# Presentation: 525558

## Medicaid and Mental Health Services: The Basics

- Policy Academy 9
- November 2, 2005
- Anaheim, California
- Gary Smith
- Human Services Research Institute

## Topics

- Overview of Medicaid’s role
- Children
- Adults
- Waivers and mental health services

## Medicaid is the single largest buyer of behavioral health care services (20% of market; 35% of all public expenditures for mental health services)
States can employ Medicaid to underwrite a wide range of mental health services for both children and adults

- Medicaid is the single largest buyer of behavioral health care services (20% of market; 35% of all public expenditures for mental health services)
- States can employ Medicaid to underwrite a wide range of mental health services for both children and adults

## Eligibility: groups of persons that a State must include in its program or may include on an optional basis (eligibility = access)
Coverage: benefits that a State must or may elect to include in its Medicaid program
Each state is different. States have made different choices about eligibility and coverage.

- _Eligibility_: groups of persons that a State must include in its program or may include on an optional basis (eligibility = access)
- _Coverage_: benefits that a State must or may elect to include in its Medicaid program
- _Each state is different._ States have made different choices about eligibility and coverage.

## Eligibility policies are different with respect to children and adults
Very strong Federal mandates about the scope of services that States must furnish to children
Adults – Federal mandates are more limited.  This affects the provision of mental health services, with respect to both eligibility and benefits

- Eligibility policies are different with respect to children and adults
- Very strong Federal mandates about the scope of services that States must furnish to children
- Adults – Federal mandates are more limited.  This affects the provision of mental health services, with respect to both eligibility and benefits

## Eligibility: FPL is the floor. Most States have expanded eligibility to include households with incomes above the floor. SSI-eligible children are a mandatory group. SCHIP is another way to expand access.
Coverage: Every child Medicaid beneficiary falls under the requirements of §1902(r) of the Social Security Act – Early and Periodic Screening, Diagnosis and Treatment (EPSDT).

- _Eligibility_: FPL is the floor. Most States have expanded eligibility to include households with incomes above the floor. SSI-eligible children are a mandatory group. SCHIP is another way to expand access.
- _Coverage_: Every child Medicaid beneficiary falls under the requirements of §1902(r) of the Social Security Act – Early and Periodic Screening, Diagnosis and Treatment (EPSDT).

## Any child who requires any service that a State could cover through its Medicaid State plan must be provided the service. For children, there are no such things as “optional services” – all medically necessary services are mandatory
Any health care professional who determines that a child requires a service may order the service (interperiodic screens)

- Any child who requires any service that a State _could_ cover through its Medicaid State plan must be provided the service. For children, there are no such things as “optional services” – all medically necessary services are mandatory
- Any health care professional who determines that a child requires a service may order the service (interperiodic screens)

## Subject to the EPSDT mandate
Outpatient treatment
Rehabilitative services
Therapeutic foster care
Crisis services
Family counseling/intervention

- Subject to the EPSDT mandate
- Outpatient treatment
- Rehabilitative services
- Therapeutic foster care
- Crisis services
- Family counseling/intervention

## Target children most at risk of hospitalization
Can provide additional benefits that do not fall under the EPSDT mandate (e.g., respite and other wraparound services)
Can be used to expand eligibility to include children who might not otherwise qualify
Five States operate; several States are in the design phase 

- Target children most at risk of hospitalization
- Can provide additional benefits that do not fall under the EPSDT mandate (e.g., respite and other wraparound services)
- Can be used to expand eligibility to include children who might not otherwise qualify
- Five States operate; several States are in the design phase

## Eligibility: People who meet Social Security disability tests or adult members of households with dependent children
Adult eligibility is very uneven across the States
Single or childless adults with a mental illness access Medicaid through the “disability portal.” Eligibility for people who do not receive SSI varies considerably

- Eligibility: People who meet Social Security disability tests or adult members of households with dependent children
- Adult eligibility is very uneven across the States
- Single or childless adults with a mental illness access Medicaid through the “disability portal.” Eligibility for people who do not receive SSI varies considerably

## All community mental health benefits are optional benefits
Coverage across the States is uneven  
All states offer basic outpatient/clinic benefits 
Critical concern – benefits for people with serious mental illnesses

- All community mental health benefits are _optional_ benefits
- Coverage across the States is uneven
- All states offer basic outpatient/clinic benefits
**Critical concern** – benefits for people with serious mental illnesses

## Serious mental illness means ... 

- A diagnosable mental disorder that results in *substantial functional impairment* in one or more major life activities over an extended period; e.g.:
- Basic living skills
- Instrumental living skills
- Everyday functioning
- A.K.A. “serious and persistent mental illness”

## People with serious mental illnesses ...

- Require intensive services; outpatient services alone often are insufficient
- Need supports for extended periods
- Often have co-occurring disorders
- Experience high rates of homelessness, incarceration, and unemployment
- Experience frequent hospitalization

## Effective community mental health services for adults ....

- Promote community tenure
- Avoid “crisis cycle”
- Reduce hospital spending
- Reduce incarceration and homelessness
- Promote positive outcomes and recovery

## Supporting Adults in the Community: Key Medicaid State Plan Benefits

- Rehabilitative services
- Targeted case management
- Prescribed drugs

## “Rehab Option”

- Services and treatments that restore functioning
- Under the direction of a mental health professional (vs. directly supervised or furnished by a clinician)
- May be furnished anywhere in the community – not tethered to clinic sites
- Nearly every State uses the rehab option

## Coverage

- Usually tightly targeted to people with serious mental illnesses; functional eligibility screens
- Distinct from outpatient clinic benefit
- States have flexibility in defining scope of benefit and specific services offered
- State coverages range from narrow to wide
- Example of comprehensive benefit package: Georgia

## Rehab Option Services

- Basic life/social skills
- Helping people manage their mental illnesses
- Family counseling
- Crisis stabilization/response
- Treatment
- Residential supports (element of supportive housing)

## Targeted Case Management

- Coordinate rehab, other Medicaid and non-Medicaid services
- TCM usually operates in tandem with rehab option
- In mental health, TCM usually is tightly targeted to people who require continuous supports

## Prescribed Drugs

- Medications are a central element in the treatment of serious mental illnesses
- Challenge: finding the most effective medication for each person
- Mental health services are affected by State decisions concerning drug formularies

## About one-third of the States provide mental health services under Medicaid waivers
Waivers are used to deliver mental health services through managed care entities
Permit more flexible, “whole person” approaches to service delivery
Managed care poses management challenges for States

- About one-third of the States provide mental health services under Medicaid waivers
- Waivers are used to deliver mental health services through managed care entities
- Permit more flexible, “whole person” approaches to service delivery
- Managed care poses management challenges for States

## Wrap-up

- Medicaid can _finance_ a wide range of critical mental health benefits across the age spectrum
- Access revolves around eligibility. No access, no benefits
- For adults, coverage is critical. Rehab option is the linchpin
- There is a wide gulf between what Federal law allows and what States cover
- Medicaid does not buy community housing

## Expanded use of Medicaid is possible in most States, but states are nervous about Medicaid
Medicaid is a way to finance services; it is not a “system of care”  
Many problems in effectively employing Medicaid to support children and adults are system-of-care issues, not Federal policy issues 
Especially with respect to mental health services, integrating and managing services and benefits across funding streams is critical

- Expanded use of Medicaid is possible in most States, but states are nervous about Medicaid
- Medicaid is a way to finance services; it is not a “system of care”
- Many problems in effectively employing Medicaid to support children and adults are system-of-care issues, not Federal policy issues
- Especially with respect to mental health services, integrating and managing services and benefits across funding streams is critical