Financing and Delivery of Behavioral Health Services and the Patient Protection and Affordable Care Act
Released: 2011-09-19T00:00:00

Summary:
Behavioral health disorders (including both mental disorders and substance use disorders) affect a large number of people and contribute costs to the health care system, even as indicated treatment is often not received by individuals in need. In the United States, an estimated 26% of non-institutionalized adults experience behavioral health disorders in a given year; over the course of a lifetime, the estimate rises to 46%. One study estimated spending on behavioral health care in 2005 to be $135 billion, of which $40 billion was paid by the federal government (including $10 billion by Medicare) and $44 billion by state governments. Both higher and lower cost estimates have been found in other studies. Among U.S. adults suffering from a behavioral health disorder severe enough to interfere with major life activities in 2009, 40% received no treatment; despite spending on behavioral health care, cost remains the most common barrier to treatment reported by adults with unmet need.
The federal government has a role in both the financing and delivery of behavioral health care services, as a payer, regulator, and provider, and as such, Congress may have an interest in behavioral health care broadly. This interest was reflected in the recently enacted health reform law (Patient Protection and Affordable Care Act [PPACA], P.L. 111-148, as amended). Although transforming the behavioral health care delivery system was not an explicit focus of the law, it includes sections that are expected to increase access to behavioral health services through changes to the financing and delivery of health care services.
This report provides an overview of sections in the health reform law that are expected to affect the financing and delivery of behavioral health care services. Access to health care services is determined by multiple factors, including (among other things) financing arrangements and covered benefits. PPACA may increase access to behavioral health services by increasing the availability and affordability of financing arrangements; the law also contains sections that will affect both the coverage of behavioral health services, as well as the conditions under which those services are covered. In addition, PPACA contains sections that are likely to affect the way in which health care services are delivered, specifically through changes to the workforce, the safety net, and new care delivery models.
The report concludes by presenting the relevant sections in a series of nine tables: (1) essential health benefits; (2) mental health parity; (3) private health insurance; (4) Medicare; (5) Medicaid; (6) safety net services; (7) workforce; (8) miscellaneous sections (e.g., sections on research, education, or community-based services, among others); and (9) relevant Indian Health Service (IHS) sections (in an appendix).

subsections: section_title: Introduction
paragraphs: Behavioral health disorders affect a large number of people and contribute costs to the health care system, even as indicated treatment is often not received by individuals in need. In the United States, an estimated 26% of non-institutionalized adults experience behavioral health disorders in a given year; over the course of a lifetime, the estimate rises to 46%. One study estimated spending on behavioral health care in 2005 to be $135 billion, of which $40 billion was paid by the federal government (including $10 billion by Medicare) and $44 billion by state governments. Both higher and lower cost estimates have been found in other studies. Among U.S. adults suffering from a behavioral health disorder severe enough to interfere with major life activities in 2009, 40% received no treatment. Despite spending on behavioral health care, adults with unmet need report numerous barriers to access, including factors such as cost, lack of time, and not knowing where to go for treatment, among others. 
The federal government has a role in both the financing and the delivery of behavioral health care services, as a payer, regulator, and provider. It pays for behavioral health care services through the Medicare and Medicaid programs and, in its role as regulator, has required the establishment and coverage of a minimum set of benefits, including behavioral health care services, for many private health plans, as well as the Medicaid program. It supports the delivery of safety net services as a direct provider (e.g., Indian Health Service) and through the development and training of safety net health care providers (e.g., the National Health Service Corps). The federal government supports both clinical training for the behavioral health workforce as well as programs to alleviate provider shortages. Given the investment in these programs, among others, the financing and the delivery of behavioral health care services are likely to be of interest to Congress. 
Congressional interest in behavioral health care is reflected in the recently enacted health reform law (Patient Protection and Affordable Care Act [PPACA], P.L. 111-148 , as amended). Although transforming the behavioral health care delivery system was not an explicit focus of the law, it includes sections that are expected to increase access to behavioral health services through changes to the financing and the delivery of health care services. Changes to financing affect both financing arrangements (e.g., public programs like Medicare and Medicaid, as well as private health insurance) and coverage of specific services (i.e., covered benefits) under those arrangements. Changes to the delivery system affect (among other things) the delivery of safety net services and the development of the health workforce. PPACA includes sections that are specific to behavioral health, as well as broad reforms to health care financing and delivery that will affect behavioral health.
