Medicaid plays a key role in financing behavioral health care, including mental health and substance use disorder services. As of 2014, many previously uninsured adults are newly eligible for Medicaid in states that choose to implement the Affordable Care Act’s (ACA) coverage expansion or for subsidized coverage through a Marketplace qualified health plan (QHP). People with behavioral health diagnoses will need clear information about which services specifically are and are not covered to make meaningful comparisons among plans when shopping for coverage.

This issue brief analyzes specific specialty behavioral health services covered by state Medicaid programs and Marketplace QHPs in four states: Arizona, Colorado, Connecticut, and Michigan. We analyzed a total of 8 Medicaid program benefit packages and 105 Marketplace QHPs. We identify similarities and differences in Medicaid and Marketplace coverage of behavioral health services across the four study states as well as similarities and differences in behavioral health coverage between Medicaid and Marketplace QHPs generally within each state and between different QHPs within each state.

Key findings are summarized in Executive Summary Table 1 and include the following:

• While a large portion of the behavioral health services in this analysis are covered by both state Medicaid programs and Marketplace QHPs, Medicaid coverage of these services is generally more comprehensive than QHPs. Overall, Medicaid coverage of specialty behavioral health services in the four study states is very comprehensive, even though particular services may not be covered by every state’s Medicaid program. For example, all four states’ Medicaid programs covered psychiatric hospital visits, case management, day treatment, psychosocial rehabilitation, psychiatric evaluation, psychiatric testing, medication management, individual therapy, group therapy, family therapy, inpatient detoxification, methadone maintenance, and smoking and tobacco cessation services. By contrast, the only services covered by all Marketplace QHPs in the 4 study states were psychiatric hospital visits and smoking and tobacco cessation services. No QHPs covered psychosocial rehabilitation or adult group home services (the latter are covered by 2 states’ Medicaid programs).
• Medicaid coverage of behavioral health services for newly eligible adults in the four study states generally aligns with coverage for other Medicaid beneficiaries. Behavioral health coverage is comparable – mostly by state design – for beneficiaries eligible for traditional Medicaid and those newly eligible under the ACA’s Medicaid expansion.
• Marketplace QHPs in the four study states provide behavioral health coverage but are generally less clear about the specific services covered as compared to Medicaid. Across the four study states, Marketplaces QHPs explicitly cover many specialty behavioral health services, but QHPs provide general coverage statements rather than an exhaustive list of covered services. In addition, QHPs are silent about coverage for a number of specialty behavioral health services, and several QHPs exclude or limit important behavioral health services, such as residential treatment, treatment of chronic conditions, and substance use disorder medication management.
• Coverage of behavioral health services in Marketplace QHPs in the four study states varies by insurer, but this coverage does not vary by metal tier in QHPs offered by a given insurer within a state’s Marketplace.

Looking Ahead

The information presented in this analysis can help insurance shoppers, particularly those eligible for Marketplace QHPs and those transitioning between Medicaid and Marketplace coverage, and policymakers to better understand the scope of coverage and information available when choosing plans. It will be important to monitor coverage of specialty behavioral health services in QHP plan documents and in the actual experience of plan enrollees seeking services as well as the impact on consumers who move from Medicaid to Marketplace coverage as their income increases in terms of their ability to access necessary specialty behavioral health services and any gaps in access to needed services on which beneficiaries rely to support their recovery and ability to work. The relative newness of the Marketplace QHP coverage option, coupled with a lack of information in QHP documents about coverage of specific services, increases the potential for confusion or misunderstanding about the scope of benefits available for adults with behavioral health needs. This may be especially important as this population needs certain specialty behavioral health services that historically have not been covered by typical private insurance plans. More QHPs than noted in our analysis may in fact cover certain services, but the lack of explicit coverage statements in publicly available plan documents in many cases made it difficult to determine whether a specific service was or was not covered. As policymakers and beneficiaries gain more experience with the new ACA coverage options, further study in this area could examine questions such as the extent of behavioral health needs among newly eligible Medicaid adults and QHP enrollees, which behavioral health services are used by these populations, and the impact of cost-sharing obligations on access to necessary services.

