February 2004 NACBHDD Newsletter

The monthly newsletter for the National Association of County Behavioral Health and Developmental Disabilities Directors

In this Issue...

• A NACBHD Turning Point: First Full-Time Executive Director Hired
• Plans for NACBHD
• Important New NACBHD Contact Information
• Which Way Medicaid? Current Conditions and the Forecast
  • The NAMI Perspective on Medicaid Issues
  • A Developmental Disabilities Perspective
  • A Perspective on Medicaid Issues from the National Association of Psychiatric Health Systems (NAPHS)
  • The Local Impact: California and Oregon Experience State Budget and Medicaid Crisis
  • Medicaid and Substance Abuse
• HCBS Waiver Program: Look for Sharpened Quality Assurance/Improvement Expectations
• Mathematica Working on New Medicaid Project
• From the Hill: Report from NACBHD’s Director of Public Policy
• Conference Alert: NACBHD’s Legislative Conference and Annual Conference
• Update on the Campaign for Mental Health Reform
• System Reform in North Carolina: A NACBHD Member’s Perspective
• Developmental Disabilities: Recent News and Resources
• Announcements

A NACBHD Turning Point: First Full-Time Executive Director Hired

Melissa Staats to focus on federal policy, enhancing membership benefits, building relationship with NACo

An organizational milestone: growth requires full-time leadership
NACBHD has reached an important milestone in its growth from a small organization to one that represents state associations and local mental health, substance abuse, and developmental disability authorities in over 300 counties -- the hiring of our first full-time Executive Director. Members will be able to meet our new Executive Director, Melissa Staats, at the Legislative Conference on February 26-28. She will begin work at NACBHD’s new quarters in the National Association of Counties (NACo) office on Washington’s Capitol Hill on March 1. (New contact information for NACBHD follows this article.)

A range of experience and a commitment to represent all three disability groups
The NACBHD Search Committee was impressed with Melissa’s experience and commitment in several areas:

• Her commitment to fully represent the three disability groups: mental health, developmental disabilities, and substance abuse;
• Her experience in both local and state government;
• and, of course, her enthusiasm and commitment to NACBHD.

Deborah Donaldson, President of the NACBHD Board of Directors, says, “I continue to be impressed by Melissa’s commitment to NACBHD, and I’m convinced she’s the right choice to move NACBHD into the future.”

A range of experience
In her most recent position as Deputy Director for Technical Assistance at the New York State Conference of Local Mental Hygiene Directors, where she worked with NACBHD’s Gary Weiskopf, Melissa oversaw all technical assistance activities, including, contracting with vendors; developing projects; communicating and distributing materials to members; and editing products from consultants and providing direction. In addition, she has worked for state government as a budget analyst. Her education includes an M.S.W. with a focus in management, as well as a master’s degree in Sociology, and a B.A. in political science, government and constitutional law. Her interest in county government goes back to the beginning of her career – she started out in a local department of social services before she went back for her master’s degree. She says, “Being able to influence public policy in the disability sector is a perfect fit for me.”

Melissa’s state and local work have provided her with a range of experience that will be particularly helpful in leading NACBHD. She cites both perspectives as important to advocacy efforts: “It’s been helpful to work in the state agency – to see the perspective of local and state government.” She also says, “It’s difficult to understand how huge bureaucracies work if you haven’t been inside of one.”

Plans for NACBHD

Involvement in the federal policy arena, developing membership benefits and helping members make a difference, and building the NACBHD/NACo relationship are areas that Melissa will be working on as part of developing NACBHD’s growing role as a national partner in mental health, developmental disability, and substance abuse policy.

• Federal policy: moving NACBHD forward in the national arena
  
  Melissa is grateful for the foundation laid by Bob Egnew, NACBHD’s policy consultant, and hopes he continues to assist NACBHD in this area. She looks forward to utilizing the solid relationships he has created with representatives from national disability associations such as, the National Association of State Alcohol and Drug Abuse Directors (NASADAD), the National Association of State Mental Health Program Directors (NASMHPD), the National Council for Community Behavioral Healthcare, the National Mental Health Association (NMHA), the National Alliance for the Mentally Ill (NAMI), and the Campaign for Mental Health Reform. She looks forward to continuing NACBHD’s relationship with the Substance Abuse and Mental Health Services Administration (SAMHSA), with a meeting already scheduled with SAMHSA representatives. In addition, Melissa looks forward to continuing to build relationships with developmental disability organizations which will be represented at NACBHD’s Legislative Conference. She emphasizes, “Our activities will include all three groups” – mental health, developmental disability, and substance abuse. And, the Centers for Medicare and Medicaid Services (CMS) will continue to be a focal point of developing relationships as it has such profound effects on all disability groups.
  
  
• Enhancing membership benefits: helping members make a difference
  
  Melissa cites helping members feel that their participation in NACBHD is beneficial and makes a difference as one of her most important tasks. Over the long term, she hopes to:
  
  
  • Develop products and tools for members to use in their daily operations. She feels this technical assistance is a critical aspect of advocating for the needs of members, whether it involves managing data or fiscal analysis. Ideally, members would be able to visit the web site and choose from a library of tools.
  • Provide timely and important information about developments in Washington, and
  • Make sure members are well-positioned to provide input into policy.
  
  
• Building the NACBHD/NACo relationship
  
  “I’m very excited about this opportunity. I think the relationship with NACo will help NACBHD move forward and be a recognizable organization at the federal level in the disability sector.” While her official start date is March 1, Melissa has already met with NACo health care and legislative liaisons. She looks forward to the NACBHD/NACo relationship, characterizing NACo as “a wonderful resource in terms of research and legislative abilities. They seem eager to provide support.”
  
  Work on determining NACBHD office staff and logistics is underway, and the membership will be informed as decisions are finalized. Meanwhile, Melissa’s contact information is listed below, and NACBHD’s new contact information follows.
  
  

Contact Melissa starting March 1
Melissa welcomes comments, suggestions, and questions starting March 1 at (202) 661-8816, or by email at mstaats@nacbhd.org.

