Elephants in the Living Room: The Top 10 Issues California County Mental Health Directors Ought to have on their Radar Screens

Transcription

1 Elephants in the Living Room: The Top 10 Issues California County Mental Health Directors Ought to have on their Radar Screens Mike Geiss and Dale Jarvis have been working with CIMH to support California s Counties to prepare for the healthcare reforms that will unfold in 2014 and, more important, to survive between now and This paper provides a brief introduction to their Top 10 list in order to seed your thinking on how CIMH can help you navigate through these challenging times. Their list includes: 1. What s Happening to Our Funding? (An Update on Structural Challenges to California County Funding) 2. Is the Governor s Budget Plan a New and Improved Approach to Supporting Counties? 3. Containing Healthcare Costs Can Counties be Part of the Solution? 4. The Integration of Primary Care, Mental Health and Substance Use Disorder (MH/SUD) Treatment is Much More Than a Ten-Word Phrase 5. Is it Really Possible to Use the 1115 Waiver as a Bridge to Healthcare Reform? 6. Leveraging the National Council s Provider Organization Readiness Tool The Devil is in the Details 7. Achieving Economies of Scale Through New Partnerships 8. Payment Reform How Do We Prepare for the Move from Paying for Volume to Paying for Value? 9. Workforce Expansion Will We Really Move from Famine to Feast in 2014? 10. Fraud and Abuse Does all this T Crossing and I Dotting Go Away Under Healthcare Reform? The Top 10 California MH/SU Elephants, Draft, February 8, 2011, Page 1

2 1. What s Happening to Our Funding? (An Update on Structural Challenges to California County Funding) Revenues for community mental health services in California are derived from four primary sources: Medi-Cal FFP, Realignment (sales taxes and vehicle license fees), the State General Fund, and the Mental Health Services Act. Medi-Cal FFP has increased in recent years as a result in the Federal Medical Assistance Percentage (FMAP) contained in the American Recovery and Reinvestment Act (ARRA). However, the increased FMAP as a result of ARRA is eliminated in FY11/12 which means it will cost counties approximately 25% more in local funding to provide the same level of service to Medi- Cal beneficiaries in FY11/12. Realignment used to be the primary source of revenue counties used as match for the Medi-Cal program. However, these revenues declined approximately $200 million (17%) since their peak in FY06/07. Because of the way in which the majority of growth funds go towards social services caseload growth costs, it is anticipated that community mental health services will not attain the same level of FY06/07 realignment funding for at least another seven to ten years. State General Fund (SGF) has declined in proportion to the increase in FMAP and, all else equal, would grow proportionate to the decrease in FMAP. However, California (like many states) is facing a severe, multi-year fiscal crisis that will most likely result in little or no SGF for community mental health services. Mental Health Services Act (MHSA) funding has been a bright spot in community mental health funding, adding approximately $1 billion per year in new funding. However, this additional funding came with significantly increased consumer and stakeholder expectations as well as fairly prescriptive program guidelines from the State. Also, the MHSA funding made available to counties lags the economy by two to three years so that this funding source will be approximately 30% to 40% lower in FY12/13 than it was in FY09/10. The elephant is whether counties can continue to fund and provide the same level of community mental health services given the increased expectations of the MHSA when funding has significantly declined. 2. Is the Governor s Budget Plan a New and Improved Approach to Supporting Counties? California has a significant budget shortfall that the governor has proposed to address by realigning additional programs to the counties (including all community mental health services formally funded through the SGF and Realignment). The realigned services include behavioral health services as well as many public safety services, and would be funded with a continuation of the sales tax and vehicle license fee increases. Also, as part of this realignment, the governor has proposed to use approximately $860 million of MHSA funding to cover various community mental health programs without specifically identifying where such MHSA funding would come from. All this appears to hinge on the governor s ability to obtain a 2/3 majority vote in the legislature to put an initiative to continue the tax increases on a June ballot and a subsequent passage by voters of such an initiative. In the meantime, counties are The Top 10 California MH/SU Elephants, Draft, February 8, 2011, Page 2

