Making the Ohio Medicaid Business Case for Integrated Physical and Behavioral Health Care

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1 Making the Ohio Medicaid Business Case for Integrated Physical and Behavioral Health Care FOR THE BEST PRACTICES IN SCHIZOPHRENIA TREATMENT (BEST CENTER) NORTHEASTERN OHIO UNIVERSITIES COLLEGES OF MEDICINE AND PHARMACY & HEALTH FOUNDATION OF GREATER CINCINNATI AUGUST 2011

2 Table of Contents Background 2 Medicaid and Behavioral Health 2 Methodology 3 Clarification of Diagnostic Hierarchies and Definition of Serious Mental Illness 5 Key Findings 6 Total Medicaid Costs of SMI Adults 7 Demographics 8 Co occurring chronic physical health conditions 9 Co occurring Substance use disorder 10 Cost Drivers among SMI adults 10 Psychiatric care in the Non Specialty System 13 Forecasting 2014 Medicaid Costs of Newly Eligible SMI Adults 14 Conclusion 15 HEALTH MANAGEMENT ASSOCIATES 1

3 BACKGROUND The Best Practices in Schizophrenia Treatment (BeST) Center of the Northeastern Ohio Universities Colleges of Medicine and Pharmacy (NEOUCOM), with funding support from the Health Foundation of Greater Cincinnati, contracted with Health Management Associates (HMA) to document the Ohio Medicaid business case for integrated physical and behavioral health services. To carry out the work, HMA sub contracted with the Ohio Colleges of Medicine Government Resource Center (GRC) along with an independent consultant to conduct an analysis of Medicaid cost and utilization data. HMA also subcontracted with renowned psychiatrist, Neal Adams, M.D., M.P.H., who provided expertise on structuring the analysis to consider various diagnoses and how clients access mental health and substance use disorder (SUD) treatment services. The purpose of the analysis was to determine the nature and severity of co occurring chronic conditions, inpatient hospital and emergency department utilization, prescription drug utilization, access to primary care medical services and demographic characteristics of adult Medicaid beneficiaries with severe mental illness (SMI). Additional analysis was conducted to estimate future costs and utilization of individuals who will be newly eligible for Medicaid beginning in 2014, many who will have untreated mental and substance use (behavioral health) disorders. Prior to conducting the analysis, HMA sought and received support of the Ohio Departments of Mental Health (ODMH) and Job and Family Services (ODJFS) to confirm that the project s objectives were not contrary to state agency goals. Preliminary research findings were presented on February 24, 2011 to over 100 behavioral health and primary care providers, consumers, advocates, managed care organizations (MCOs) and state policymakers. 1 Research findings were used to inform Governor Kasich s Medicaid Transformation Budget priorities, which include a focus on care coordination and integrating physical and behavioral health services. MEDICAID AND BEHAVIORAL HEALTH Ohio s publicly funded primary, acute and behavioral health safety net services operate as parallel systems, often with limited connection or interaction. The consequences of this fragmentation are significant. Recent data has clearly shown that individuals with severe mental illness die twenty five years earlier than their peers, in part because of limited access to quality primary care (e.g., 60% of premature deaths for people with schizophrenia can be attributed to preventable or treatable medical conditions). For the past decade, Medicaid programs have become an increasingly important payer of behavioral health services. In fact, nationally: Medicaid is the single largest payer for mental health services in the United States. 2 Medicaid is the nation s dominant purchaser of antipsychotic medications. 3 1 The presentation is available at %20Case%20for%20Integrated%20Care.pdf. 2 Centers for Medicare and Medicaid Services, Overview of Mental Health Services, HEALTH MANAGEMENT ASSOCIATES 2