Behavioral health encompasses both mental illnesses and substance use disorders. In 2013, an estimated 10 million adults (or 4.2 percent of all adults) had a mental illness that seriously impaired their functioning (serious mental illness, SMI),¹  and an estimated 20.3 million adults (8.5 percent) had a substance use disorder involving alcohol or illicit drugs in the past year.²  There is some overlap between these groups, with 2.3 million adults (23.1 percent of adults with SMI in the past year) experiencing SMI co-occurring with a substance use disorder.³  SMI includes a range of conditions, such as anxiety disorders, bipolar disorder, major depression, schizophrenia, and post-traumatic stress disorder.

Medicaid plays a key role in financing behavioral health services, accounting for 26% of spending on behavioral health care nationally.⁴  Examples of behavioral health services include psychotherapy, prescription drugs, day treatment, case management, crisis intervention, peer support, assertive community treatment, and supported employment. Prior to the implementation of the Affordable Care Act’s (ACA) coverage expansion, in 2009, 35 percent of non-elderly adult Medicaid beneficiaries had a chronic behavioral health condition, likely reflecting Medicaid eligibility rules that extend coverage to people with substantial health needs.⁵ 

However, not all adults with behavioral health diagnoses receive treatment services. In 2013, 11 million adults (4.6 percent of all adults) reported an unmet need for mental health care in the past year, with 5.1 million of these adults receiving no mental health services during that time. Of these 5.1 million adults, the most common reason cited for foregoing services was the inability to afford the cost.⁶  Also in 2013, 22.7 million persons aged 12 or older needed treatment for an illicit drug or alcohol use problem (8.6 percent of persons aged 12 or older). Of these individuals, 20.2 million persons (7.7 percent of the population aged 12 or older) needed treatment for an illicit drug or alcohol use problem but did not receive treatment in the past year. The most common reason cited for not receiving substance use treatment was no health care coverage and inability to afford cost of the treatment.⁷ 

People may be unable to afford the cost of health care because they are uninsured. While lower than the prevalence among Medicaid beneficiaries, a sizeable share — 13 percent — of low-income non-elderly uninsured adults had a chronic behavioral health condition in 2009.⁸  The actual rate of behavioral health conditions among uninsured adults may be even higher, as this population is more likely than those with coverage to have undiagnosed chronic illnesses.⁹ 

As of 2014, many previously uninsured adults may be newly eligible for Medicaid in states that choose to implement the ACA’s coverage expansion or for subsidized coverage through a qualified health plan (QHP) in the Marketplace.¹⁰  As additional people become insured under the ACA, policymakers and other stakeholders can be helped by a better understanding of the benefits and challenges that adults with behavioral health needs are likely to experience when applying for coverage through Medicaid, selecting an individual plan on the Marketplace, or moving between Medicaid and Marketplace coverage as their income changes. People with behavioral health diagnoses will need clear information about which services specifically are and are not covered to make meaningful comparisons among plans when shopping for coverage.

This issue brief analyzes specific specialty behavioral health services covered by state Medicaid programs (including the benefit packages for adults newly eligible for Medicaid under the ACA’s expansion) and Marketplace QHPs in four states: Arizona, Colorado, Connecticut, and Michigan. We identify similarities and differences in Medicaid and QHP coverage of behavioral health services across these states as well as similarities and differences in behavioral health coverage between Medicaid and QHPs generally and between different QHPs within each state. Detailed coverage information for all plans analyzed in each study state is included in Appendix A, and Appendix B provides brief background about each state’s Medicaid program.