This report provides an overview of sections in PPACA identified as having relevance to behavioral health. It first discusses these sections broadly in the context of both financing and delivery of behavioral health care services. It then presents relevant sections from the law, and selected information about each section, in a series of eight tables (see Tables 1 through 8 ).
section_title: PPACA and Financing of Behavioral Health Care
paragraphs: Access to health care services is determined by multiple factors, including (among other things) financing arrangements and covered benefits. Addressing both components concomitantly may increase access to care more efficiently than addressing each component independently. For example, if existing financing arrangements are augmented or new arrangements are created, access will increase only to those services that are covered. Similarly, if benefits under existing financing arrangements are expanded (as through a coverage mandate) or the terms of those services are altered (as through mental health parity law ), these changes are relevant only for those individuals participating in the financing arrangement. This section briefly discusses sections in PPACA that address these dimensions of access to care and that are relevant to behavioral health. 
subsections: section_title: Financing Arrangements
paragraphs: PPACA may increase access to behavioral health services by increasing the availability and affordability of financing arrangements. As of 2006, nonelderly adults with evidence of mental illness had higher rates of uninsurance (37% versus 27%), higher rates of public coverage through Medicaid and/or Medicare (24% versus 6%), and lower rates of coverage by private health insurance (39% versus 66%), when compared to nonelderly adults with no evidence of mental illness. PPACA is expected to increase the number of people with behavioral health disorders who have health coverage, through (1) expansion of Medicaid eligibility, (2) market reforms for private health insurance, and (3) creation of health insurance exchanges. 
Medicaid Expansion. PPACA creates a new Medicaid eligibility category for specified individuals with incomes up to 133% of federal poverty level. This expansion is particularly relevant for behavioral health, as Medicaid is the largest source of financing for behavioral health services and targets populations that are less likely to have other financing arrangements and more likely to need behavioral health services. Researchers estimate that after the implementation of PPACA, the number of users of behavioral health services in the Medicaid program will increase by approximately 2.3 million. 
Private Health Insurance Market Reforms. PPACA contains many sections requiring reforms to the private health insurance market; these reforms are expected to increase access to the private market generally by removing many existing coverage eligibility requirements. The numerous reforms include, among others, guaranteed issue and renewal of policies; a prohibition on discrimination based on preexisting conditions or health status; a prohibition on rescissions; and limits on the factors that may be considered when pricing plans (community rating). Considered together, these reforms will allow some individuals with behavioral health disorders to purchase private insurance that previously would have been either unavailable to or unaffordable for them (due, for example, to the designation of a behavioral health disorder as a preexisting condition).
Health Insurance Exchanges. PPACA requires and supports states' creation by 2014 of "American Health Benefit Exchanges." State-based exchanges are marketplaces where individuals and employers may purchase comprehensive private health insurance plans. Exchanges may decrease the cost of coverage for certain individuals through risk-pooling, thereby making private health insurance more affordable. Additional responsibilities of the exchanges include certifying plans and identifying individuals eligible for Medicaid, CHIP, and premium and cost-sharing credits. Some individuals with behavioral health disorders who are currently uninsured may be able to purchase insurance through the exchanges. 
section_title: Covered Benefits
paragraphs: As noted previously, the effect of expanding financing arrangements on access to care is dependent, in part, on the benefits covered under those arrangements. Coverage of benefits may be considered both as a question of whether a particular service is covered at all, and as a question of the conditions under which the service is covered. PPACA contains sections that will affect both the coverage of behavioral health services, as well as the conditions under which those services are covered. Specifically, PPACA addresses coverage of behavioral health care services through (1) essential health benefits and (2) mental health parity. 
Essential Health Benefits. PPACA creates a partial coverage mandate for mental health and substance use disorder services. As mentioned above, PPACA enables the establishment of exchanges. Plans offered in the exchanges, the Qualified Health Plans (QHPs), must meet a number of requirements, one of which is the offering of a minimum set of benefits (the Essential Health Benefits [EHB]). These benefits are statutorily defined to include mental health and substance use disorder services. PPACA does not require all plans to offer the EHB. It specifically requires four types of plans to offer the EHB: (1) new plans offered through the individual market, (2) new plans offered through the small group market, (3) QHPs offered inside and outside the exchanges, and (4) certain Medicaid plans, specifically, the benchmark and benchmark equivalent plans. 
Mental Health Parity. PPACA affects the terms under which behavioral health services are offered by expanding the applicability of federal mental health parity law. The goal of federal parity law is to make coverage terms for mental health and substance use disorder services, when those services are offered, no more restrictive than those terms for medical and surgical services. PPACA builds on existing federal parity law by expanding the requirement for compliance with the law to three types of plans: (1) QHPs offered through the exchanges, (2) plans offered through the individual market, and (3) Medicaid benchmark and benchmark-equivalent plans (that are not managed care plans).
section_title: PPACA and Delivery of Behavioral Health Care
paragraphs: Access to care is not merely a matter of financing; it also depends on the health care service delivery system. PPACA contains sections that are likely to affect the way in which health care services are delivered. Two major aspects of the health care service delivery system addressed by PPACA are the safety net and the health care workforce. In addition, a number of sections establish models of patient-centered care that aim to improve health outcomes, increase coordination of care, and integrate behavioral health care services into mainstream clinical settings. This section briefly discusses sections in PPACA that address these dimensions of the health care service delivery system and that are relevant to behavioral health.
subsections: section_title: Safety Net
paragraphs: Safety net facilities, such as community health centers (CHCs), are an important source of care for individuals with behavioral health disorders; as of 2003, more clinical visits at CHCs were attributed to behavioral health disorders than to any other condition. PPACA contains sections that directly appropriate funding for the construction and operation of safety net facilities, including CHCs and other types of health centers. PPACA funding is expected to contribute significantly to increased capacity in the safety net; for example, between 2009 and 2015, health center caseloads are expected to increase from 19 million to between 34 million (assuming mandatory funding levels) and 44 million (assuming appropriation of authorized funding levels).
