ACA & MHPAEA: Drug Medi-Cal

1. ACA & MHPAEA:Drug Medi-Cal CADPAAC May 30, 2013 Patrick Gauthier, Director

2. Cms on mhpaea in medicaid 2009

3. Center for Medicaid and State Operations: Letter to State Directors SHO 09-014 CHIPRA #9 November 4, 2009 Dear State Health Official: The purpose of this letter is to provide general guidance on implementation of section 502 of the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), Public Law 111-3, which imposes mental health and substance use disorder parity requirements on all Children’s Health Insurance Program (CHIP) State plans under title XXI of the Social Security Act (the Act). This letter also provides preliminary guidance to the extent that mental health and substance use disorder parity requirements apply to State Medicaid programs under title XIX of the Act.

4. Center for Medicaid and State Operations: Letter to State Directors MHPAEA expanded the application of the existing mental health parity requirements in section 2705 to substance use disorder benefits, and added new requirements such as: • Financial requirements (e.g., co-payments) that are applied to mental health or substance use disorder benefits must be no more restrictive than the predominant financial requirements that are applied to substantially all medical/surgical benefits. • Treatment limitations (e.g., numbers of visits or days of coverage) that are applied to mental health or substance use disorder benefits must be no more restrictive than the predominant treatment limitations that are applied to substantially all medical/surgical benefits. • No separate financial requirements or treatment limitations can apply only to mental health or substance use disorder benefits. • When out-of-network coverage is available for medical/surgical benefits, it also must be available for mental health or substance use disorder benefits.

5. Center for Medicaid and State Operations: Letter to State Directors Application to Medicaid The MHPAEA requirements apply to Medicaid only insofar as a State’s Medicaid agency contracts with one or more managed care organizations (MCOs) or Prepaid Inpatient Health Plans (PIHPs), to provide medical/surgical benefits as well as mental health or substance use disorder benefits. In this case, those MCOs or PIHPs must meet the parity requirements of MHPAEA, as incorporated by reference in title XIX of the Act, for contract years beginning after October 3, 2009. MHPAEA parity requirements do not apply to the Medicaid State plan if a State does not use MCOs or PIHPs to provide these benefits.

6. Center for Medicaid and State Operations: Letter to State Directors Additional policy guidance will be provided on this issue after the MHPAEA regulation is published. However, in the meantime, we encourage all States to begin a dialogue with their Centers for Medicare & Medicaid Services regional office concerning their timeline for complying with these parity requirements. If you have any questions on the information provided in this letter, please send an email to CMSOCHIPRAQuestions@cms.hhs.gov or contact Ms. Maria Reed, Deputy Director, Family and Children’s Health Programs Group, at 410-786-5647. Sincerely, /s/ Cindy Mann Director

7. Cms on mhpaea 2013

8. CMS on MHPAEA: 2013 Letter January 16, 2013 RE: Application of the Mental Health Parity and Addiction Equity Act to Medicaid MCOs, CHIP, and Alternative Benefit (Benchmark) Plans Dear State Health Official: Dear State Medicaid Director: This letter provides guidance on the applicability of the requirements under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA, Pub.L. 110-343)1, 2 to Medicaid non-managed care benchmark and benchmark-equivalent plans (referred to in this letter as Medicaid Alternative Benefit plans) as described in section 1937 of the Social Security Act (the Act), the Children’s Health Insurance Programs (CHIP) under title XXI of the Act, and Medicaid managed care programs as described in section 1932 of the Act. The Centers for Medicare & Medicaid Services (CMS) previously issued a State Health Official (SHO) letter on November 4, 2009, concerning section 502 of the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA, Pub.L. 111-3)3. This letter issues new guidance on the application of MHPAEA in Medicaid and expands upon the guidance for CHIP.

