Washington Update

1. Washington Update Chuck Ingoglia, MSW Vice President, Public Policy National Council for Community Behavioral Healthcare ChuckI@thenationalcouncil.org

2. Serve and lead… Represent over 1700 community organizations that provide safety-net mental health and substance abuse treatment services to nearly six million adults, children and families. National voice for legislation, regulations, policies and practices that protect and expand access to effective mental health and addictions services.

3. Membership 1971–2009

4. Engagement… Public Policy Update and Alerts National Council Magazine Technical Assistance Newsletter Addictions/Co-occurring Newsletter Journal of Behavioral Health Services & Research Webinars Print Media and social media – online communities, blogging, and tweeting Awards of Excellence

5. Engagement…. • Criminal justice Leadership • International Initiatives • Middle Management Academy; Psychiatric Leadership Project; CEO University • Healthcare Collaborative/Learning Communities • Access and Retention Initiatives; Six Sigma; Benchmarking • Transition Age Youth Project • Mental Health First Aid

6. Indiana Advocacy • Action Alert Subscribers in IN: 397 • 207 National Council Members (52%) • 190 Nonmembers (48%) • From Mar. 2008 – Mar. 2010: • 475 messages sent to Congress from IN activists through our Action Alert system (by 152 individual activists) • Of those 152 activists, 29 were National Council members • In 2010 so far: • 275 messages sent by 154 activists • IN ranks 6th among all states in responses to Action Alerts

7. FMAP Extension • ARRA included an increase in the FMAP to help states with the financial crisis • This increase will expire on Dec. 31, 2010 unless it is extended • Both House & Senate have voted in support of an extension, but both chambers must vote again on a reconciled bill • May happen before Memorial Day • Dear Colleague Letter is being circulated in the House

8. Health Information Technology • ARRA included over $19B in grants and Medicare and Medicaid incentive payments to encourage the use of EHRs • Only MDs and NPs practicing within CBHOs would be eligible for the incentive payments

9. HIT Extension for Behavioral Health Services Act (HR 5040) • Introduced in the House on April 15 • Would make psychiatric hospitals, behavioral and mental health treatment facilities, and substance abuse treatment facilities eligible for facility payments • Would add psychologists and social workers to the list of eligible professionals

10. Healthcare Reform and the Behavioral Health Safety Net Overview We are on the cusp of the second (and most significant) wave of public behavioral health change in the last 25 years.

11. End Result of Reform Most public MH system-eligible individuals will have coverage under Medicaid and private insurance States and providers will need to expand capacity considerably to meet demand For IP and basic OP, individuals might choose to go outside public system How to coordinate care when they need additional services may become an issue

12. Not a Moment Too Soon...

13. Some Danger Going Forward SSAs & SMHAs will need to hold on to current funding as legislatures may see opportunity to withdraw funds Federal advocates will have to ensure SAMHSA funds are similarly maintained

14. Where Does the Safety Net for SUDs/MH Svs Fit into the Equation — Hypothesis 1 • Due to greater understanding of how manyAmericans suffer from mental health and substance use disorders and how expensive the total healthcare expenditures are for this group... • We have reached a tipping point in understanding the importance of treating the healthcare needs of these individuals • Which are creating a set of exciting opportunities for the Community Behavioral Healthcare Organizations in the U.S.

15. Where Does the Safety Net for SUDs/MH Svs Fit into the Equation — Hypothesis 2 • Due to greater understanding of how manyAmericans suffer from mental health and substance use disorders and how expensive the total healthcare expenditures are for this group... • We have reached a tipping point in understanding the importance of treating the healthcare needs of persons these individuals • Which are creating a set of unprecedented threats for the Community Behavioral Healthcare Organizations in the U.S.