Important New NACBHD Contact Information

NACBHD’s new headquarters in the National Association of Counties (NACo) offices are due to open officially March 1. You can, of course, address any correspondence or email to the new address now. Please mark and save this important new contact information as we look forward to embarking on our new relationship with NACo. As we mentioned in a previous communication, we apologize for any confusion in the process of changing our address, and appreciate your patience in the transition.

National Association of County Behavioral Health Directors (NACBHD)
440 First Street, NW
Washington, DC 20001
Phone: (202) 661-8816
www.nacbhd.org

Please note this important individual email address change:

Bob Egnew’s email address has changed. Bob, NACBHD’s policy consultant, can be reached at begnew@nacbhd.org.

Which Way Medicaid? Current Conditions and the Forecast

In an effort to gauge the direction Medicaid may take in the coming year and to gain a better understanding of current Medicaid concerns for local authorities, NACBHD interviewed representatives from disability advocacy organizations and NACBHD members experiencing Medicaid and budget crises in their states. Following is a review of the federal and state outlook and their implications and the impact of current Medicaid and budget crises locally.

Fiscal Year 2005 Budget Proposal and Medicaid
The President recently released the Fiscal Year 2005 budget proposal (www.whitehouse.gov/omb/budget/fy2005). Both the National Mental Health Association (NMHA) and the National Alliance for the Mentally Ill (NAMI) have outlined Medicaid-related concerns with the budget proposal in recent press releases. (See www.nmha.org/newsroom/system/news and www.nami.org under Inform Yourself/Mental Illness in the News.)

In summary, the FY 2005 budget does not contain last year’s proposal for structural changes to the Medicaid program to grant the states greater flexibility and federal matching for the first seven years, with fixed payments in later years. While this seems to indicate that consensus on Medicaid Reform between the Administration and the states will not be reached, growing Medicaid expenditures and fiscal pressures on states may bring the issue up again after the election. Some areas of concerns in the budget proposal are:

• The budget does not give fiscal relief to states despite the impending crisis that will occur when the help Congress provided last year expires. Many states will have the highest Medicaid growth costs in years and may have to cut health care services for low-income children, women, older Americans, and individuals with disabilities.
  
  
• Administration budget documents continue to demonstrate interest in the block grant program with capped allotments unrelated to actual needs of those covered.
  
  
• While the Administration has proposed several demonstration projects, including allowing states to offer home and community based care to children who would otherwise be in psychiatric residential treatment, the number of states in which this would be allowed is limited.
  
  

The NAMI Perspective on Medicaid Issues

Joel Miller, senior policy analyst, the National Alliance for the Mentally Ill (NAMI), spoke with NACBHD about Medicaid concerns and areas on which NAMI will be focusing.

“States are increasingly emphasizing Medicaid cost containment in their overall budget balancing efforts,” and he says, and looking for different ways to reduce the rate of escalation of Medicaid spending. Many states are still in fiscal crisis, and the prospects for temporary fiscal relief again this year, given the recent Medicare legislation and the huge deficit, are dim. Also, more people are dependent on Medicaid and this raises the question of how Medicaid will meet the needs of a growing number of low-income people.

NAMI is concerned about trends already evident to reduce this escalation. Specifically, Miller says NAMI is closely watching efforts in states toward:

• Cutting physician and hospital rates
• Reducing benefits
• Revisiting prior authorization for medication

Access to medications a primary concern
NAMI is especially concerned about the impact on access to medications. Miller says that pharmaceutical costs are growing by 15-20%, and this is an area that is looked at closely in terms of containing costs. Many states have set up formularies and may only pay for the medications approved by the formularies. Newer medications are better tolerated by consumers and have fewer side effects, but are often more expensive; and, therefore, not in the formulary. And, there are some trends evident related to the broader issue of prior authorization that are of concern:

• A “fail first” trend toward using an older class of drugs first. As Miller notes, some consumers may have been on the newer medications for a while and making this switch is problematic, and an issue that NAMI believes is best addressed between physicians and consumers.
• Copayments are being examined in some states.
• Limiting the number of medications prescribed each month.
• Controls on off-label use. For example, physicians find that some medications have multiple uses for psychiatric conditions, but this multiple use is not approved by the FDA. Some states are using this as a cost-saving measure.

The costs of limiting access
“Open access to behavioral health medications is critically important,” says Miller. “Restricting drug choice has a negative impact on a personal and financial level.” And he says, it will ultimately increase, rather than decrease, the total healthcare costs for patients, with direct impact on relapse, unwanted side effects, and more physician and emergency room visits.

Review processes may demonstrate improved care and cost containment with newer medications
In light of these pharmaceutical concerns, NAMI is closely watching two methods of monitoring medication practices:

• The Medicaid programs in Massachusetts and Missouri have introduced polypharmacy review processes which track physician prescription practices and consumer adherence, which may demonstrate improvement in care and cost containment.
  
  
• Some states have adopted a strategy of clinically tested protocols for medications, following the Texas Medication Algorithm Project (TMAP).
  
  

In addition to the cost containment trends evident in some states, Miller cited the State Health Care Partnership Allotment Plan proposed by President Bush last year as an area of concern. It would have provided significant funding to restructure the Medicaid program. While this did not get much play in Congress, there are rumblings that there could be a move toward a block program. If states are not satisfied with growing escalation, there could be a movement through “the back door” with waivers – one way for states to bring more people into the program in a budget neutral way, but costs would have to be cut in other areas.

Miller emphasizes that the fiscal situation continues to look bleak, “It’s déjà vu all over again for FY 2005.” And, the number of uninsured is growing at an alarming rate. For the period from 2001 to 2002, the U.S. Census Bureau reported that those without health insurance had grown by 2.5 million, so that the current number without health insurance is 44 million. And as Miller notes, there is more pressure to include the uninsured in the Medicaid program. He believes the “perfect storm” created by the pressures of the rapidly increasing number of uninsured, the fiscal crisis, and the states’ attempts to control escalating healthcare costs will be a major focus of the Presidential and Congressional elections.

For more information on NAMI’s policy positions, visit the NAMI web site at www.nami.org. Under the Inform Yourself section, see “About Public Policy” for various policy issues, including Access to Medications and Medicaid, as well as important policy information under the Policy Research Institute.

