MARVIN SWARTZ, MDPROFESSOR AND HEAD

SOCIAL AND COMMUNITY PSYCHIATRYDIRECTOR, DUKE AHEC PROGRAM

DUKE UNIVERSITY SCHOOL OF MEDICINE

Where Should We Lead?The Role of Psychiatrists in a ‘Reforming’

Public and Private System

A Brief National and Local Context

Rise then depopulation of the state hospital

Promise and pitfalls of the community mental health center movement

Rise of behavioral health managed care (carve-outs)

NC mental health reformsHopes for parity and health care reform

Dorothea Dix: Mission to Establish Asylums

• Visited nearly every state testifying to state of mentally ill

• Spurred establishment of many state hospitals

• Convinced Congress to establish land grant for mentally ill

Franklin Pierce Veto 1854

Pierce vetoes a bill sponsored by Dorothea Dix calling for the sale of federal lands to subsidize institutions for indigents with mental disabilities:

“[I]f Congress has the power to make provision for the indigent insane. . .it has the same power to provide for the indigent who are not insane, and thus to transfer to the Federal Government the charge of all the poor in all the States.... “

President Kennedy’s Message

“We must act to bestow the full benefits of our society to those who suffer from mental disabilities; to prevent occurrence of mental illness…wherever and whenever possible; to provide for early diagnosis and continuous care in the community, of those suffering from these disorders; to stimulate improvements in the level of care given the mentally disabled in our State and private institutions, and to reorient those programs to a community-centered approach; to reduce, over a number of years and by hundreds of thousands, the persons confined to these institutions; to retain in and return to, the community the mentally ill… and there to restore and revitalize their lives through better health programs and strengthened educational and rehabilitation services…”

Kennedy, J.F., Message from the President of the United States Relative to Mental Illness and Mental Retardation, Washington D.C.: USGPO, 1963.

CMHC Movement

Build out and growth in 1960s—serving catchment areas of ~200,000

Initial direct federal fundingHampered by lack of clear direction or

consensus on target populationsHopes for dramatic re-vitalization during Carter

administration thwarted by Reagan defunding of Mental Health Systems Act of 1980

Dwindling federal support and transition to Medicaid

Advent of Behavioral Health Managed Care

Late 1980s --Mental health care seen as open-ended & discretionary (“worried well”).

Co-incident rise of private psychiatric hospitals led to unnecessary stays

Specialized (carve-out) managed care companies offered employers separately managed behavioral health insurance plans.

Many insurers chose to implement these carve out plans—legally—due to lack of parity

Value of Private Behavioral Health Benefits, 1988-1998 (NAPHS/Hays Group)

0

500

1000

1500

2000

2500

3000

1988 1998

General healthcareBehavioral healthcare

$155

$2372

$2527

6.2%$70

$2099

3.2%

$2169

.

Source: Substance Abuse and Mental Health Services Administration. (2011). National Expenditures for Mental Health Services & Substance Abuse Treatment 1986-2005. Washington, DC. As cited in Kaiser Commission on Medicaid and the Uninsured. (April 2011). Mental Health Financing in the United States: A Primer. Washington, DC.

Boyd et al: Clarifying Multimorbidity Patterns to Improve Targeting and Delivery of Clinical Services for Medicaid PopulationsCenter for Health Care Strategies, December, 2010.

Boyd et al: Clarifying Multimorbidity Patterns to Improve Targeting and Delivery of Clinical Services for Medicaid PopulationsCenter for Health Care Strategies, December, 2010.

Key Elements of State Plan

●Per state: Area Programs can not have dual role as manager and provider of care

● Area Programs supplanted by Local Management Entity (LME)

●Divestiture: privatizes care from public to private providers and directs LME to develop provider networks.

●Eliminate 700 state hospital beds by 7/1/06

Source: NC Division of MH/DD/SAS

1755

1616

1464

1314

1176 1180 1180 1180

1083

924 944

850

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Sum of 2001 Sum of 2002 Sum of 2003 Sum of 2004 Sum of 2005 Sum of 2006 Sum of 2007 Sum of 2008 Sum of 2009 Sum of 2010 Sum of 2011 Sum of 2012

Total Operating State Hospital Beds

Re-investment Strategy—“Medicaid it”

State hospital admissions not Medicaid reimbursable for adults ages 22-64 (IMD Exclusion).

Reduction of State bed dollars can leverage Medicaid community-based services ($1 state $3 Medicaid).