16. Healthcare Reform: Root Cause Analysis • Wrong incentives and many disincentives that lead to: • Lack of Access due to 48 million citizens without insurance and resource misallocation • Overuse of unnecessary, high cost tests and procedures • Underuse of prevention, early intervention primary care and behavioral health services • Medical errors due to poor coordination among providers, poor communication with patients, and more.. • As much as 30 percent of health care costs (over $700 billion per year) could be eliminated without reducing quality

17. National Healthcare Reform: Four Key Strategies

18. Coverage Expansion • Requires most individuals to have coverage • Provides credits & subsidies up to 400% Poverty • Employer coverage requirements (>50 employees) • Small business tax credits • Private insurance policy costs include $1,000 per year of uncompensated care • Creates State Health Insurance Exchanges • Expands Medicaid

19. Medicaid Reforms

20. Medicaid Reforms: Long Term Care Services and Supports • Community First Choice Option • -New state plan option through which states can offer community-based attendant services and supports to provide an expansive array of services to assist beneficiaries with incomes under 150% of poverty who would otherwise require an institutional level of care. • 1915(i) State Option for Home and Community Based Services • -Raises Income Level for Eligibility -Repeals Enrollment Cap Provision • -Expands Range of Services -Allows for Target Populations • -Permits Extension of Full Medicaid to HCBS eligible individuals • Money Follows the Person Rebalancing Demonstration • -Extended through 2016 • -Additional $2.25 billion allocated for the extension

21. Health Care Homes Medicaid Reforms Dual Eligibles Creates Office of Coordination for Dual Eligible Beneficiaries to align Medicare /Medicaid policies, integrate benefits, improve continuity of care, and enhance coordination of Federal and State governments. Makes Rx co-pays for community living dual eligibles equal to those residing in long-term care facilities. New Medicaid state plan option encourages greater coordination of and collaborative care by allowing Medicaid beneficiaries with or at risk of two or more chronic conditions to designate a “health home,” including CMHCs. Includes $25 million for planning grants made available to states for the planning and development of the state plan amendment. Quality Demonstrations of Interest Maternal and Child Health • Medicaid Emergency Psychiatric Care Demo • 3 year, $75,000,000 demo to fund 8 states to reimburse non-governmental freestanding psychiatric hospitals for emergency psychiatric stabilization for beneficiaries aged 21 to 65 • Early Childhood Home Visitation Program • Post-partum Depression Research and Support

22. Medicare Reforms

23. CHIP Reforms

26. Unmet Mental Health Needs in the US Source: Unmet Mental Healthcare Needs in the Health and Behavioral Healthcare Safety Net

27. Coverage Expansion – Parity Legislation • Law: Mental Health and Substance Use Services must be provided at parity with general healthcare services (no discrimination) • Large Employers (Parity Act) • Medicaid (Parity Act & Reform Legislation) • Health Insurance Exchanges for Individual and Small Group Policies (Health Reform Legislation) • Medicare: more to do (Medicare Improvements Act – MIPPA) • The controversial question is whether insurance companies will provide adequate“scope of services” for persons with SMI/SED

28. Coverage Expansion: Most Members of the Safety Net Will Have Coverage Including SUDs & MH • $15 to $23 billion in added spending for MH/SU from insurance expansion • No credible info yet on $ impact of Parity Act • 15 Million increase in Medicaid enrollees (43%) • 16 Million increase in Privately Insured

29. Medicaid Implementation Timeline

30. Insurance Reform • Requires guaranteed issue and renewal • Prohibits all annual and lifetime limits • Bans pre-existing condition exclusions • Create an essential health benefits package that provides comprehensive services including MH/SU at Parity • Requires health plans to spend 80%/85% of premiums on clinical services • Creates a new Health Insurance Rate Authority to provide oversight at the Federal level and help States determine how rate review will be enforced

31. Service Delivery Redesign and Payment Reform • $700 Billion Question: Will the current legislative and regulatory tools at our disposal be enough to improve the health status of Americans and bend the cost curve? • MH/SU Question: Is the answer to the above question the same for Americans with mental health and/or substance use disorders?

32. National Healthcare Reform Strategies and the MH/SU Safety Net • 49% of Medicaid beneficiaries with disabilities have a psychiatric illness (this is new information; previous studies that excluded pharmacy claims calculated the rate at 29%); AND this is the most expensive population... The Faces of Medicaid III: Refining the Portrait of People with Multiple Chronic ConditionsCenter for Health Care Strategies, Inc., October 2009

33. Emerging Delivery System and Payment Reform Models Where the U.S. Healthcare System is headed (at a glance)

34. Value-Based Purchasing – Medical Homes • Fee for Service is headed towards extinction • Health Care Home models will begin with a 3-layer funding design with the goal of the FFS layer shrinking over time • Being replaced with case rate or capitation with a pay for performance layer

35. National Healthcare Reform Strategies and the MH/SU Safety Net There is huge variation among the states in MH funding Most states have less than half the funding of the average of the 10 most well-funded states How will HC Reform address this?