A Developmental Disabilities Perspective

NACBHD spoke with Gary Smith, Senior Project Director, Human Services Research Institute, and former Director of Special Projects for the National Association of State Directors of Developmental Disabilities Services, where he assisted states in effectively using Medicaid to support people with developmental disabilities.

Smith predicts that there will be discussion about Medicaid reform, but that very little may happen in an election year. He points to a lack of “external pushes,” (such as those driving the Medicare prescription drug benefit), divisions in the National Governor’s Association about the issue (Democratic governors opposed it), and very little in the way of Congressional hearings.

While there has been Medicaid-related legislation in Congress for a while, such as the Family Opportunity Act and the Medicaid Community Attendant Services Act (MiCASSA), Smith says that they are both “spenders” – they cost more money and their future hinges on a budget resolution and whether that is moved on. And Smith notes, there is an “emptied piggy bank” with Medicare.

In terms of state budget cuts and Medicaid, Smith says that, in general, states have bounced back a little, but that it depends on the state. For example, Wyoming is “sitting on top of a huge surplus,” but California and Oregon are still struggling (see following article). Most states have hit bottom and bounced back a bit – but it will be a year or two before most states think about boosting spending. Smith notes that more “bloodletting” was done on the mental health side than the developmental disability side.

Smith says the recently released report from the Kaiser Commission on Medicaid and the Uninsured, “States Respond to Fiscal Pressure: A 50-State Update of State Medicaid Spending Growth and Cost Containment Actions,” is a helpful resource. For more information, see www.kff.org/medicaid.

Most action will probably be in the administrative area, says Smith, such as the quality assurance/improvement initiatives in the HCBS waiver programs. (See following article.)

A Perspective on Medicaid Issues from the National Association of Psychiatric Health Systems (NAPHS)

Kathleen M. Sheehan, Director of Government Relations, NAPHS, provided the following information on NAPHS’ Medicaid advocacy focus:

Medicaid EMTALA/IMD
On October 22, 2003, identical versions of the Medicaid Psychiatric Hospital Fairness Act of 2003 were introduced by Reps. Jim McCrery (R-LA) and Tom Allen (D-ME) in the House (H.R.3363) and Sens. Olympia Snowe (R-ME) and Kent Conrad (D-ND) in the Senate (S.1771).

The proposal addresses the shortage of inpatient psychiatric care and resolves a conflict in Federal law. It would allow Medicaid reimbursement for adult Medicaid patients who are served under the Emergency Medical Treatment and Labor Act (EMTALA) for psychiatric hospitals. General hospitals now receive reimbursement for Medicaid-eligible patients, but reimbursement is not provided to psychiatric hospitals serving adult patients (ages 21-64) under the Medicaid Institution for Mental Disease (IMD) exclusion. Under this legislation, both general and psychiatric hospitals could receive reimbursement for services provided to EMTALA patients.

The measure is supported by the National Alliance for the Mentally Ill (NAMI), the American Psychiatric Association (APA), the National Association of County Behavioral Healthcare Directors (NACBHD), the National Association of Psychiatric Health Systems (NAPHS), and the American Hospital Association (AHA).

The next step includes a campaign to solicit congressional support for the proposal– particularly support from Republican leaders. Passage of the bill could take place as part of a greater effort to reform Medicaid or to address the needs of the uninsured.

Medicaid Funding/Reform and Legislation to Help the Uninsured
NAPHS is actively advocating at the national level to assure that Medicaid funding is adequate and that proposed changes in Federal law do not adversely impact services offered by its members. In line with that commitment, NAPHS has provided leadership to a work group of the Mental Health Liaison Group to advocate with Congress, the National Governors’ Association, and Medicaid think tanks, such as the Kaiser Family Commission on Medicaid and the Uninsured. NAPHS has also provided its members with information on how to obtain state-specific information on Medicaid funding and services.

Family Opportunity Act
Congress did not complete action on legislation to expand Medicaid coverage to include more children with severe emotional disturbance and reduce families' need to relinquish custody to access mental health service for their child. The Senate committee approved its version of the bill, but the House failed to act this year. The Family Opportunity Act (S.622, H.R.1811) is sponsored by Sens. Charles Grassley (R-IA) and Edward Kennedy (D-MA) and Reps. Pete Sessions (R-TX) and Henry Waxman (D-CA).

The bill would allow families to "buy in" to Medicaid on a sliding scale to cover a child who meets the Social Security Income (SSI) definition of disability. A family with access to employer-sponsored health care that contributes at least 50% of the premium must elect this coverage and use these benefits first. The child's Medicaid coverage would then supplement the private health insurance policy. Waivers would also be established to allow states to provide services to children with serious emotional disorders in community-based settings or institutional settings as appropriate.

Medicare Prescription Drug Benefit
On December 8, 2003, President Bush signed the Medicare Prescription Drug Improvement and Modernization Act of 2003 (Public Law 108-173). The law creates a new Medicare “Part D” benefit that will offer prescription drug coverage to individuals eligible for Medicare. Enrollment is voluntary for all Medicare recipients except those who are dually eligible for Medicaid, who will have to enroll in Part D if they wish to have any drug coverage at all. Coverage will be available through specialized drug plans or as part of the benefit offered by a managed care organization.

Many of the details for implementation remain to be addressed through rulemaking. The Department of Health and Human Services has proposed rules for the interim drug “discount cards” which it expects to issue as early as June 2004. These discount cards will provide limited interim relief in the form of discounts – predicted to be 10% to 15% – on prescription drug prices until the Part D benefit becomes effective in 2006.

The Local Impact: California and Oregon Experience State Budget and Medicaid Crisis

• Current Conditions in California, Forecast Uncertain
  Cathy Geary, NACBHD member, and Chair of the Medi-Cal Policy Committee for the California Mental Health Directors Association as well as Mental Health Director of the Sonoma County Mental Health Division, talked with NACBHD about Medicaid issues in California.
  
  Kim Belshe, the new head of the health and welfare agency appointed by Governor Schwarzenegger, has announced that restructuring of the California Medicaid program is the number one priority for the year, with restructuring to happen no later than the Spring. Counties are both managers and providers of Medicaid to mental health beneficiaries, and many provide both mental health and drug and alcohol abuse services, depending on county structure. Behavioral health is a relatively small part of Medicaid, but the intent of restructuring is to limit growth.
  
