching and will have profound results on service delivery for consumers and families,” says Phillip Saperia. “OMH has performed neither a system-wide nor sample stress test on the new reforms, perhaps allowing the possibility of substantial clinic failures under the new rubric. This eventuality would result in significant loss of access to care for consumers. We ask, therefore that the implementation of clinic reimbursement reforms only occur after there has been a comprehensive effort to model the impact of the reforms on an array of different clinics.”

Community behavioral health providers also oppose the creation of “peer groups” in which different types of service providers, e.g. county-run programs, Article 28s, etc., will receive different rates of reimbursement for the same services. “Clinics should be reimbursed fairly and consistently, reflective of the needs of their consumers and regardless of license or auspice category. If county and State clinics are providing non-clinic services, the State should fund these services with non-Medicaid funds.”

Other concerns include questions about the diversity of clinic consumers, the adequacy of a newly-proposed indigent care pool and the adequacy of networks organized by managed care and commercial insurance companies.

Providers also questioned whether networks relying on individual practitioners rather than clinics could adequately meet the needs of patients with complex behavioral health challenges.

“Clinics provide assessment, psychotherapy, psychopharmacology and they do it in an integrated way under one roof,” said Peter Campanelli. “Without those integrated services, solo practitioners would simply not be able to serve these clients.”

“Not a lot of clinicians tend to have specialty units,” said WJCS’ Alan Trager. “When you lose clinics, you lose access to those kinds of programs.”

Managed Care Responds

In response to the immediate concerns raised regarding inadequate reimbursement rates and treatment authorization issues, managed care organization (MCO) representatives primarily offered a vision of improved collaboration between MCOs and behavioral health providers. New models of integrated and managed care are the only way to address the complex needs of patients in an era of ever tightening resources, they said.

“You can’t do it with a traditional health care model,” said Richard Sheola, President, Public Sector for ValueOptions. The highest cost patients – 70-80% of whom have co-occurring physical, behavioral and substance abuse conditions – “are beyond the reach of health plans

Juliana Ekong, MD, Associate Medical Director, Behavioral Health, AMERIGROUP Community Care, argued that relationships between MCOs and providers need not be adversarial. She cited her own experience at a clinic where, in her opinion, the introduction of managed care led to significant increases in the quality of patient care. “Things began to change for the better,” she said.

Ekong noted that AMERIGROUP was seeking to build new relationships with providers, including the creation of medical homes to coordinate a patient’s physical and behavioral health care.

William Lamoreau, Senior Vice President of Government Programs at Emblem Health, came closest to responding to the payment concerns of providers when he described the challenges facing health care providers everywhere. “All segments of health care are facing reimbursement and funding cuts,” he argued. “I run a Medicare plan that is going to get 5% less next year. Hospitals are going to get less money. Doctors are looking at a 20% payment cut at CMS. Everyone is dealing with lower reimbursements and trying to figure out the best way to survive in that environment.”

Emblem, too, was interested in exploring partnerships with providers to improve service integration – and bring down costs – for groups of patients with the most complex service needs, he said.

Access to Care

If providers are forced to pull the trigger on clinic closings or cancellation of agreements with managed care plans, it would effectively deny access to care for a substantial portion of the estimated 90,000 New Yorkers who get their mental health services through community mental health clinics. It seems particularly ironic that just as the nation seems poised for health care reform – and only a year after Timothy’s Law mandated behavioral health parity – having insurance coverage might ultimately deny clients access to care.

“We are gratified to have been able to bring together representatives of State government, managed care organizations and provider to begin a dialogue about these important issues,” said Patricia Gallo Goldstein, Deputy Executive Director at the Coalition. “Hopefully this is just the beginning.”

It’s the Language, Stupid!

“Do you know what really sucks if you are a liberal?”

That was the question that Keynote Speaker Wendell Potter asked participants at “The Tail that Wags the Dog”, the Coalition of Behavioral Health Agencies’ January 14th conference exploring “The Impact of Insurance on Behavioral Health”.

The answer, he explained, is getting your butt kicked by conservatives in the debate over health care reform – not because you are wrong on policy, but because you don’t know how to argue your case in ways that resonate with the American people and inspire them to action.

Potter should know. A former high level communications executive with a major health insurance company, Potter quit his job when he tired of hearing his own corporate talking points being used to derail health care reform.

“The insurance industry and its allies were far better at communicating the case against reform than advocates of reform were at communicating the case for it,” says Potter.

The root cause, he says, is liberals’ faith in “policy speak”. Progressives believe that if you tell people the facts, they will support your policy; that you should convince people with the logic of your arguments.

“It sounds like the high road, rational public discussion in the best tradition of liberal democracy,” says Potter. “But it is nuts from a behavioral and linguistic point of view. It is almost always more effective to appeal to a person’s emotions.”

The term “public option”, for example, was the ultimate “policy speak loser”, says Potter. “It never conveyed the moral and inspiring ideal behind it.” One alternative might have been to describe it as “The American Plan”. Similarly, when opponents raised fears of a “government takeover” of health care, advocates should have criticized the current “Wall Street takeover”.

Progressives need to understand how their arguments will be heard by the people they are trying to convince. Ditch the jargon and communicate with anyone -- other than your business colleagues -- the same way you would communicate with your mother-in-law, says Potter.

“To steal a line from James Carville, ‘It’s the language, stupid’,” says Potter.

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