4 By 2014, Medicaid spending is expected to increase annually by 8.3% for mental health services and by 6.2% for addiction treatment services. 4 About 12% of Medicaid beneficiaries received mental health or SUD treatment services in 2003, accounting for almost 32% of total Medicaid expenditures. 5 Nearly 27% of all inpatient hospital days paid for by Medicaid in 2003 were for mental health and addiction treatment. 6 Beneficiaries with mental illness and SUD are more likely than other Medicaid beneficiaries to have one or more costly co occurring physical health conditions. 7 The Affordable Care Act (ACA) 8 significantly expands Medicaid eligibility and lays the groundwork for fundamental changes in the way behavioral health services are financed and delivered. By 2019, Ohio s Medicaid population is expected to increase by 936,000 individuals, and estimates indicate that one fifth to one third of the currently uninsured are people with mental illness and/or substance use disorders. Ohio s newly eligible Medicaid population will likely have significant behavioral health care needs. As a result, the State will need to: Carefully evaluate how it will deliver, pay for and monitor behavioral health services in the future in order to ensure that the State can respond to this new demand; Ensure payment for the right services, at the right time, in the right settings and in the right amounts based on individuals changing health needs; and Be proactive in the design of benefits and services in order to facilitate, and not thwart, effective integration of physical and behavioral health services. METHODOLOGY States such as California, Maine and Missouri have utilized Medicaid claims and other data sources to drive behavioral health policy and coverage decisions. For example, the California Department of Health Care Services utilized one statistic ( 10% of adult Medicaid beneficiaries with SMI accounted for 38% of total Medi Cal costs ) to shape the scope of its Section 1115 Medicaid Waiver renewal proposal, in part to address the higher rates of chronic physical health conditions (e.g., diabetes, hypertension, cardiovascular disease, metabolic disorders and respiratory conditions) among SMI adults. 9 Interest in an ability to recite similar statistics for Ohio required a comprehensive analysis of Medicaid fee for service and managed care encounter data. To conduct the analysis, researchers utilized deidentified Medicaid claims and encounter data from state fiscal years (SFY) 2008 and Included in 3 Frank, R., Conti, R. and Goldman, H., Mental Health Policy and Psychotropic Drugs. The Milbank Quarterly, Vol. 83, No. 2, 2005 (pp ). 4 Substance Abuse and Mental Health Services Administration. (2010). Mental Health and Substance Abuse Services in Medicaid, 2003: Charts and State Tables. HHS Publication No. (SMA) 10 XXXX. Rockville, MD: Center for Mental Health Services, Substance Abuse and Mental Health Services Administration. 5 Ibid. 6 Ibid. 7 Ibid. 8 The Patient Protection and Affordable Care Act (PPACA, P.L ), as amended by the Health Care and Education Reconciliation Act of 2010 (HCERA, P.L ), is collectively referred to in this paper as the Affordable Care Act of 2010 (ACA). 9 The waiver provides for enrollment of seniors and persons with disabilities in managed care to achieve better care coordination and management of chronic conditions. HEALTH MANAGEMENT ASSOCIATES 3

5 the analysis were service claims from the community behavioral delivery system available through MACSIS (Multi Agency Community Services Information System). Managed care organization (MCO) encounters were pseudo priced 10 to reflect DRG assignment and pricing of inpatient hospital visits; professional, institution and prescription drug encounters using Medicaid FFS payment averages and adjustments of prescription drug encounters to reflect manufacturers rebates. To identify adults with SMI, Dr. Adams developed a hierarchy of diagnoses to which Medicaid claims of individual were assigned [see below about limitations of classifying individuals as SMI]. Assignment to a single diagnosis was necessary since individuals often have multiple diagnoses rendered by different providers across various settings. The goal was to identify the most serious and debilitating mental illness conditions and place them at the highest position on the hierarchy with those representing the less severe end of the spectrum at the bottom of the SMI hierarchy. From highest to lowest, the diagnoses were: 1. Schizophrenia 2. Psychosis 3. Bipolar disorder 4. Depression 5. Post traumatic stress disorder 6. Adjustment disorder 7. Anxiety 8. Substance use disorder 9. Other" disorders (personality disorder, psychological consequences of brain disorder, and sexual disorder) So, for example, if an individual had a diagnosis of both anxiety and schizophrenia, the individual would be assigned to the Schizophrenia group. For purposes of this analysis, individuals with a primary diagnosis of mental retardation/developmental disabilities were excluded. However, individuals with secondary MR/DD conditions are included. Dr. Adams also recommended that SMI adults should be stratified across the following categories: Specialty Only: 11 A classification to isolate SMI adults who only used the community behavioral health system for diagnosis and treatment of mental health conditions. Non Specialty: Individuals in this category did not use the community behavioral health system and instead received services from hospitals, psychiatrists, psychologist, primary physicians, federally qualified health centers, home health agencies or other provider types. Both: Individuals in this category accessed both the non specialty and specialty systems to diagnose and treat mental health conditions. The purpose of the stratification was to differentiate diagnostic and health outcomes findings by users and non users of the specialty mental health system. 10 Pseudo-pricing is necessary since MCO capitation payments and FFS are not identical. For purposes of this analysis, MCO payments were based on rates established under the FFS system. 11 Specialty systems mean the network of mental health and substance use providers under contract with county alcohol and mental health boards to provide Medicaid behavioral health rehabilitative services. HEALTH MANAGEMENT ASSOCIATES 4