BUT: Need existing community capacity to reduce admissions—bridge funding needed.

Early years--Downsizing savings not realized.

Reforming Reform (Perdue)

Perdue administration attempts to restore medical accountability—creates CABHAs (critical access behavioral health agency)

New Legislature very worried about Medicaid shortfalls, potential expansion under ACA

Mandated rapid expansion of Medicaid Managed Carve-out Plan---1915b/c Waiver

New challenges: Must use substantial state dollars for DOJ settlement What are implications of Mental Health Parity and

Health Reform?

Federal Parity Legislation: Background

Wellstone and Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) enacted 10/3/2008 as part of ARRA

Creates “Equal rights in health insurance”—ends insurance discrimination

Federal predecessor—Mental Health Parity Act of 1996 Eliminated differential annual or lifetime limits Covered large group market, but not small groups or

self-insured plans Excluded substance use disorders No prescription benefit

MHPAEA Features

Continues existing legal provisions—annual and lifetime limits

Applies to large group market and insurers Including ERISA groups State and local govt. Medicaid managed care organizations (?)

Adds substance use disorders to disorders protected

Adds special rule for prescription drug benefitsDoes NOT cover: plans under 50 people, the

individual market and Medicare

Other MHPAEA Features

Does not mandate mental health benefit coverage If MH covered, plan must comply for those benefits

Opt out for state and local government self insured plans

Generally effective January 1, 2011

Federal Parity Rules issued 11/13

Prohibit plans from imposing any different:Financial requirements (eg. Co-pays, deductibles)Treatment limitations

Quantitative Treatment Limitations (eg. 30 day hospitalization)

Non-quantitative Treatment Limitations (eg. utilization review standards and processes, definitions of medical necessity)

“Requirements and limitations can not be any more restrictive than the predominant ones applied to substantially all the med/surg benefits within the same benefits classification”

Health Care Reform (ACA) Features

Integrates MH into reforming health systemAdds preventive services/screening (eg. depression)Makes MH/SA treatment an essential benefit in

health exchange plansIncreases access

Medicaid expansion up to 133% of poverty Affordable private coverage through HI Exchanges Adds coverage through age 26 for dependents Eliminates pre-existing conditions BUT: eliminates Disproportionate Share Funding

Where Should We Focus?

• Staying at the table at policy forums • Resisting marginalization in MCO and provider

organizations• Fighting for Parity• Advocating for Medicaid Expansion and sensible system

reform• Leading on MCO performance and quality metrics• Addressing Psychiatry workforce shortages and

solutions• Leading clinical care redesign• Leading the efforts on Integrated care• Finding efficiencies—Medicaid formulary example

“IT IS DIFFICULT TO OVERSTATE THE MAGNITUDE OF THE WORKFORCE CRISIS IN BEHAVIORAL HEALTH.”

--SAMHSA /ANNAPOLIS COALITION

Will the MH/SA Workforce be Adequate to Benefit and Enrollment Expansion?

Psychiatrist FTEs per 10,000 Population(# of Counties)

0.99 to 10.27 (18)0.60 to 0.98 (20)0.33 to 0.59 (18)0.01 to 0.32 (27)No Psychiatrists (17)

Source: North Carolina Health Professions Data System, with data derived from the North Carolina Medical Board, 2004; LINC, 2005.Produced by: North Carolina Health Professions Data System and theSoutheast Regional Center for Health Workforce Studies, Cecil G. ShepsCenter for Health Services Research, University of North Carolina at Chapel Hill.

Psychiatrist Full-Time Equivalents per 10,000 PopulationNorth Carolina, 2004

*Psychiatrists include active (or unknown activity status), instate, nonfederal, non-resident-in-training physicians who indicate a primary specialty of psychiatry,

Total Psychiatrists = 1,061

child psychiatry, psychoanalysis, psychosomatic med, addiction/chemical dependency,forensic psychiatry, or geriatric psychiatry, and secondary specialties in psychiatry, child psychiatry and forensic psychiatry.

Child Psychiatrist FTEs per 10,000 Child Population(# of Counties)

5.0 to 10.3 (2)2.0 to 4.9 (5)1.0 to 1.9 (8)Fewer than 1 (42)No Child Psychiatrists (43)

Child Psychiatrist Full-Time Equivalents per 10,000 Child PopulationNorth Carolina, 2004

*Child psychiatrists include active (or have unknown activity status), instate,nonfederal, non-resident-in-training physicians who indicate a primary or secondaryspecialty of child psychiatry. Child population includes children 18 and under.