  Geary notes that some counties in California are in very dire straits. Counties have to put up the local dollars to match federal dollars – about 50/50. Fifty percent of Medicaid services from the county dollars go for adult services; the responsibility for EPSDT falls more at the state level. As Geary says, when the state gets pressed in California, it tends to get pushed down to the counties, who are experiencing increased responsibility and increased financial pressure. This is the first time some counties are talking about dropping out of Medicaid and not providing mental health services if something does not change. Therefore, the interest in restructuring relates to a real interest to help counties stay in business.
  
  This effect on consumers would be tremendous. If counties were to drop out of Medicaid, responsibility for services would drop back to the state, which does not want it. This brings up tension and the questions of who would provide services, and would the state ask other counties to step in?
  
  At this point, Geary says the process is to work with all stakeholders, including counties, to look at what other states like Oregon and Texas, are doing; and it is particularly helpful to look at what other states with county-based systems are doing. Geary says, “Counties have worked enormously hard to provide quality services.” But there is not enough money in the mental health system to meet Medicaid needs. The conversation centers on how to restructure services to fit the amount of money available.
  
  There are no specific proposals yet, but they will be put forth soon. Any proposal would consider one or some combination of the four elements of rates, eligibility, scope of benefits, and range of services. There have already been cuts to the Medicaid program in the last year, and some proposed for this year, 04-05, which have affected rates.
  
  Medicaid and related problems impact county services
  Geary notes that the uninsured are a companion issue in California, which is also a county responsibility. As she explains, if eligibility is “squeezed too hard,” there will be more uninsured.
  
  An unanticipated problem for California counties is the commercially insured who use public health and then their insurers do not pay for services. California’s parity law identifies parity by diagnosis, but insurers do not abide by it. Geary notes that if parity were working, counties would be seeing fewer people, not more. She says that there needs to be “more meat” in this legislation, since it is not enforced. These three groups constitute what Geary calls the “three-legged stool” of:
  
  
  • Medicaid
  • Uninsured
  • Commercially insured who use public health and then their insurers do no pay for services.
  
  This impacts counties and their ability to provide services. As Geary explains, counties have made significant reductions in mental health services over the past two years – up to 15% of outpatient services. While she is not sure of the effect of this in terms of exact numbers in emergency rooms and the criminal justice system, she knows that the impact is significant. Out of the ten hospitals in her county, the two biggest problems in emergency rooms are people with emotional problems and people with emotional problems presenting with help for physical illnesses. And, “Our sheriff would always suggest more mental health services and drug and alcohol services.”
  
  Initiative to tax upper incomes would relieve pressure
  The Mental Health Services Act, an initiative to serve California’s most severely mentally ill by imposing a one percent tax on net income above $1 million, would bring more money into counties to treat broader groups than they are mandated to treat now. Funds would be distributed to counties using a planning process. This would relieve pressure on all three sides of the three-legged stool. However, not all counties are supportive of the initiative; there is some disagreement about using initiatives as a way of making policy. Geary says, “If it passes, it would have a significant, maybe even tremendous, impact.” She says that “There’s got to be a seamless way for these three groups to work together” so that they are all covered. She characterizes current coverage as “disparate” and “incoherent,” and notes that parity legislation is “just a little bite” and that the uninsured consistently “get left out,” ultimately begging the question, in her view, of national health insurance.
  
  
• The Outlook in Oregon
  Gina Firman, Executive Director, Association of Oregon Community Mental Health Programs, and NACBHD member, spoke with NACBHD regarding Oregon’s state budget crisis, Medicaid, and county services.
  
  Oregon voters defeated ballot Measure 30 by 58% to 42% on February 4, with a package of over $500 million needed to balance the budget. If the measure did not pass, the legislature had already decided what to cut. There will be a $178 million cut to healthcare; with the first to be mental health and chemical dependency and cutting Medicaid services through the Oregon Health Plan (OHP) for those populations. Oregon has a 40/60 match that would turn a lot of federal dollars away.
  
  Measure 30 would have involved a three-year income tax surcharge – families with a median annual income of $41,000 would pay about $36 more in state taxes, a reduced medical state tax deduction for seniors, and increase on the minimum corporate taxes, and a 10 cent per pack cigarette tax increase. Opponents of Measure 30 felt that Oregon cannot afford any tax increases – the state has had the highest unemployment rate for the past two years. (Kaiser Daily Health Policy Report, 2/3/04 and 2/5/04, www.kaisernetwork.org/daily_reports)
  
  The Oregon Health Plan has two groups that can qualify for Medicaid: 1) Plus, the most destitute or needy, and 2) Standard, covered under targeted case management. These 50,000 people were cut last year as a cost saving measure, and this population is already affecting the hospital and criminal justice systems, with hospital administrators and sheriffs sending letters about the impact on their systems.
  
  Firman noted that alternatives to these cuts are not restoring 12 and 13 for seniors and others with disabilities, which would trade services for physical disabilities for mental health services. And she notes the Final Report of the President’s Commission on Mental Health does not say that mental health and chemical dependency treatment and services are optional; but when states are in a bad fiscal situation, these services become optional. She feels that this flies in the face of parity, and she is hoping that the DHS and the governor can decide on alternatives to cutting mental health and chemical dependency.
  
  

Forums to address the issue

• Mental Health Task Force, appointed by the governor to address the broken mental health system in Oregon. Four local mental health authorities are on the Task Force. Firman’s organization is involved in letter writing, meeting with the governor, legislature, and DHS.
  
  
• County commissioners have a letter writing campaign aimed at DHS and the governor and emergency board, as well as a web site collecting information on the issue. They are trying to mobilize and communicate with the governor regarding alternatives to the cuts, such as:
  
  • Cut levels 12 and 13
  • Savings in the Department of Seniors and Disability of $37.5 million that could be transferred
  • Hospital provider tax proposed – a tax on hospitals with Medicaid clients to help fill gap in funding for Medicaid
  • Rebalance end of year money
  • Advocacy efforts. A rapidly moving advocacy effort led by NAMI Oregon to create Partners in Crisis is underway. They will join forces with sheriffs and county commissioners to address the issue and the impact of potential cuts. Such efforts have been launched in Florida and Washington. Firman notes that in Oregon, human services never play really well, but law enforcement does.
  