6 To identify SMI adults with co occurring substance use disorder, both primary and secondary diagnoses were utilized. Inclusion in this cohort required at least two encounters on separate days. Ambulatory Care Sensitive (ACS) conditions (e.g., diabetes, asthma, dehydration, pneumonia) of SMI adults were determined through use of the AHRQ Prevention Quality Indicators software. Hospital readmissions were determined through use of the 3M Potentially Preventable Re admissions software. CLARIFICATION OF DIAGNOSTIC HIERARCHIES AND DEFINITION OF SERIOUS MENTAL ILLNESS The term serious mental illness is an imprecise term used in both clinical settings as well as in the policy arena to identify those individuals who are likely to be substantially impacted by their mental illness with significant and persistent symptoms, extended treatment needs, and disability or impairment. This designation is particularly important in the policy arena because it is a way of grouping together a broad range of people with an array of psychiatric disorders who all have in common the likely need for a high level of mental health treatment with implications for the cost of care and design of the service delivery system. For this study, a hierarchy of diagnoses was established and individuals with at least two encounters listing the primary diagnosis as one of the nine diagnostic groups were included. While the prevalence of some disorders is relatively low, the costs of care associated with these conditions, such as schizophrenia or bipolar disorder is consistently high; conversely some diagnosis such as depression are were highly prevalent and associated with a range of severity and impact. To some degree, diagnosis is a relative predictor of SMI, but it is not always accurate. While there is probably little question about the impact of diagnoses such as schizophrenia, bipolar disorder, or unspecified psychosis being consistent with the term SMI, a diagnosis of depression is more problematic. Depression is a disorder with a high prevalence and is a frequent co morbid complication of chronic medical condition. Its presentation and impact on individuals is extremely varied or heterogeneous, and can range from mild to moderate and severe for any individual over time. Some individuals experience only brief acute episodes of depression with only a transient impact on their lives, while others have life long problems that may wax and wane over time and result in significant suffering and impairment. For this study and report, careful thought was given about how to account for individuals with a diagnosis of depression in the data analysis and their inclusion in the SMI group. To exclude this diagnostic group entirely seemed unwise. Despite the heterogeneity of individual with this diagnosis, the large numbers of individuals diagnosed with moderate to severe depression needed to be included. Because the criteria of four r more service encounters (claims) or an episode of hospitalization within a year was required for designation as SMI, the assumption was that inclusion of persons with a diagnosis of depression using this threshold of severity would provide the most accurate picture of SMI service recipients. While this approach ran the risk of being overly inclusive of individuals without SMI, from a policy perspective the risk of being too exclusive seemed to be more problematic than being inclusive. For diagnoses in the hierarchy following depression, there is also significant heterogeneity in terms of severity and impact of those disorders. However the relatively low prevalence of these conditions in the population coupled with the screening criteria meant that inclusion would assure an accurate an analysis of the entire study cohort that would not significantly distort the data or its policy implications. HEALTH MANAGEMENT ASSOCIATES 5