9. MHPAEA extended the MHPA requirements to substance use disorder benefits in addition to mental health benefits. MHPAEA also added new requirements regarding financial requirements and treatment limitations in addition to the limitations on aggregate annual and lifetime dollar limits. The Affordable Care Act (Pub.L. 111-148) expanded the application of MHPAEA to benefits in Medicaid non-managed care benchmark and benchmark-equivalent state plan benefits pursuant to section 1937 of the Act (referred to in this letter as Medicaid Alternative Benefit plans) (see section 2001(c)(3) of the Affordable Care Act, adding section 1937(b)(6)). The application of MHPAEA to Medicaid non-managed care Alternative Benefit plan benefits was effective on March 23, 2010. Also effective as of that date, Medicaid Alternative Benefit plans that are benchmark-equivalent plans must include mental health and substance abuse services as a basic service (see section 2001(c) of the Affordable Care Act).

10. Application of Mental Health/Substance Use Disorder Parity Requirements to Medicaid Alternative Benefit Plans • All Medicaid Alternative Benefit plans (including benchmark equivalent and Secretary–approved benchmark plans) are required to meet the provisions within MHPAEA, regardless of whether services are delivered in managed care or non-managed care arrangements. This includes Alternative Benefit plans for individuals in the new low-income Medicaid expansion group, effective January 1, 2014. Specifically: • Section 1932(b)(8) of the Act applies parity requirements to MCOs. • Section 1937(b)(6) of the Act, as added by the Affordable Care Act, directs that approved section 1937 Medicaid non-managed care Alternative Benefit plans that provide both medical/surgical benefits and mental health or substance use disorder benefits comply with MHPAEA.

11. Application of Mental Health/Substance Use Disorder Parity Requirements to Managed Care Organizations The CMS noted in its November 2009 SHO letter that mental health and substance use disorder parity requirements apply to MCOs (defined in section 1903(m) of the Act) that contract with the state to provide both medical/ surgical and mental health or substance use disorder benefits. In light of Medicaid regulations that direct states to reimburse MCOs based only on state plan services, CMS will not find MCOs out of compliance with MHPAEA to the extent that the benefits offered by the MCO reflect the financial limitations, quantitative treatment limitations, non-quantitative treatment limitations, and disclosure requirements set forth in the Medicaid state plan and as specified in CMS approved contracts. However, this does not preclude state use of current Medicaid flexibilities to amend their Medicaid state plans or demonstrations/waiver projects to address financial limitations, quantitative treatment limitations, non-quantitative treatment limitations, and disclosure requirements in ways that promote parity.

12. In addition to MCOs, which are statutorily-defined, CMS has, by regulation, recognized entities known as Prepaid Inpatient Hospital Plans (PIHPs) and Prepaid Ambulatory Health Plans (PAHPs). These entities provide a more limited set of state plan services (in some instances through a carve-out arrangement). CMS urges states with these arrangements to apply the principles of parity across the whole Medicaid managed care delivery system when mental health and substance use disorders services are offered through a carve-out arrangement.CMS intends to issue additional guidance that will address this issue and will continue to consider additional regulatory changes that may be necessary to properly implement MHPAEA. MCOs that are not in compliance with the parity requirements described above should take steps to come into compliance with those requirements. States should assess their contracts with all MCOs which offer medical and surgical benefits and mental health or substance use disorder benefits to assure that plans comply with the provisions of MHPAEA. CMS will offer technical assistance to states regarding strategies for PIHPs and PAHPs to implement MHPAEA.

13. CMS On alternative benefit plans November 2012

14. CMS on Alternative Benefit Plans SMDL # 12-003 ACA # 21 RE: Essential Health Benefits in the Medicaid Program November 20, 2012 Dear State Medicaid Director: The purpose of this letter is to provide guidance to states on Medicaid benchmark benefit coverage options (hereafter referred to as “Alternative Benefit Plans”) under section 1937 of the Social Security Act. Under the Affordable Care Act, states will rely on the benefit options available under section 1937 as they expand eligibility to low-income adults beginning January 1, 2014. This letter provides guidance on the use of Alternative Benefit Plans for the new eligibility group for low-income adults; the relationship between Alternative Benefit Plans and Essential Health Benefits (EHBs); and the relationship of section 1937 with other Title XIX provisions.