  

For more information or further discussion about the process, contact Gina Firman at (503) 399-7201.

Medicaid and Substance Abuse

A perspective from the Chair of NACBHD’s Substance Abuse Committee
Karen Scherra, Executive Director, Clermont MH & R Board, in Batavia, Ohio, and Chair of NACBHD’s Substance Abuse Committee, shares her thoughts and experiences about Medicaid and substance abuse issues.

Scherra likens the problems with Medicaid funding and substance issues services to “starting the spiral.” While Medicaid is a dominant funding source in mental health, it is not so much so in substance abuse; however, one area of similarity is the issue of limitations on Medicaid eligible services. In her area, they are finding more of a need for housing, vocational services, and residential services, and that is harder to offer people what is necessary. Drug addiction is worsening, with more cocaine and heroin addiction, leading to more disruption of lives. The lack of Medicaid, coupled with the lack of other benefits, such as disability assistance, is all part of “starting the spiral.” If a consumer loses eligibility for Medicaid, they lose eligibility for medical services, which impacts the substance abuse population, and often the criminal justice system.

On the mental health side, Medicaid pays for a wider range of services, which makes it easier to put resources toward housing and vocational areas. In her state, Medicaid pays only for individual or group outpatient services, which may not “get at the real issues of what is happening” with substance abuse. In addition, fewer and fewer individuals are even eligible, with the number of eligible adults is dwindling, while the number of eligible adolescents is not because of SCHIP.

In Ohio, better outreach needs to be done to make sure people know when they are eligible. Some of the recent efforts to educate people had them very confused – they were hard for even Scherra to understand. Many may be confused and think that they are not covered and do not attempt to access treatment.

Scherra notes that another issue of concern is the faith-based Access-to-Recovery program. Questions remain about its impact on states and funding.

HCBS Waiver Program: Look for Sharpened Quality Assurance/Improvement Expectations

The GAO recently produced the report, “Long Term Care: Federal Oversight of Growing Medicaid Home and Community Based Services Should Be Strengthened” (GAO # 03-576, 6/2003) on CMS’s monitoring of HCBS waiver services, concentrating on aged and disabled waivers. The report was critical of the Centers for Medicare and Medicaid Services (CMS) in terms of frequency of reviews, which has led to a series of activities to sharpen the monitoring process. And Valerie Bradley, President, Human Services Research Institute (HSRI), notes that there has been a proliferation of waivers over the last ten years, which in turn has put an increasing burden on CMS staff to keep pace. In 1982, there were “only a handful” of waivers for persons with developmental disabilities; in 2002 there were 90+ waiver programs for 380,000 people. And aside from the GAO report, CMS began to develop quality initiatives two to three years ago.

The waiver is the biggest source of funding for county developmental disabilities services. And Bradley says, states have maximized federal reimbursement by expanding waiver programs. Massachusetts community developmental disabilities, for example, are funded exclusively by waivers. Therefore, anything CMS does around waivers and quality assurance has a big impact. Over the next several months, counties may see more sharpened and focused expectations regarding quality assurance.

What to look for
CMS will look to states to have comprehensive quality assurance measures that fit within certain parameters, require that states fill in the gaps where they do not have comprehensive procedures, and states will have to describe how they use quality assurance procedures.

Bradley explains that in states with centrally decentralized systems, the expectations for what counties have to do may be sharpened. Things may change in some states where counties have operated in a fairly autonomous role.

CMS has already begun to communicate these expectations. See the quality initiatives area of the CMS website at www.cms.hhs.gov/medicaid/waiver/quality.

Technical assistance: National Quality Improvement for Home and Community Based Services (NQI)
HSRI, along with MEDSTAT, is a part of a national contract for CMS on quality assurance in HCBS services. HSRI is involved on the developmental disabilities side, and MEDSTAT concentrates on HCBS waiver programs for older persons and individuals with physical disabilities. As part of the contract, HSRI provides technical assistance to states. HSRI is in the process of putting together a quality assurance web site. (Check www.hsri.org.) Bradley is the principal investigator, and June Rowe of HSRI is the project director. For information or questions, contact June Rowe at jrowe@hsri.org. Other resources for quality assurance are www.hcbs.org and www.qualitymall.org, which has a best practice and quality assurance section.

HSRI Quality Assurance/Improvement Survey to be released soon
HSRI recently conducted a survey of quality assurance and improvement regarding waiver programs, with a 100% response for developmental disability programs – all 55 state agencies nationwide that operate HCBS waiver programs for people with developmental disabilities responded to the survey. CMS soon will release a synopsis of the survey and other materials related to HBS QA/I on its website, including an “action plan” describing what the agency plans to do in this arena.

Mathematica Working on New Medicaid Project

Mathematica Policy Research, Inc. is conducting a Substance Abuse and Mental Health Services Administration (SAMHSA) funded project to develop a better understanding of mental health service use and expenditures in state Medicaid programs. Debra Draper, MSHA, Ph.D., of Mathematica, describes the multi-year project that began in October, as having two main components:

1. The first component of the project involves the development of state-level tables on mental health and substance abuse service use and expenditures in state Medicaid programs. All 50 states and the District of Columbia will be included in the analysis. Data for these tables will be extracted from Medicaid claims and eligibility data that states have submitted electronically to CMS through the Medicaid Statistical Information System (MSIS). The year of analysis will be 1999 – the year in which the most recent data are available in a form that permits this kind of detailed analysis. (The data are in the Medicaid Analytic Extract (MAX) files.) In addition to the development of the stat-level tables, Mathematica will identify where there might be data issues and encourage states to improve in these areas.
   
   
2. The second component of the project is intended to go beyond the data and statistics on mental health service use and expenditures to a deeper examination of the nuances in the processes and procedures used by states to create mental health policy and to administer mental health services in their Medicaid programs. Another important goal of this component of the project is to identify and assess what data on Medicaid mental health and substance abuse services currently exist in states, how it is used, and its quality, integrity, and consistency across agencies. This part of the project involves a survey of state officials to collect data on these issues.
   