36. National Healthcare Reform Strategies and the MH/SU Safety Net The underfunding problem is even greater in Substance Use In Treatment: 2.3 million Not in Treatment: Tens of millions (McClellan) 21% + (Willenbring) How do we even begin to address these gaps asstates and health plansrealize they have to provide SU servicesat parity?

37. National Healthcare Reform Strategies and the MH/SU Safety Net Relevance of: • Coverage Expansion: YES, YES, YES • Insurance Reform: YES (dumping); this will become more important as Exchanges cover those between 134% and 400% Poverty Level • Service Delivery Redesign: MAYBE • Will the general healthcare system be willing to treat persons with > Mild MH/SUD? • Will Medical Home Prevention, Early Intervention and Care Management strategies get close to meeting the needs of persons with > Mild MH/SUD? • Will payers support embedding Primary Care in CBHOs to the extent needed to serve those with serious/severe MH/SU disorders? • Will the CBHO system be invited to the $20B HIT Incentives “party”? • Payment Reform: Even more of a MAYBE • Will funding levels (beyond newly insured) come closer to matching need? What about in the states that are 1/3 or 1/4 of the average of the top 10? • Will new payment models be applies to MH/SU and will existing payment barriers be removed?

38. Emerging BH Safety Net Service Delivery Models • CBHOs will need to ensure that they meet a set core competencies in order to continue being an important part of the healthcare delivery system. • A full Array of Specialty Behavioral Health Services • A well defined Assessment Process and Level of Care System • A solid approach to Prevention, Early Intervention, and Recovery • The ability to practice as a Team to Coordinate Care • Demonstrated use of Clinical Guidelines • Measurement Systems and Tools that measure consumer improvement • A robust Electronic Health Record that includes Patient Registries • Quality Improvement Processes and supporting Data Systems • Financial Systems to manage Case Rate Payments • Ability to market services in response to increased competition

39. New Paradigm - Financing Integrated Care • Assuming that parity will be embedded as a requirement for most health plans in the final healthcare reform legislation and a broader behavioral health benefit will be available for most people with coverage, and … • Drawing on the California Integration Policy Initiative framework of Mild, Moderate, Serious and Severe Levels of Care… …as we make the transition to an integrated system at every level (Clinical, Financial and Structural)

40. New Paradigm – Financing Specialty Behavioral Health • The Community Behavioral Healthcare Organization(CBHO) system will need to adapt to this new model of service delivery and a high level of expectations from the general healthcare system • Federally Qualified Behavioral Healthcare Centers (FQBHCs) will become the core of the new specialty system, supplemented by specialized, less comprehensive mental health and substance use provider organizations

41. New Paradigm – Financing Specialty Behavioral Health • A parallel structure for CBHOs, Federally Qualified Behavioral Healthcare Centers (FQBHC), based on the FQHC accountability and payment structures • 10 benefits and the 8 responsibilities come with FQHC status

42. New Paradigm – Financing Specialty Behavioral Health • FQBHC status will create a single set of national standards that can serve as a blueprint for the types of services and infrastructure that need to be in place to better support the full healthcare needs of persons with serious mental health and substance use disorders • In addition, the FQBHC designation creates a single, common platform of common assumptions, approaches, and expectations for FQHCs and FQBHCs to partner in providing person-centered healthcare homes • The ability to achieve FQBHC designation and the accompanying financial benefits are necessary components for Community Behavioral Healthcare Organizations to be able to adapt to the changes that will occur in the general healthcare system

43. New Paradigm - Financing Primary Care in CBHOs • Funding is just starting to open up for embedding primary medical care into CBHOs, which is a critical component of meeting the needs of adults serious mental illness

44. New Paradigm – Payment Models • Funding methods for CBHOs are also going to need to change to address the imbalances in the current system, reverse existing incentives, and come into alignment with how the rest of healthcare will be funded (Note: PPS = Prospective Payment System)

45. Get Involved! Visit the National Council’s Policy Action Center (http://capwiz.com/thenationalcouncil/home/) to send messages to your members of Congress in support of: • An extension of the FMAP Increase • HIT Extension for Behavioral Health Services Act

46. Together We Will! 6th Annual HILL DAY June 29-30, 2010