15. CMS on Alternative Benefit Plans The Affordable Care Act made a number of changes related to section 1937 that are effective on January 1, 2014. These changes include: • Any Alternative Benefit Plan must cover EHBs as described in section 1302(b) of the Affordable Care Act and applicable regulations; o EHBs include the following ten benefit categories, recognizing that some of the benefit categories include more than one type of benefit: (1) ambulatory patient services, (2) emergency services, (3) hospitalization, (4) maternity and newborn care, (5) mental health and substance use disorder services, including behavioral health treatment,(6) prescription drugs, (7) rehabilitative and habilitative services and devices, (8) laboratory services, (9) preventive and wellness services and chronic disease management, and (10) pediatric services, including oral and vision care. • The Mental Health Parity and Addiction Equity Act (MHPAEA) applies to Alternative Benefit.

16. Dhcs drug medi-cal

17. CA DHCS on Medi-Cal MH and SA Drug Medi-Cal Today Counties provide or contract with providers to deliver the Drug Medi-Cal benefit to Medi-Cal beneficiaries. In cases where counties have decided not to provide all or part of the benefit, the Department of Health Care Services (DHCS) instead contracts directly with providers in the county, and is reimbursed by the county for the non-federal share. Any medication treatments for alcohol or drug dependence not provided through the Drug Medi-Cal formulary are provided through Medi-Cal fee-for-service. Counties use 2011 Realignment funds to fund the non-federal share. The current Drug Medi-Cal program has five benefits; however, the general adult population is limited to three benefits, which are generally exclusive: methadone maintenance, naltrexone for opioid dependence, and outpatient drug-free services. Counties will use their existing resources to continue providing Drug Medi-Cal services to the currently eligible Medi-Cal population. Drug Medi-Cal will continue to operate with the current benefit and delivery system for the expansion population. The estimated costs associated with providing the current benefit to the expansion population are $42 million by 2020, of which the 10 percent non-federal share will be $4.2 million.

18. CA DHCS on Medi-Cal MH and SA Enhanced Substance Use Disorder Benefit Counties could opt-in to provide a standard enhanced substance use disorder benefit package through the Drug Medi-Cal program for both the currently eligible and expansion populations. If the counties opt-in, they would agree to pay for the non-federal share of these benefits. Specific funding would be made available to counties as an incentive to opt-in and the estimated cost would vary based on the specific benefits included in the enhanced Drug Medi-Cal benefit package.

19. CA DHCS on Medi-Cal MH and SA Based on the previously received recommendations for enhanced benefits from the counties and substance use disorder treatment providers, DHCS is specifically considering these potential enhanced benefits: • Intensive Outpatient Treatment: Currently a Drug Medi-Cal benefit, but limited to pregnant and postpartum women and children and youth under the age of 21. Historically referred to as “Day Care Rehabilitation.” This could be opened up for the general adult population.

20. CA DHCS on Medi-Cal MH and SA • Residential Substance Use Disorder Services: Currently a Drug Medi-Cal benefit, but limited to pregnant and postpartum women. This could be opened up for the general adult population. • Recovery Supports: These are a broad set of longer term care management services to support the ongoing sobriety of the client and prevent relapse, with a flexible service intensity level depending upon the needs of the client. Services may include engagement, self- management supports, and counseling. Recovery support has been added to four state Medicaid plans (AZ, NM, PA, IA) as of 2010 through the Rehabilitation Option. Currently, Medi-Cal provides the Rehabilitation Option for eligible mental health clients through Medi-Cal specialty mental health. • Opioid Detoxification: Currently a Medi-Cal benefit through fee-for-service, outside of Drug Medi-Cal, but with a time limitation of 21 days. This could be allowed, in addition, through Drug Medi-Cal for a longer time period of up to 6 months, which is the maximum allowed by federal regulation. • Alcohol Detoxification: This could be made available as an elective benefit in outpatient settings.