7 KEY FINDINGS Adult Ohio Medicaid beneficiaries with SMI: 12 Represent about 10% of total Medicaid beneficiaries and account for 26% of total Medicaid expenditures; When compared to non SMI adults account for 22% of the adult Medicaid population and 44% of adult Medicaid spending; Are fairly evenly distributed across Medicaid eligibility categories but are most represented among CFC adults (31% ABD, 36% CFC and 32% are dually eligible for both Medicare and Medicaid); Have co occurring chronic physical health conditions at rates higher than adult Medicaid beneficiaries without SMI (heart disease, hypertension, diabetes, chronic respiratory conditions, dental disease); When residing in nursing facilities represent a higher proportion of residents under age sixtyfive (42%) compared with non SMI adults in nursing facilities (25%); Have more than twice as many hospitalizations for certain ambulatory care sensitive conditions (asthma and diabetes) than non SMI adults; Have two times higher rates of emergency department visits for asthma than non SMI adults; and Include 29% of beneficiaries receiving no services from the specialty mental health system. As a subset of the SMI population, adult Ohio Medicaid beneficiaries with schizophrenia: Have three times more hospitalizations for uncontrolled diabetes and twice the number of hospitalizations for pneumonia and chest pains compared with non SMI adults; Have twice the number of hospital emergency department visits for hypertension and uncontrolled diabetes than non SMI adults; and Have three times higher costs for skilled nursing facility, prescription drug and home health services than non SMI adults. Forty one percent of adults with SMI have co occurring substance used disorders. Adults with bipolar disorder or post traumatic stress disorder (PTSD), have even higher rates of SUD (46% and 41%, respectively). Of the SMI adults with co occurring SUD 66% were eligible under the CFC category, 22% were ABD and 11% were Duals. Finally, 64% of SMI adults with co occurring SUD received treatment for substance use only in the specialty behavioral health system, 23% were served in both the specialty and non specialty systems and 12% were served only in the non specialty system. Please note that the data are based on documentation of alcohol or substance abuse in claims records and are likely to underestimate the actual rate of substance use disorder. 12 The Best Practices in Schizophrenia Treatment (BEST) Center of the Northeastern Ohio Universities Colleges of Medicine and Pharmacy (NEOUCOM) and the Health Foundation of Greater Cincinnati commissioned a study to document the business case for integrated physical and behavioral health care. Data is available at %20Case%20for%20Integrated%20Care.pdf. HEALTH MANAGEMENT ASSOCIATES 6

8 TOTAL MEDICAID COSTS OF SMI ADULTS In SFY , there were 253,977 adult Medicaid beneficiaries with SMI whose total Medicaid costs totaled $6.8 billion (approx. $3.4 billion in annual Medicaid costs). Depression was the most frequently identified diagnosis among SMI adults. Schizophrenia is less frequently diagnosed than depression; however, services for individuals with schizophrenia are the second highest total annual Medicaid expenditure and the third highest per person expenditure. SMI Qualifying Condition Number Avg. Annual Expenditures Schizophrenia 39,021 $ 784,961,862 Psychosis 9,486 $ 268,079,490 Bipolar 52,547 $ 663,630,548 PTSD 6,150 $ 50,688,779 Depression 86,759 $ 1,062,375,477 Adjustment 14,382 $ 139,939,463 Anxiety 26,545 $ 273,823,715 Substance Use Disorder 17,074 $ 100,163,660 Other 2,013 $ 43,367,571 Total SMI 253,977 $ 3,387,030,569 Annual Medicaid costs per person are higher among SMI adults and even higher among individuals with psychosis and schizophrenia. On averages SMI adults have annual Medicaid costs per person over 2.5 greater than all Medicaid beneficiaries and 1.5 greater than non SMI adults. Adults with psychosis have annual per person costs over 5.5 higher than all Medicaid beneficiaries; adults with schizophrenia have annual per person costs four times higher than all Medicaid beneficiaries. Average Annual Medicaid Expenditures Per Person All Medicaid $ 5,009 Non SMI Adults $ 8,151 SMI Adults $ 13,064 Psychosis $ 28,260 Schizophrenia $ 20,116 Depression $ 12,245 HEALTH MANAGEMENT ASSOCIATES 7