   

An expert advisory panel, including Dr. Sandra Naylor-Goodwin, Executive Director of the California Institute of Mental Health, and a NACBHD board member, will provide guidance for the project. In addition to Dr. Goodwin, the advisory panel includes representatives from state Medicaid agencies, state mental health authorities, national mental health advocacy organizations, the Center for Medicare and Medicaid Services (CMS), the National Association of State Medicaid Directors, National Association of State Mental Health Program Directors (NASHPD) Research Institute, and mental health researchers.

The final report for the project will go to SAMHSA, with briefings for other identified groups. The tables from the first year of the project are scheduled to be completed by Fall 2004.

Medicaid Funding of State and County Psychiatric Hospitals
In the September 2002 newsletter, NACBHD reported on another Mathematica project, “Medicaid Financing of State and County Psychiatric Hospitals.” The results of this project are now available through the SAMHSA National Mental Health Information Center’s publications section at www.mentalhealth.org/publications/allpubs/SMA03-3830/content02.asp.

From the Hill: Report from NACBHD’s Director of Public Policy

Robert C. Egnew, M.S.W., M.P.H., NACBHD’s Director of Public Policy, filed the following report.

As Congress convenes for the second session of the 108th Congress, there are several bills that NACBHD members should closely follow. It is unclear as to the fate of any new legislation this session -- the federal deficit looms larger and it is an election year, which will involve a great deal of political posturing on every issue. Some of the legislation that should be tracked includes the following:

Medicaid IMD/EMTALA
The Medicaid Psychiatric Hospital Fairness Act of 2003 was introduced during the waning months of last session. The bills S-1771 by Senators Olympia Snowe (R-ME)A and Kent Conrad (D-ND) and HR-3363 by Representatives Jim McCrery (R-LA) and Tom Allen (D-ME) addresses the storage of psychiatric inpatient beds and the conflict between the current rule regarding Institutions for Mental Disease (IMD) which prohibits payment to free-standing psychiatric hospitals and the federal requirements found in the Emergency Medical Treatment and Labor Act (EMTALA) which requires hospitals to admit patients who are in an emergency regardless of ability to pay. This bill may continue as a stand alone bill, may be incorporated into a larger Medicaid bill, if one is introduced, or may be amended into an appropriations bill at the end of the session.

Medicare Mental Health Co-Paymeny Equity Act
The Medicare Mental Health Co-Payment Equity Act, introduced by Senator Olympia Snowe (R-ME) and Representative Ted Strickland (D-OH), provides for parity in amount of co-payments required for mental health services be consistent with the co-payments levels which have been established for physical illnesses. The bills would thus remove the disproportionately higher co-payments required for mental health services paid for by Medicare. It is too early to project, however, how these bills may fair during this session of Congress.

Mental Health Parity
While mental health parity legislation has been a disappointment to every one in the mental health community, Congress did extend the existing law until December 31, 2004, to allow Congress time to complete reauthorization of the mental health parity law. The latest version of the parity law would expand the 1996 Mental Health Parity Act to assure that number of visits, day limitations, co-payments, and deductibles for mental health would be on the same basis as medical and surgical benefits. The 1996 law was limited solely to annual and lifetime limits in coverage for mental health services. S-486 and HR-953 will continue to need to be closely followed during this session of Congress.

Conference Alert: NACBHD’s Legislative Conference and Annual Conference

Legislative Conference, February 26-28: The New Federal Vision: Impact on Local Behavioral Health Authorities

This year’s Legislative Conference marks NACBHD’s first conference with a full-time Executive Director in attendance. (Melissa Staats will be at the conference and looks forward to meeting members.) In addition, the conference provides timely policy information on recent issues and developments at the federal level with representatives from federal agencies, national disability organizations, and consumer organizations contributing their perspective. Members will enjoy a more interactive format, with an opportunity for dialogue with speakers and sharing of ideas.

Topics include:

• Health economics and Medicaid implications with Risa Elias of the Kaiser Commission on Medicaid and the Uninsured,
  
  
• Federal perspective on developmental disabilities issues with Patricia Morrissey, Commissioner of the Federal Administration on Developmental Disabilities,
  
  
• SAMHSA update with Administrator Charles Curie, and a NACBHD member question and answer session with Mr. Currie and staff to follow;
  
  
• Report from Glenn Stanton of the Centers for Medicare and Medicaid Services;
  
  
• Advocacy training with Tom Joseph, Deputy Legislative Representative, County of Los Angeles, and Jennifer Myers, Associate Legislative Director, NACo,
  
  
• A discussion of children’s behavioral health policy and the Final Report of the President’s Commission on Mental Health, with Commissioner Larke Huang, MD;
  
  
• A panel discussion with consumer and families’ representatives about “hot” issues facing Congress this year including Andrew Sperling, Executive Director, Federal Policy, NAMI; Paul Marchand, Assistant Executive Director for Policy and Advocacy, the ARC; and Susan Rogers, Director of Special Projects, National Mental Health Consumers Clearinghouse.
  
  

As an added bonus, an evening reception on the first night of the conference will allow members, policy partners, and Congressional staff to mingle, relax, and network. Representative Patrick J. Kennedy, Senator Michael Dewine, and California Congresswoman Susan A. Davis have been invited to the reception.

Hotel reservations and conference registration
Hotel reservations should be made directly with the Jurys Hotel at (202) 483-1350 or www.juryswashingtondc.com. Information and instructions regarding conference registration can be obtained from the NACBHD website.

Ninth Annual NACBHD Conference Set for July 15-17

The 9th Annual NACBHD Conference is scheduled for July 15-17, 2004, at the Ritz Carlton Hotel, in Phoenix, Arizona. One of the themes highlighted will be cost savings and efficiency. Information regarding hotel and conference registration will be made available to members as soon as it is finalized.

Update on the Campaign for Mental Health Reform

In an effort to routinely update members about the activities of the Campaign for Mental Health Reform, whose partners, including NACBHD, are working to advance the goals and recommendations of the President’s Commission on Mental Health, NACBHD spoke with Bill Emmet, project director for the Campaign and a project director at the National Association of State Mental Health Program Directors.