section_title: Workforce
paragraphs: PPACA includes sections that are expected to affect the health care workforce providing behavioral health care services through the development of the safety net workforce, incentives to increase the supply of primary care physicians, and efforts to alleviate mental health provider shortages. Between 1998 and 2003, the average number of behavioral health patients per CHC nearly tripled (from 302 to 899); at the same time, the average number of behavioral health providers per CHC remained level, and the average number of primary care providers per CHC increased. Researchers have speculated that primary care providers may be delivering most of the behavioral health care services in CHCs. PPACA incentivizes the development of the safety net workforce through increased National Health Service Corps (NHSC) funding; targeted loan repayment programs; and incentives to teaching health centers to establish or expand residency training programs, among other things. Additionally, PPACA includes funding for training in primary care and for education of primary care providers specifically about behavioral health services, among other workforce sections. 
As of July 2011, 95 million Americans lived in 3,770 areas designated as mental health professional shortage areas by the Health Resources and Services Administration (HRSA); HRSA estimates that an additional 6,221 practitioners would be required to meet the need for mental health providers in these shortage areas. In addition to the efforts noted above to expand the safety net workforce, and specifically primary care physicians, PPACA creates a program targeting training funds for specific types of mental health professionals who will be treating high-need or vulnerable populations. 
section_title: New Models of Care Delivery
paragraphs: PPACA includes a number of sections that aim to incentivize changes to the delivery of health care services, and that are likely to affect the delivery of behavioral health services. Specifically, PPACA sections support models of care that are patient-centered with an emphasis on improved care coordination; the integrated delivery of behavioral health care services with other health care services; and an increased emphasis on primary and preventive care. The law creates the option for states to establish "health homes" for individuals with chronic conditions, including behavioral health disorders, in the Medicaid program. New grant programs will support educating primary care physicians about behavioral health care services and the co-location of primary and specialty care in community-based mental health settings. 
section_title: Presentation of Relevant PPACA Sections
paragraphs: Sections in PPACA identified as being relevant to behavioral health care have been divided into nine tables. The first five tables address topics described under " PPACA and Financing of Behavioral Health Care ": (1) essential health benefits; (2) mental health parity; (3) private health insurance; (4) Medicare; and (5) Medicaid. The remaining tables address topics described under " PPACA and Delivery of Behavioral Health Care ": (6) safety net services; (7) workforce; and (8) miscellaneous sections (e.g., sections on research, education or community-based services, among others). Relevant Indian Health Service (IHS) sections are in Appendix A .
In each table, sections are presented by relevant issue area; for example, the private health insurance sections are divided into those relating to (1) private market reforms and (2) the health insurance exchanges. Each table then presents a description of the section, its section number, and whether it is a new or existing authority. Finally, each table indicates whether the section is specific to behavioral health (noted with "S"), or is general in nature (noted with "G"), but affects behavioral health care providers or their patients. Sections may appear in multiple tables, where relevant, as the tables are not mutually exclusive. 
Appendix A. Indian Health Service Sections Relevant to Behavioral Health in the Patient Protection and Affordable Care Act of 2010 (P.L. 111-148, as amended)
Appendix B. Search Strategy
This report provides information about sections in the Patient Protection and Affordable Care Act of 2010 (PPACA, P.L. 111-148) that relate directly or indirectly to behavioral health. In order to identify relevant sections, a search was performed of the consolidated Act using the following terms: "behavioral," " mental," "psych," and "substance." In consultation with other CRS analysts, the resulting list of sections was revised by including additional sections that would have an impact on behavioral health care providers and their patients, and excluding sections that would not. Because there is neither a specific part of PPACA dedicated to behavioral health nor standard language applied to all relevant sections, CRS is unable to ensure that the listing it has provided is comprehensive.
Appendix C. Acronym Listing
The following acronyms appear in this report: 
Area Health Education Center (AHEC) Centers for Disease Control and Prevention (CDC) Centers for Medicare & Medicaid Services (CMS) Community Health Center Fund (CHCF) Department of Health and Human Services (HHS) Department of the Interior (DOI) Federal medical assistance percentage (FMAP) Food and Drug Administration (FDA) Health Care and Education Reconciliation Act of 2010 (HCERA) Health Professional Shortage Area (HPSA) Home and Community-Based Services (HCBS) Indian Health Care Improvement Act (IHCIA) Indian Health Service (IHS) Indian Tribe (IT) Institutions for Mental Disease (IMD) Long-Term Care (LTC) Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) National Health Service Corps (NHSC) Patient Protection and Affordable Care Act of 2010 (PPACA) Pharmaceutical Research and Manufacturers of America (PhRMA) Public Health Service Act (PHSA) School-Based Health Center (SBHC) Social Security Act (SSA) Substance Abuse and Mental Health Services Administration (SAMHSA) Tribal Organization (TO) Urban Indian Organization (UIO)