Total Child Psychiatrists = 223

Source: North Carolina Health Professions Data System, with data derived from the North Carolina Medical Board, 2004; LINC, 2005.Produced by: North Carolina Health Professions Data System and theSoutheast Regional Center for Health Workforce Studies, Cecil G. ShepsCenter for Health Services Research, University of North Carolina at Chapel Hill.

The Nation’s Behavioral Health Workforce Crisis

(Annapolis Coalition)

“Across the nation there is a high degree of concern about the state of the behavioral health workforce and pessimism about its future.

There is equally compelling evidence of an anemic pipeline of new recruits to meet the complex behavioral health needs of the growing and increasingly diverse population in this country.

It is difficult to overstate the magnitude of the workforce crisis in behavioral health. The vast majority of resources dedicated to helping individuals with mental health and substance use problems are human resources, estimated at over 80% of all expenditures. “

Workforce Training (Annapolis Coalition)

“There is overwhelming evidence that the behavioral health workforce is not equipped in skills or in numbers to respond adequately to the changing needs of the American population.

Most of the workforce lacks the array of skills needed to assess and treat persons with co-occurring conditions.

Training and education programs largely have ignored the need to alter their curricula … and, thus, the nation continues to prepare new members of the workforce who simply are underprepared from the moment they complete their training.”

A Behavioral Health Workforce in Crisis

The workforce issues encompass difficulties in: recruiting and retaining staff, the absence of career ladders for employees, marginal wages and benefits, limited access to relevant and effective training, the erosion of supervision, a vacuum with respect to future leaders, financing systems that place enormous burdens on the

workforce to meet high levels of demand with inadequate resources.

How will NC respond to the workforce shortages?

Can NC Grow it’s Way Out of Psychiatry Shortages?

GME (Residency) slots are capped at 1996 level—can’t grow more

Most of the counties with psychiatry shortages are also primary care shortages!

Need different models of careCalls for task-shifting and collaborative care

type models.

Provider Shortages, Care Re-design and Psychiatry

In every health care reform scenario there is a shortage of psychiatrists

If we can not grow our way out of psychiatry manpower shortages—what remedies do we propose?

What is our strategy for primary care?Specialty mental health care?What is the role of collaborative and team-

based care?

Gov. McCrory: Partnership for a Healthy NC

New Legislature and Governor want Medicaid budget predictability--“write a check for Medicaid”

Propose a new wave of Medicaid reforms to control costs and integrate general and behavioral health Proposes 1115 Medicaid Waiver and 6(?)Regional

Comprehensive Care Entities

Three key issues: Carve-in vs. carve-out Privatization Risk assumption

Whither “Reform?”

Arguably—National trend is toward “carving-in” behavioral health and strengthening primary care homes.

Community Care of NC—prime example of Enhanced PCMH

Few states are currently moving ahead with pure carve-out models for Medicaid Managed Care

How does “carving out” mental health care affect other parts of the Medicaid program?

How does “carving in” address the highly specialized needs of severely mentally ill patients?

Privatization can also be a failure—how are contracts structured and effectively monitored by the state?

Source: Bob Atlas NC DHHS Consultant, November , 2013

Source: Bob Atlas NC DHHS Consultant, November ,2013

CAUTION: Tennessee's Failed Managed Care Program for Mental Health and Substance Abuse Services

In July 1996, Tennessee initiated a managed mental health and substance abuse program called TennCare Partners. This publicly funded "carve-out" experiment started chaotically and soon deteriorated into a crisis. Many patients did not receive care or lost continuity of care, and the traditional "safety net" mental health system nearly disintegrated. This qualitative case study sought to ascertain the impact of the TennCare Partners program. It points out that the program's difficulties stemmed directly from a flawed design that spread funds previously earmarked for severely mentally ill patients across the entire Medicaid population. States contemplating similar reforms should strive to protect vulnerable patients by risk-adjusting capitation payments and by focusing resources on care for severely mentally ill persons. States should also minimize program complexity and ensure the accountability of managed care networks for their patients' behavioral health care needs.

Source: Chang et al, JAMA. 1998;279(11):864-869.

Adequate Administrative Capacity is Key to Realizing the Goal of Running a High Performing Medicaid Program.