The campaign partners are meeting periodically to develop policy, as well as meeting with representatives of different agencies regarding the Commission’s goals and recommendations. (NACBHD’s policy consultant Bob Egnew, is in meetings or contact with the Campaign.) Currently, the Campaign, which Emmet says partners envision operating for at least two years, is involved in work on several fronts:

• SAMHSA reauthorization. Reauthorization of the Substance Abuse and Mental Health Services Administration (SAMHSA) is important for the advocacy community and for the principles of the New Freedom Commission. While the Subcommittee on Substance Abuse and Mental Health Services of the Senate Health, Education, Labor, and Pensions (HELP) Committee has indicated they could meet this winter regarding the reauthorization, no meetings are scheduled at this point. The Campaign is in the process of working with SAMHSA on what reauthorization should include and providing these thoughts to the staff of Senator Mike DeWine (OH), who chairs the Subcommittee.
  
  
• Mentally Ill Offender Treatment and Crime Reduction Act (S. 1194). The act has passed the Senate, and more sponsors are being sought in the House. The Campaign is eager to see action on this issue this session. The act has broad support from the criminal justice community, and NACo has also endorsed it. For county authorities, the act could lead to grants and partnerships at the county level between county behavioral health authorities and criminal justice agencies.
  
  
• Work with federal agencies to increase awareness of the goals and recommendations of the President’s Commission, and to address the issues of fragmentation highlighted in the Final Report, such as the Health Resources and Services Administration (HRSA), which administers public health programs, including addressing behavioral health concerns across the broader public health spectrum. For example, HRSA has a number of programs related to behavioral health issues, such as suicide prevention. As Emmet says, it “just makes sense for there to be better communication.” Meetings are also planned with the Veterans’ Administration and the Department of Housing and Urban Development (HUD). And, a meeting with the Centers for Disease Control (CDC) is scheduled regarding a more comprehensive approach to gathering information on mental disorders.
  
  
• A Carter Center Symposium follow-up meeting. The Symposium, which took place in early November, focused solely on the President’s Commission. According to Emmet, the group is still very interested and is beginning to review materials from the meeting.
  
  

SAMHSA, through the office of Kathryn Power, Director for the Center for Mental Health Services, is preparing an action plan, which will provide recommendations for building on the Final Report of the President’s Commission. Emmet says, “The hope is that this will be ambitious and take advantage of the opportunities created by the report.” In addition, the Campaign has grant applications pending for funding to improve their capacity for further work. For more information on the Campaign, see www.mhreform.org.

System Reform in North Carolina: A NACBHD Member’s Perspective

Carol Clayton, NACBHD member, and Executive Director of North Carolina Council of Community Programs, recently spoke with NACBHD about the system reform process in her state. Clayton is also the author of an article in the September/October 2003 issue of the North Carolina Medical Journal, “Terms of Engagement: Implementing a Change Process at the Local Level.” The September/October issue of the North Carolina Medical Journal is devoted exclusively to the process of mental health services system reform, with articles authored by various stakeholders in the process.

Background
North Carolina “lagged behind” in some areas that have transformed other public mental health systems over the last 30 years, such as deinstitutionalization, Medicaid expansion, managed care, and the move to local authorities, but starting in the mid-‘90s, several events revealed large systemic problems. The state’s first Medicaid managed mental health care was terminated; financial audits of local Area programs demonstrated lack of proper documentation for Medicaid billings; and a $32 million payback was made to the federal government because state matching funds for Medicaid services were not met. In addition, due to expanding demands for services and reductions in state reimbursement rates, Area programs became “fiscally distressed.” At the same time, state psychiatric hospitals faced problems with staffing, Medicaid reimbursement certifications issues, and their physical plants, that necessitated replacing them at a cost of several hundred million dollars if they were to remain open. Further, the 1999 Supreme Court Olmstead decision raised the prospect of more funding for community care and large financial penalties for state noncompliance. The North Carolina General Assembly asked the Office of the State Auditor to examine the state hospitals and to make recommendations about reforming the state and local care system. Mental health reform legislation (HB 381—Session Law 2001-437) was enacted in 2001, with the new care system to be developed over a five-year period (2001-2006).

Recommendations from the State auditor’s report

• Downsize and replace the four state hospitals with three new ones at a $580 million construction cost
• Reorganize the overall system. Dismantle Area boards and replace them with county-operated models like those in Michigan, Ohio, Pennsylvania, and California, with local management entities (LMEs) as the cornerstone.
• LMEs would not provide direct treatment or rehabilitative services – qualified private providers would do so. LMEs would lead in administrative, quality assurance, and funding roles at the local level.
• LMEs would have budgetary control over down-sized state hospitals, allowing LMEs to decide how hospitals would function in the continuum of care. The auditor’s report had demonstrated that previously state hospitals had operated independently of the Area programs.

(North Carolina Medical Journal, September/October 2003, Volume 64, Number 5, p. 206, www.ncmedicaljournal.com/sept-oct-03/toc0903.htm.)

A local perspective Clayton says of system reform, “It is and can be a good thing,” but adds, “Trying to do it all at once is a tremendous challenge.” Half-way through the change process, she is able to elucidate some of the significant challenges and positive outcomes that are already evident.

Challenges

• Workforce: a unique challenge for local authorities. Clayton says that the reform process has changed primary roles and responsibilities to that of a local public manager with much less focus on service. There has not been much evolution in North Carolina in privatization in mental health and substance abuse; this has been much more so on the developmental disabilities side. They are trying to move to a publicly managed program – opening up to a service provider system to access to private nonprofit and for profit service providers, with a focus much less on public service provision than on service management. In addition, there are individual employee transition issues and employee retirement, with lots of livelihoods affected. Importantly, Clayton notes, there is “not a lot of new blood coming in.” While trying to meet the goals of reform, individuals are facing uncertainty about employment, changes in roles, and reductions in the workforce. “Another serious challenge in this reform effort is the fact that employees, who, more often than not, are affected personally by the change, are the very staff who must make the change effort successful at the local level.” Clayton’s article explains that an Area program that is now employing 300 staff is likely to be employing 40 staff in ’04-’05. This dearth in the workforce will occur in a system which already experiences “workforce shortage at an alarming rate.”
  