3 preparing their FY11/12 MHSA plans as well as developing county budgets. The elephant is whether counties can even think about healthcare reform when they don t even know what their funding (and related programs) will look like in FY11/ Containing Healthcare Costs Can Counties be Part of the Solution? The healthcare system in this country is too expensive because what we have is a sick care system, rather than a true health care system. Under the current system most money begins flowing after people become sick. 75% of all health spending is for addressing the consequences of chronic health conditions. Currently, very little money is available for prevention, primary care, management of chronic health conditions, and mental health and substance use treatment. This system is unsustainable and businesses and governments are unable and unwilling to continue supporting what has been described as a dysfunctional mess of a healthcare system. Regardless of what happens in Congress between now and 2014 when Federal healthcare reform fully kicks in, states, employers and the federal government are going to be radically changing the current system from one that pays for volume to one that pays for value. This will impact every corner of the healthcare system including all 58 California Counties. The elephant is whether California Counties are willing and able to take proactive action to help become part of the solution. The future healthcare system will not look like the present system; how many leaders responsible for managing health, mental health and substance use disorders understand this and are prepared to internally disrupt how they do business in order to improve quality and bend the cost curve? 4. The Integration of Primary Care, Mental Health and Substance Use Disorder (MH/SUD) Treatment is Much More Than a Ten-Word Phrase. For healthcare reform to succeed, the body needs to be connected to the head in three ways through clinical, financial, and structural integration. Clinical integration involved co-location of providers and significant changes in clinical workflows so that team-based care includes health, mental health and substance use disorder treatment clinicians. Financial integration involves virtual or physical blending of funding to ensure that sufficient funds are available for primary care and MH/SUD treatment. In the same way that health planners acknowledge that we need to double the budget of primary care in the U.S., we are going to need similar increases for what is now a dramatically underfunded public MH/SUD treatment system. Many believe that it will be difficult to adequately fund clinically integrated MH/SUD without some form of financial integration. Structural integration involves the virtual or physical merging of health, mental health and substance use disorder treatment organizations in order to support clinical and financial integration. The elephant is whether California Counties will be able to work within the existing governing framework to achieve all three types of integration. The Top 10 California MH/SU Elephants, Draft, February 8, 2011, Page 3

4 5. Is it Really Possible to Use the 1115 Waiver as a Bridge to Healthcare Reform? Currently each county is evaluating whether it should participate in the 1115 Waiver Low Income Health Program (LIHP) before Counties have to decide whether they can afford to take this leap and then structure their LIHP as a tool to help them prepare for 2014 when there will be a 20% to 40% increase in Medi-Cal enrollees and MH/SUD benefits will be at parity. Counties that decide they cannot afford to participate in the Coverage Initiative need to also begin their preparation efforts ASAP so they are not caught unprepared in January The 1115 Waiver s Special Terms and Conditions also contains the following homework assignments that applies to all 58 Counties: Behavioral Health Services Assessment - By March 1, 2012, the State will submit to CMS for approval an assessment that shall include information on available mental health and substance use service delivery infrastructure, information system infrastructure/capacity, provider capacity, utilization patterns and requirements (i.e., prior authorization), current levels of behavioral health and physical health integration and other information necessary to determine the current state of behavioral service delivery in California. Behavioral Health Services Plan - By October 1, 2012, the State will submit to CMS for approval a detailed plan, including how the State will coordinate with the Department of Mental Health and Alcohol and Drug Programs outlining the steps and infrastructure necessary to meet requirements of a benchmark plan no later than The elephant is whether counties have the time, resources, and bandwidth to prepare for Leveraging the National Council s Provider Organization Readiness Tool The Devil is in the Details. We have identified twenty-one items in five areas that MH/SUD providers need to consider as they prepare for healthcare reform. Area I: Leadership and Relationship Building Area II: High Performing Provider Access and Outcomes Area III: Person Centered Healthcare Home Participation Area IV: Business Infrastructure Measure and Get Paid Area V: Consumer Advocacy Helping Consumers Obtain Coverage and Services All Counties will need to assess their readiness, identify gaps, prioritize change projects, and get to work ASAP on the high importance/low readiness items. For example, item 1 in the Business Infrastructure section notes that a Minimum IT Staffing Requirement that includes: Help Desk available during hours staff are using the system Hardware and Network Technicians to maintain servers, security, user devices (desktops, laptops, handheld devices), and local area and wide area networks The Top 10 California MH/SU Elephants, Draft, February 8, 2011, Page 4