9 Adults with SMI represent about 10% of the Medicaid population and 26% of Medicaid expenditures. SFY total Medicaid costs (includes cost of all physical and behavioral health services) totaled $26 billion for approximately 2.6 million beneficiaries. During the same time period SMI adults accounted for $6.8 billion for 253,977 individuals. Adults with SMI represented 22% of the adult Medicaid population and 46% of adult Medicaid spending. In SFY , Medicaid expenditures for non SMI adults totaled $14.9 million for 1,132,710 individuals. Medicaid spending for SMI adults (253,977 individuals or 22%) totaled $6.8 million, which accounted for 46% of all adult Medicaid expenditures. DEMOGRAPHICS Adults with SMI tend to be younger than non-smi adults. Fifty six percent of SMI adults (142,488) are age compared with 65% of non SMI adults (575,078). Thirty three percent of SMI adults (85,396) are age compared with 21% (180,869) of non SMI adults. Ten percent of SMI adults (26,093) are age 65 and older compared with 14% of non SMI adults (122,786). Seventy eight percent of SMI adults are White (197,634) and 21% are Black (54,417). The racial/ethnic distribution is similar to that of non SMI adults (i.e., 73% of non SMI adults are White and 25% of non SMI adults are Black). Adults with SMI tend to be younger than non-smi adults. Fifty six percent of SMI adults (142,488) are age compared with 65% of non SMI adults (575,078). Thirty three percent of SMI adults (85,396) are age compared with 21% (180,869) of non SMI adults. Ten percent of SMI adults (26,093) are age 65 and older compared with 14% of non SMI adults (122,786). Seventy eight percent of SMI adults are White (197,634) and 21% are Black (54,417). The racial/ethnic distribution is similar to that of non SMI adults (i.e., 73% of non SMI adults are White and 25% of non SMI adults are Black). Approximately one third of individuals with SMI are identified in each Medicaid eligibility category. Thirty seven percent of SMI adults (93,506) are eligible under CFC; 31% (77,658) are eligible under CFC and 32% (82,454) are dual Medicare and Medicaid eligible (Duals). The majority of individuals with schizophrenia and psychosis are Duals, while the majority of individuals with substance use disorder, adjustment disorder, and anxiety are eligible under CFC. Medicaid expenditures are higher for individuals with ABD and Dual eligibility status than individuals with CFC eligibility status. On average ABD and Duals with SMI have annual Medicaid costs per person of approximately $180 00; CFC annual costs per person were $4,553. HEALTH MANAGEMENT ASSOCIATES 8

10 CO-OCCURRING CHRONIC PHYSICAL HEALTH CONDITIONS The rate of co-occurring chronic physical health conditions is higher among individuals with SMI, particularly among those with schizophrenia and psychosis. Adults with SMI experience a range of co occurring chronic physical health conditions. Thirty eight percent of SMI adults have arthritis compared with 23% of non SMI adults; 36% of SMI adults have hypertension compared with 25% of non SMI adults; 28% of SMI adults have chronic respiratory conditions compared with 17% of non SMI adults; 21% of SMI adults have heart disease compared with 15% of non SMI adults and 18% of SMI adults have diabetes compared with 13% of non SMI adults. Individuals with schizophrenia and psychosis have even higher rates of co-occurring chronic physical health conditions. Forty-eight percent have hypertension; 36% have arthritis; 30% have chronic respiratory conditions; 27% have heart disease and 26% have diabetes. Non SMI Adult SMI Adults Schizophrenia/Psychosis N % N % N % Hypertension 220,771 25% 91,813 36% 23,119 48% Chronic Respiratory 149,894 17% 71,848 28% 14,366 30% Diabetes 110,706 13% 45,639 18% 12,719 26% Arthritis 203,681 23% 95,555 38% 17,683 36% Heart Disease 135,350 15% 53,054 21% 13,120 27% Cerebrovascular 45,915 5% 17,548 7% 4,706 10% Obesity 47,294 5% 24,998 10% 5,477 11% Dental Disease 38,166 4% 19,270 8% 2,578 5% Liver Disease 15,037 2% 8,554 3% 1,749 4% There are some regional differences in co-occurring chronic physical health conditions among SMI adults. Hypertension and obesity are identified more frequently in Appalachian counties. Respiratory disease and arthritis are identified more frequently in Metropolitan counties. Chronic Respiratory Heart Disease Obesity Dental Arthritis Cirrhosis /Liver Cerebrovascular Region Hypertension Diabetes Appalachian 38.80% 27.60% 18.90% 21.60% 11.00% 6.50% 36.70% 3.80% 7.50% Metro 35.30% 29.60% 17.30% 21.00% 8.40% 7.90% 39.50% 3.20% 6.80% Rural 35.30% 28.60% 17.60% 20.80% 9.60% 8.40% 38.20% 3.10% 6.60% Suburban 32.40% 27.90% 17.20% 19.20% 8.80% 8.30% 36.90% 2.90% 6.40% Grand Total 36.20% 28.30% 18.00% 20.90% 9.80% 7.60% 37.70% 3.40% 6.90% HEALTH MANAGEMENT ASSOCIATES 9