21. CA DHCS on Medi-Cal MH and SA Drug Medi-Cal Delivery System Waiver With a greater population of beneficiaries because of the expansion population and additional service options through an enhanced benefit, an organized delivery system could better help direct beneficiaries to the most appropriate Drug Medi-Cal benefits. Counties need the tools to effectively manage the Drug Medi-Cal program. Counties should manage these programs through an organized delivery system under a waiver of federal Medicaid law, in place within three years.

22. California Mental Health and Substance Use Needs Assessment Submitted to The California Department of Health Care Services Prepared by TAC/HSRI, 2012

23. California Mental Health and Substance Use Needs Assessment (Page 291) 2. Needs and gaps in the current system The California behavioral health system has many strengths, and these strengths form a solid foundation for implementing system enhancements and improvements in the future. As has been described throughout this report, there are also a number of gaps and issues with regard to the system that need addressing. It must be noted that California’s behavioral health system has experienced serious budget cuts and service restrictions over the past few years. These occurred in the context of a behavioral health system that was already stretched for resources. In addition, the realignment policy had placed additional responsibilities at the county level, and it is not clear that the amount of funds available to be “realigned” is sufficient to meet these responsibilities.As with most states, the substance use services system in California is the most severely underfunded, even when compared to mental health services. The very low penetrations rates for substance use services in both Medi-Cal and DADP services is testament to this fact.

24. opportunities

25. Issues • Reducing ED admissions and re-admissions • Medicaid managed care • Managed care business operations and infrastructure • Competition • Prescription drug abuse • Financial risk • Licensure and credentialing

26. Issues • “Diabesity” epidemic • Whole health, person-centered care • Medication assisted treatment • Integration(vertical) and Consolidation (horizontal) • Carve-in • Retail healthcare • Health Coaches • Continued de-institutionalization • eHealth / mHealth

27. International Comparison of Spending on Health, 1980–2010 Average spending on healthper capita ($US PPP) Total health expenditures aspercent of GDP Notes: PPP = purchasing power parity; GDP = gross domestic product. Source: Commonwealth Fund, based on OECD Health Data 2012.

28. Health Care Costs Concentrated in Sick Few—Sickest 10 Percent Account for 65 Percent of Expenses 1% 5% 22% $90,061 10% 50% $40,682 65% 50% $26,767 97% $7,978 Distribution of health expenditures for the U.S. population, by magnitude of expenditure, 2009 Annual mean expenditure Source: Agency for Healthcare Research and Quality analysis of 2009 Medical Expenditure Panel Survey.

29. Problem: Causes of Premature Death in the General Population N Engl J Med. 2007 Sep 20;357(12):1221-8.

30. Health Care reform Brief Impact Statement

31. Reform • Coverage expansion • New models • ACOs and integrated delivery systems • Health Care (Medical) Homes & Dual Eligibles Initiatives • New administrative structure • Essential Health Benefits (benchmark plans) • Health Insurance Exchanges • New risk-based financing mechanisms Medicaid managed care and capitation

32. Coverage Expansions Below 133% FPL ($29,500 family) 133 – 400% FPL ($88,000 family) State Exchanges Coverage for essential MH/SA at parity & prevention @ no co-pays Helps individuals and small employers with purchasing health insurance Assist by voucher to pay premiums or cost sharing Develops consumer friendly tools & plain language on insurance One application to both exchanges or Medicaid; can do on the web Medicaid Expansion To Childless Adults • Coverage for essential MH/SA at parity for benchmark plan • Feds pay 100% for 3 years, then down 90% • Simplified enrollment, express apps: web too • Integrated data with State exchanges: one application • Foster kids up to age 26

33. California by the Numbers

34. California

35. California FQHCs • 118 Federally-Qualified Health Centers Statewide • 1,039 FQHC Service Sites • www.statehealthfacts.org

36. Prevalence of Substance Use Disorders Among Adults Ages 18 – 64 by Current Medicaid Status and Eligibility for Medicaid Expansion or Health Insurance Exchanges: California, US