5 Application Support Specialist(s) that train and support users on the software Decision Support Unit that is responsible for data warehouse/mart administration, report design and development, and report production Like elephant #5 above, the key question is whether counties have the time, resources, and bandwidth to prepare for Achieving Economies of Scale Through New Partnerships: I predict that there will continue to be solo and small group physician practices in the U.S. as healthcare reform unfolds, but they will be well integrated into the fabric of a larger healthcare system through Accountable Care Organizations and Integrated Health Systems. Many of California s Counties are similarly too small to succeed on their own in this new healthcare ecosystem. Smaller counties are going to have to find new ways to achieve economies of scale to manage quality, cost and the risk that states will be pushing down as they move the Medi- Cal seniors and persons with disabilities (SPD) into and everyone in the health insurance exchanges managed care. I also predict that the days of smallish Counties that can manage health and MH/SUD quality, cost and risk are numbered. The elephant is whether Counties will be able to navigate through the political waters to partner with ACOs and/or other Counties to succeed in the new ecosystem. 8. Payment Reform How Do We Prepare for the Move from Paying for Volume to Paying for Value? How healthcare and MH/SUD providers are paid will be changing under healthcare reform. The Short-Doyle Fee for Service model s days are numbered and will be replaced with new payment models that shift from paying for volume to paying for value. Counties have two roles in this arena which has been labeled Value-Based Purchasing: As healthcare payors, they will need to design and implement the new payment models for contracted and county-provided services. As providers of care, Counties will need to learn how to operate under these new models that place an emphasis on quality and outcomes over quantity. These models will include case rates and population-based subcapitation with a pay for performance bonus layer. The elephant is whether Counties have the technical expertise to move to these new payment models as payors and to succeed under these models as providers. 9. Workforce Expansion Will We Really Move from Famine to Feast in 2014? We have estimated that over 50,000 full time clinicians will be needed the U.S. to meet the mental health needs of uninsured persons moving into Medicaid in We have not yet computed the increased demand for substance use treatment clinicians, which will be The Top 10 California MH/SU Elephants, Draft, February 8, 2011, Page 5

6 substantial. California Counties will need to assess this increased demand (see the 1115 Waiver s Special Terms and Conditions) and begin developing a Workforce Expansion Plan that will help local delivery systems anticipate the changes that are coming and prepare to serve the newly covered expansion population. Although it doesn t seem possible, substantially more money will be available to pay for these clinicians, starting with the Low Income Health Program, and ramping up dramatically in 2014 and MH/SUD services will be required to be provided at parity. A related workforce issue is the aging of the Director group and whether sufficient succession planning is taking place to ensure that we are preparing the next generation of leaders to have a fighting chance as they navigate through this sea of change. At first blush, workforce expansion and money to pay for it doesn t appear to have any elephants but we re not blushing as we think more about it. 10. Fraud and Abuse Does All This T Crossing and I Dotting Go Away Under Healthcare Reform? We thought we d end the list on an up note. If you ve read any newspapers lately you will see that a portion of healthcare reform is being funded through dramatically stepped up fraud and abuse efforts by the Federal government and much of the recoupment will come from errors of omission rather than errors of co-mission. Think of previous federal audits and integrity agreements on steroids. Also note that the only place that community mental health centers were mentioned in the January, 2010 Healthcare Reform Reconciliation Bill (passed by Congress to complete the healthcare reform legislation) was in Subtitle D Reducing Fraud, Waste, and Abuse where the Congressional Budget Office projected $600 million of savings from community mental health center recoupment between FY2012 and FY2019. Counties will need a much more robust compliance plan that meets new Federal regulations and be well versed in the regulation and guidance in the Federal False Claims Act, Health Insurance Portability and Accountability Act of 1996, Balanced Budget Act of 1997, Sarbanes-Oxley Act, Deficit Reduction Act, and DHHS OIG Regulation. The elephant is, where will the money and staff come from to support these efforts. A Final Note When we were working on this list, we started feeling overwhelmed and somewhat discouraged. Then we realized that, no, contemplating these 10 elephants is actually a wonderful antidote to boredom. A recent Career Couch column in the New York Times expressed this quite nicely. Question: When you get up in the morning, you never want to go to work. Your job is repetitive, uninteresting and offers no challenges. When you are there, the clock barely moves, and you can t wait to leave. In short, you are bored. What is to be done? Mike and Dale s Answer: Begin preparing for healthcare reform! The Top 10 California MH/SU Elephants, Draft, February 8, 2011, Page 6