11 CO-OCCURRING SUBSTANCE USE DISORDER The rate of co-occurring chronic physical health conditions is higher among individuals with SMI, particularly among those with schizophrenia and psychosis. Forty one percent of adults with SMI have co occurring substance used disorders. Adults with bipolar disorder or post traumatic stress disorder (PTSD), have even higher rates of SUD (46% and 41%, respectively). Of the SMI adults with co occurring SUD 66% were eligible under the CFC category, 22% were ABD and 11% were Duals. Finally, 64% of SMI adults with co occurring SUD received treatment for substance use only in the specialty behavioral health system, 23% were served in both the specialty and non specialty systems and 12% were served only in the non specialty system. Please note that the data are based on documentation of alcohol or substance abuse in claims records and are likely to underestimate the actual rate of substance use disorder. COST DRIVERS AMONG SMI ADULTS The major cost drivers for individuals with SMI include nursing facilities, inpatient hospitalizations, MR/DD Waiver services and prescription drugs. The average annual expenditures per person for SMI adults residing in skilled nursing facilities is $3,412 (for non SMI adults $2,178; for schizophrenia $6,849). Skilled nursing facility costs are the highest expenditure category. Annual inpatient hospitalization costs, the second highest expenditure category, are $1,969 for SMI adults ($1,212 for non SMI adults; $2,261 for individuals with schizophrenia). Service SMI Schizophrenia Non SMI Adult Skilled Nursing Facility $3,413 $6,849 $2,178 Inpatient Hospitalization $1,970 $2,262 $1,213 MR/DD waiver $1,513 $2,477 $763 Drug (net of Pharmacy rebate) $1,279 $1,817 $540 Physician Services $892 $734 $562 Mental Health Services $846 $2,372 $199 Outpatient Hospital General $825 $628 $515 ICF MR Private $548 $632 $407 ICF MR Public $314 $361 $288 Home Health Services $279 $525 $170 Core Services Waiver recipient $247 $205 $211 PASSPORT Waiver III $204 $168 $292 Supplies and Medical Equipment $184 $168 $133 Ohio Dept of Alc/Drug Addiction Services $162 $93 $540 Dental Services $133 $109 $92 HEALTH MANAGEMENT ASSOCIATES 10