37. SUD in CA Medicaid Expansion and Health Insurance Marketplace • Most common characteristics of persons with SUD in Medicaid expansion population in California is: • Male • 18-34 years old • Non-Hispanic White or Hispanic • Less than High School Education Sources: 2008 – 2010 National Survey on Drug Use and Health (Revised March 2012) 2010 American Community Survey

38. Organized and integrated systems of care ACOs and Medical/Health Homes

39. Organized Systems of Care • Integrated MH and SUD • Integrated Behavioral Health and Primary Care • Integration with FQHCs • Accountable Care Organizations • Medicaid Health Home Models • Patient Centered Medical Home Models

40. ACO • Promote evidence-based medicine and engagement in care • Report quality measures to CMS • Invest continually in the workforce and in team-based care • Publicly report 33 measures of performance and quality • Link quality and financial performance and set a high bar on delivering coordinated and patient-centered care, and emphasize the Triple Aim • Enhance patient experience of care • Improve health of populations • Reduce or control the per capita cost of care

41. Triple Aim • 1. Improve the health of the population • Increase the number of people served • Address health disparities for individuals with mental illness and/or substance use disorders • 2. Enhance the patient experience of care • Move to community-based services • Reduce unnecessary stays in hospitals and licensed residential settings • Increase access to primary care services • 3. Reduce, or control, the per capita cost of care • Use existing resources more effectively • Promote recovery and resiliency • Decrease emergency department utilization • Focus on early assessment, intervention and supports

42. Core Capabilities • Clinical pathways • Care coordinators and navigators • Medical Home model • Preference for certified EHR, certified Meaningful Use capabilities, and health information exchange (HIE)

43. ACO Structure, Governance and Shared Savings IT Infrastructure and Data Management Long-Term Care Home Care & Hospice Public Health Hospital & Rehab Population Health Home Rx & Lab Surgical & Specialty Primary Care Substance Use Disorder Mental Health

44. California & ACOs • CMS has approved 400+ ACOs nationwide. • Include a range of providers and sizes; about half are physician-led organizations that serve fewer than 10,000 beneficiaries. • One-fifth include rural health centers, community health centers, and critical access hospitals, which serve rural and low-income communities. • Nearly 30 ACOs in CA

45. Sampling of Golden State ACOs • Brown & Toland Physicians, based in San Francisco; • HealthCare Partners Medical Group, which serves Los Angeles and Orange counties; • Heritage California ACO, which serves southern, central and coastal California; • Monarch HealthCare, based in Orange County; • PrimeCare Medical Network, which serves Riverside and San Bernardino counties; • Sharp HealthCare System, based in San Diego • ApolloMed Accountable Care Organization in Glendale; • Golden Life Healthcare in Sacramento; • John Muir Physician Network in Walnut Creek; • Meridian Holdings in Hawthorne; • North Coast Medical ACO in Oceanside; and • Torrance Memorial Integrated Physicians • UCLA ACO • Cedars Sinai ACO • Hill Physicians/Dignity Health, serving Sacramento • Palo Alto Medical Foundation • Santa Clara County IPA • St. Joseph Health

46. Golden State ACOs

47. Golden State ACOs

48. Golden State ACOs

49. Population Health Management • ACOs must develop a process for identifying patients who have complex needs (multiple chronic conditions) or are at high risk of developing such needs and provide them with wellness and prevention programs, disease management, and complex case management, as indicated • ACOs make available or support providers’ use of electronic prescribing, electronic health records systems, registries, and self-management tools

50. Integration Patient Value defined here (health/cost) Managing Knowledge (training, process improvement, etc) Informing & Educating (patient and family education) Measuring and Monitoring (testing, records, etc) Assuring Access to Services (continuum of care, hotline, transport) Assess-ment Diagnosis History Testing Consult Preparing Counseling Interviews Teaming Intervening Orders Procedures Counseling Therapy Prevention Risk Factors Screening Monitoring Monitoring & Managing Compliance Lifestyle Recovery & Rehab Fine tuning Discharge planning Provider Margins made here Feedback Loops Source: M. Porter and E. Olmstead Teisberg