  
• Trying to do too much at once. Many large changes, with their own tensions, are occurring at once. According to Clayton, changes and issues of this magnitude have not been in play since the early stages of public mental health. For example:
  
  
  • As a result of the structural changes in the system, every county has had to reconnect with their governance. Some parts of the state are going through mergers and consolidations. In addition, while a central aspect of reform is greater county involvement, there is also a sense of “state-wideness,” (since the state is charged with creating a consistent state-wide system), which creates tension between state and county government.
    
    
  • Service definitions and requirements for provider credentialing/certification, rates for services, and other requirements are not in place yet, so that local public systems are hard pressed to negotiate or contract with new or existing private or nonprofit providers.
    
    
  • Evidence-based practices have not yet been fully defined, with area programs left to make best decisions about treatment paradigms. Assertive Community Treatment will not be readily available in rural areas due to staff-patient ratios needed for it.
    
    
  • In the midst of these changes, Area programs will begin to be paid differently starting July 1.
    
    
• Consumer empowerment. There is a real issue of consumer empowerment and choice in the transition process that must be addressed. While the reality is that consumer choice is not unlimited, there is enough flexibility that consumers can be accommodated in the change process.
  
  
• Consumer and family involvement is not yet defined. Each local program is required to establish a local consumer and family advisory committee. While consumer and family involvement is universally viewed as a positive goal, exactly how this new relationship will work has not been explained. This is an especially sensitive issue in an atmosphere in which consumer and family members may come to the process angry after years of inadequate service. Training will be needed for both professionals and consumers as they embark on this new partnership, in which consumers will participate in an advisory role and influence the system at a decision-making level.
  
  

As Clayton says, “It is a big challenge to do multiple big changes at once.” She believes that a key element missing is incremental goals and markers of success, such as “What do we want to accomplish for ’03-’04?”

Positive Outcomes

Clayton says the overarching goal of a more effective system with demonstrated outcomes of better access and choice can be achieved. She already sees evidence of achieving this goal in several areas.

• There is lots of activity going on around the recovery movement.
• When she asks area programs to name a success, they cite improved services.
• There is evidence of community collaboration – a sense that the community owns and supports its system. She cites a community in the southeastern part of the state that has called on its natural support systems to connect with clinical support systems – its local ministry has already spoken with the clinical system about how the less impaired population might be served.
• There is public/provider collaboration. In creating an emergency response system in the western part of the state with a huge rural mountain area covering several counties with a population of around 178,000, all service systems have been brought together. There are new options to stabilize consumers, with the philosophy of recovery ingrained.

“Be thoughtful about what you do” is key to negotiating the change process, says Clayton. She notes that it is important to keep in mind that North Carolina is largely a rural state, and as such, the impact of change on individuals reverberates throughout the process. The workforce issues mentioned above are a prime example, as well as instances in which there is a “disconnect” between what a county does and what the community expects them to do. For example, consumers have sometimes had difficulty continuing services, but there is enough flexibility in the process for plans to move forward and for people to still receive services. Clayton is unsure whether the confusion was a result of bad planning or misunderstanding, noting that some people responded to early messages from the state and may have moved before their communities were ready to embrace the change. As she says, “People always remember the first message and the last message.” And, to paraphrase her article, knowing the terms of engagement is central to managing the frustration of the reform process and ultimately enjoying the associated benefits – namely knowing the financing structure, service packages, rates for service, expectations for outcomes and best practice, and role of the Area programs in managing services and providers.

Developmental Disabilities: Recent News and Resources

Developmental Disability News

Tennessee v. Lane
On January 13, the Supreme Court heard oral arguments in the State of Tennessee v. George Lane and Beverly Jones, in which the plaintiffs Lane and Jones, both paraplegics, were denied access to courtrooms on the second floors of buildings lacking elevators. The issue in the case is whether Congress had the constitutional authority to require states to pay money damages for violations of Title II of the Americans with Disabilities Act (ADA). (Title II protects those with disabilities from discrimination in courtrooms, schools, health care programs, and other public areas.) The Court will decide whether those with disabilities have the right to seek damages against state entities. As Jennifer Mathis, staff attorney for the Bazelon Center for Mental Health Law, said in a press release, “The wrong ruling could strip millions of Americans of a critical means of enforcing their rights. Beyond that, it would set the stage for further erosion of civil rights in this country.” As the Bazelon press release notes, the damages are a way to ensure compliance with the law and prevent discrimination, and the case will focus on whether Congress had the right to enact the ADA in the first place. A decision in the case is expected some time in the summer. (www.bazelon.org/newsroom/1-12-04_lane_bazelon_statement.htm)

Developmental Disabilities Resources

State of the States in Developmental Disabilities Now Available Online
The 26-year longitudinal record of revenue, spending, and programmatic trends in the United States as a whole, the 50 states, and the District of Columbia, “State of the States in Developmental Disabilities” is now available online. Funded by the Administration on Developmental Disabilities of the U.S. Department of Health and Human Services and administered by the University of Colorado, the project was established in 1982 to study the factors in public spending for mental retardation/developmental disabilities services in the United States. It demonstrates the impact over time of state and federal fiscal policy, service delivery trends in states in community living, public and private service institutions, family support, supported employment, Medicaid waivers, demographics, and related areas. The document is available in pdf format at www.cusys.edu/ColemanInsitute/stateofthestates.

Announcements

Comments on Proposed CMS Regulations Can Now Be Sent Using the Internet

The Centers for Medicare and Medicaid Services (CMS) recently announced, as part of the President Bush’s Electronic Government Initiative (E-Gov), that comments on proposed Medicare and Medicaid regulations can be submitted electronically. All electronic comments will be posted on the web site after the comment period closes. For more information and details about the comment period, see www.cms.hhs.gov/media/press/release.

Grants.gov: “One-Stop Shopping” for All Federal Grants

Health and Human Services (HHS) Secretary Tommy Thompson announced in a December 9 press release the initiation of a single web site for finding out about and applying for all federal grants. The web site, www.grants.gov, is part of President Bush’s Electronic Government Initiative (E-Gov). An “Apply for Grants” part of the site is intended to ease the application process. Individuals will be able to download and submit applications from any federal agency. So far the Departments of Commerce, Education, Energy, Justice, and HHS have put postings on the site, and it is expected that the section will be expanded in the coming months. (www.hhs.gov/news/press/2003pres/20031209.html)