12 During SFY 08-09, 7.5% of SMI adults versus 5.4% of non-smi adults resided in a skilled nursing facility. Among those living in nursing facilities, 42% of SMI adults versus 25% of non SMI adults were under age 65. Non SMI in Nursing Facilities SMI in Nursing Facilities Age N % N % 19 to 44 2,749 5% 1,499 8% 45 to 64 9,557 20% 6,477 34% 65 to Hi 35,177 74% 11,167 58% Total 47, % 19, % HOSPITALIZATIONS AND EMERGENCY DEPARTMENT UTILIZATION FOR AMBULATORY CARE SENSITIVE CONDITIONS Individuals with SMI have approximately twice the rate of hospitalization and emergency department (ED) visits for much ambulatory care sensitive (ACS) conditions. SMI adults have more than twice as many hospitalizations for certain ambulatory care sensitive conditions (asthma and diabetes) than non SMI adults and two times higher rates of emergency department visits for asthma than non SMI adults. Individuals with schizophrenia have three times more hospitalizations for uncontrolled diabetes and twice the number of hospitalizations for pneumonia and chest pains compared with non SMI adults; and twice the number of hospital emergency department visits for hypertension and uncontrolled diabetes than non SMI adults. Hospitalizations for ACSC per 1000 Persons Condition Non SMI SMI Schizophrenia Diabetes Perforated Appendix COPD Hypertension Congestive Heart Failure Dehydration Bacterial Pneumonia Urinary Tract Infection Angina without Procedure Asthma Diabetes related amputation Total with ACSC Total without ACSC Total Hospitalizations HEALTH MANAGEMENT ASSOCIATES 11

13 Emergency Department Visits for ACSC per 1000 Persons Conditions Non SMI SMI Schizophrenia Diabetes Perforated Appendix COPD Hypertension Congestive Heart Failure Dehydration Bacterial Pneumonia Urinary Tract Infection Angina without Procedure Asthma Total ER Visits with ACSC Total ER Visits without ACSC Total ER Visits SYSTEMS WHERE SMI ADULTS RECEIVE SERVICES Approximately 29% of SMI adults do not receive services in the specialty behavioral health system. There are different patterns of service system use across SMI conditions. Individuals with anxiety or other disorders were mostly serviced in the non specialty system; individuals with adjustment order or substance use disorder were mostly served in the specialty system; the majority of individuals with schizophrenia and bipolar disorder receive services from both systems. SMI Qualifying Non Specialty Only Specialty Only Both Condition N % N % N % Schizophrenia 5,814 15% 8,030 21% 25,177 65% Psychosis 4,503 48% 1,184 13% 3,799 40% Bipolar 9,636 18% 13,313 25% 29,598 56% PTSD % 2,704 44% 2,771 45% Depression 29,968 35% 25,869 30% 30,922 36% Adjustment 2,815 20% 8,096 56% 3,471 24% Anxiety 16,299 61% 4,089 15% 6,157 23% Substance Abuse / Alcoholism 2,103 12% 10,971 64% 4,000 23% Other 1,358 68% % 176 9% Total 29% 29% 42% HEALTH MANAGEMENT ASSOCIATES 12

14 SMI Qualifying Non Specialty Only Specialty Only Both 73,171 74, ,071 Medicaid expenditures are highest among SMI adults served in the non-specialty system. Individuals served in the non specialty system tend to be older, have more co morbid physical health conditions and are more likely to have CFC or Dual eligibility than eligibility through ABD criteria. No regional differences were found. SMI Qualifying Condition Schizophrenia Psychosis Bipolar PTSD Depression Adjustment Anxiety Non Specialty only Annual Cost per Person Specialty only Annual Cost per Person Both Annual Cost per Person $413,033,237 $35,521 $113,978,153 $7,097 $1,054,266,002 $20,262 $300,837,417 $33,404 $19,887,736 $8,399 $218,282,551 $28,411 $300,675,273 $15,602 $157,489,387 $5,915 $886,059,222 $12,791 $10,670,744 $7,904 $30,243,006 $5,592 $62,363,823 $8,397 $887,339,147 $14,805 $405,759,087 $7,843 $858,106,687 $12,398 $80,646,971 $14,325 $100,853,117 $6,229 $101,934,706 $9,854 $305,387,659 $9,368 $52,875,821 $6,466 $195,754,856 $10,435 Alcohol/SUD $45,168,333 $10,739 $94,972,068 $4,328 $65,760,512 $6,030 Other $74,285,005 $27,351 $8,401,441 $8,770 $4,454,736 $21,645 TOTAL $2,418,043,788 $16,52 3 $984,459,817 $6,586 $3,446,983,09 5 $13,484 PSYCHIATRIC CARE IN THE NON-SPECIALTY SYSTEM Adults with SMI who do not receive services in the specialty system are receiving most of their behavioral health services through primary care physicians, psychiatrists and other medical specialists. Individuals receiving diagnosis and treatment for behavioral health conditions in the non specialty system (as indicated by a primary diagnosis o SMI on the service claim) were serviced by the following provider types. Individuals Non Specialty Individuals Served in the Non Specialty System Only Served in Both the Specialty & Non Specialty System Provider N % N % Primary Care 33, % 44, % Providers Psychiatrist 21, % 36, % Other Medical 25, % 45, % Specialist Hospital 21, % 54, % FQHC 6, % 6, % Clinic 1, % 1, % HEALTH MANAGEMENT ASSOCIATES 13