A state’s ability to make the most of the opportunities currently available to it depends on its ability to effectively and efficiently manage its program.

Administrative capacity includes at least three key elements: resources, skills and systems.

During an economic downturn, when the need for a balanced budget requires significant cuts, the Medicaid program can be an obvious target, as a major portion of the state budget.

Often state legislatures will resist cutting services and the administrative budget takes the deepest cut, with the impact of that cut magnified by the reduced federal match: a $1 cut in state dollars results in a $2 cut in the Medicaid agency’s administrative budget.

Adequate Administrative Capacity is Key to Realizing the Goal of Running a High Performing Medicaid Program.

In the midst of the most recent recession, staff furloughs have been a common strategy for managing administrative funding reductions.

While these reductions have leveled off in recent years, increased investment in funding and staffing Medicaid agencies has been limited. As a result of budget cuts fewer staff members are available to carry a heavier burden. Timelines for implementing ACA reforms has also increased demands on Medicaid program staff

Within the level of resources provided, state personnel and contracting requirements can either support or impede the effective deployment of resourcesWhether fulfilling its basic responsibilities for administering a Medicaid program or retooling its operations to respond to new demands, a Medicaid agency does not always have the discretion to hire needed staff

.

Adequate Administrative Capacity is Key to Realizing the Goal of Running a High Performing Medicaid Program.

.

With these restrictions on hiring and procurement decisions, state Medicaid programs must compete for sophisticated clinical, financial and analytic expertise that can match that of the managed care organizations and providers they are negotiating with yet they can rarely pay what the private sector does.

In some cases, the state will opt to contract out for expertise, but the lack of investment in in-house expertise can limit access and leave that expertise vulnerable to contract renewals and negotiations. However, even when a state contracts out for expertise, the state needs the staff capacity to oversee those contracts and consultants.

Adequate Administrative Capacity is Key to Realizing the Goal of Running a High Performing Medicaid Program.

.

Unfortunately, the natural forces of the state budgeting process often work against state investment in a Medicaid program’s administrative capacity, at the same time that the complexity of managing a Medicaid program has only increased over time.

Inadequate investment in Medicaid administrative capacity could undermine a state’s ability to fulfill its responsibilities under federal and state law, as well as its ability to achieve the most from this important program.

Critical Issues for Medicaid Managed Care Implementation in NC

DHHS and DMA will be very hard pressed to oversee and monitor a new Managed Medicaid program.

DHHS and DMA need resources, skills and systems on staff—not among consultants to monitor new vendors.

Will need well developed contract/performance management measurement.

Should pilot approach in one region as we did with PBH and 1915b/c waiver.

PSYCHIATRY’S ROLE IN PRIORITY SETTING IN PUBLIC AND PRIVATE

MANAGED CARE

What is Psychiatry’s Role in Performance and Outcomes

Measurement?

Performance measurement

Accountability

Measure for Summative

presentation and comparison

Quality improvement

Measure for improvement

Performance management

Measure to predict effect of

management interventions

Structure

Setting of care

delivery

Process

Activities between

practitioner and

patient

Outcome

Effectiveness and

efficacy

Classifications of indicatorsPurpose of measurement

Source: Baars et al, Int J Health Palnn Mgmt 2012; 25: 200. DOI: 10.1002/hpm

OPPORTUNITIES FOR PSYCHIATRISTS TO OFFER

VALUE TO PUBLIC AND PRIVATE HEALTH PLANS

Stewardship of the Formulary

.

Source: Substance Abuse and Mental Health Services Administration. (2011). National Expenditures for Mental Health Services & Substance Abuse Treatment 1986-2005. Washington, DC. As cited in Kaiser Commission on Medicaid and the Uninsured. (April 2011). Mental Health Financing in the United States: A Primer. Washington, DC.

Psychiatrists do have considerable expertise in use of psychotropics

Considerable opportunity for improvement

High use in Medicaid formulary

Opportunities for savings

Most psychotropic meds provided by non-psychiatrists

Stewardship of the Formularies

Where Should We Focus?

• Staying at the table at policy forums • Resisting marginalization in MCO and provider

organizations• Fighting for Parity• Advocating for Medicaid Expansion and sensible system

reform• Leading on MCO performance and quality metrics• Addressing Psychiatry workforce shortages and

solutions• Leading clinical care redesign• Leading the efforts on Integrated care• Finding efficiencies—Medicaid formulary example

THANKS!

STAY TUNED!