15 Individuals Non Specialty Individuals Served in the Non Specialty System Only Served in Both the Specialty & Non Specialty System Provider N % N % Mental Health or % 4, % Substance Abuse Clinic Nurse Practitioner 2, % 2, % Psychologist 4, % 4, % Nursing Facility 5, % 3, % Home Health Agency % 2, % Among individuals receiving mental health diagnosis and treatment in the non specialty system, many have multiple providers assessing and treating their mental health condition. Number of Non Specialty Provider s Non Specialty Both N % N % 1 25, % 29, % 2 20, % 21, % 3 9, % 13, % 4 or more 10, % 30, % FORECASTING 2014 MEDICAID COSTS OF NEWLY ELIGIBLE SMI ADULTS By the time federal health reform is fully enacted in 2019, Ohio s Medicaid program is likely to face an increase of 174,423 adults with SMI at a total Medicaid cost of $5.7 billion. Beginning in 2014, many of Ohio s currently uninsured will be Medicaid eligible. Using findings from the most recent Ohio Family Health Survey, the Ohio Colleges of Medicine Government Resource Center estimates that, excluding dual eligibles, roughly 120,085 Medicaid eligible SMI adults will be age and 54,338 will be age 45 and older. Without controlling for eligibility lapses or mortality of the current 253,977 and applying the same proportion of SMI adults by qualifying condition and current Medicaid expenditures per person, HMA roughly estimates that by 2019 Medicaid eligible SMI adults could reach 428,400 with total Medicaid costs of $5.7 billion. Table 1 - Current SMI Adults and Spending SMI Qualifying % Number Avg. Annual % Expenditures/Person Condition Number Expenditures Expenditures Schizophrenia 39,021 15% $784,961,862 23% $20, HEALTH MANAGEMENT ASSOCIATES 14

16 SMI Qualifying % Number Avg. Annual % Expenditures/Person Condition Number Expenditures Expenditures Psychosis 9,486 4% $268,079,490 8% $28, Bipolar 52,547 21% $663,630,548 20% $12, PTSD 6,150 2% $50,688,779 1% $8, Depression 86,759 34% $1,062,375,477 31% $12, Adjustment 14,382 6% $139,939,463 4% $9, Anxiety 26,545 10% $273,823,715 8% $10, SUD 17,074 7% $100,163,660 3% $ 5, Other 2,013 1% $43,367,571 1% $21, Total SMI 253, % $3,387,030, % Table 2 - Rough Estimates of Newly Medicaid Eligible SMI Adults SMI Qualifying Expenditures % Number Condition Number Per Person Schizophrenia 26,798 $539,085,834 15% Psychosis 6,515 $184,108,124 4% Bipolar 36,088 $455,759,502 21% PTSD 4,224 $34,811,376 2% Depression 59,583 $729,604,326 34% Adjustment 9,877 $96,105,793 6% Anxiety 18,230 $188,053,067 10% SUD 11,726 $68,789,087 7% Other 1,382 $29,783,413 1% Total SMI 174,423 $2,326,100, % CONCLUSION The Ohio s newly enacted biennial Medicaid budget contains several provisions to address fragmentation of services for individuals with behavioral health conditions (i.e., finance and support of care coordination through health homes, elevating Medicaid behavioral health financing to the State, reinstating the pharmacy carve in to MCOs). The findings outlined in this report provide evidence of a true business case for an investment in integrated physical and behavioral health care. HEALTH MANAGEMENT ASSOCIATES 15

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