Medicaid Behavioral Health Services

Behavioral health benefits are not a specifically enumerated service required to be provided by states to adult¹¹  Medicaid beneficiaries under the state plan benefit package.¹²  Nevertheless, states can and do cover behavioral health services under various mandatory and optional Medicaid state plan benefit categories, such as inpatient, outpatient, physician, other licensed practitioner, federally qualified health center, pharmacy, clinic, case management, and health home services.¹³  (Due to a long-standing payment exclusion in federal law, Medicaid reimbursement is unavailable for inpatient services provided in “institutions for mental disease” (IMD) for adults ages 22-64.¹⁴ ) Medicaid’s rehabilitation services option is a major source of behavioral health coverage, with all states offering some amount of behavioral health services through this state plan category as of 2013.¹⁵  In FY 2011, 78% of beneficiaries receiving Medicaid rehabilitation services had a mental health diagnosis, and 76% of spending for Medicaid rehabilitation services was devoted to those with a mental health diagnosis.¹⁶ 

Adults newly eligible for Medicaid under the ACA’s expansion must receive an alternative benefit plan (ABP), which, at state option, may or may not include all of the services covered by the traditional Medicaid state plan benefit package.¹⁷  ABP coverage is based on a commercial health insurance plan or otherwise approved by the Health and Human Services Secretary. Unlike Medicaid state plan benefit packages, ABPs must cover all of the ACA’s essential health benefits, including behavioral health services.¹⁸  Beneficiaries who are “medically frail,” including newly eligible adults, are exempt from mandatory ABP enrollment and instead must have access to the full Medicaid state plan benefit package, to the extent that it differs from the new adult ABP; however, medically frail beneficiaries may choose to enroll in the ABP.¹⁹  The federal definition of “medically frail” includes “individuals with disabling mental disorders (including. . . adults with serious mental illness) [and] individuals with chronic substance use disorders.”²⁰  Many states are offering their traditional Medicaid state plan benefit package to newly eligible adults to avoid having to determine which new adults qualify as medically frail.²¹ 

States provide behavioral health services either through a fee-for-service (FFS) or managed care delivery system. If beneficiaries are required to enroll in capitated managed care, they generally must have a choice of at least two managed care organizations (MCOs). States also may carve-out behavioral health services (beyond simple physician services) to a specialty behavioral health managed care entity. For example, in our analysis, Arizona, Colorado, and Michigan use pre-paid inpatient health plans (PIHPs) to deliver specialty behavioral health services on a capitated basis (see Appendix B for additional detail).

The ACA requires that Medicaid ABPs provide behavioral health services in parity with physical health services, consistent with the Mental Health Parity and Addiction Equity Act.²²  Specifically, quantitative treatment limitations, cost-sharing obligations, medical necessity criteria, and out-of-network coverage standards for behavioral health benefits must be no more restrictive than those for medical/surgical benefits when both types of services are covered by a health plan. Current federal mental health parity requirements apply to Medicaid MCOs and to Medicaid ABPs but not to other Medicaid services delivered on a FFS basis. Previously, CMS had encouraged, but not required, states to apply mental health parity to PIHPs and PAHPs.²³  In proposed regulations issued in April 2015, CMS would require parity for state Medicaid programs’ MCO enrollees, across all delivery systems that provide services to MCO enrollees, including PIHPs, PAHPs, and FFS. CMS also proposed regulations to implement parity for ABP enrollees, regardless of delivery system.²⁴  CMS continues to encourage, but not require, parity in FFS benefits that are not delivered to MCO or ABP enrollees. Consequently, there may be different utilization limits or other restrictions on services that affect parity depending on the type of delivery system through which services are provided.

Marketplace Behavioral Health Services

The ACA provided for the creation of Marketplaces to facilitate the purchase of QHPs by individuals and small businesses. The Marketplace in each state may be operated by the state or the federal government or in partnership between the state and federal government. Marketplaces allow consumers to compare and shop for health plans and are the mechanism through which premium tax credits (for people with income from 100-400% of the federal poverty level (FPL), $11,770-$47,080 per year for an individual in 2015) and cost-sharing reductions (for people with income from 100-250% FPL, $11,770-29,425 per year for an individual in 2015) (for silver-level plans) are administered. (People with income between 100-138% FPL ($11,770-$16,243 per year for an individual in 2015) who qualify for Medicaid are ineligible for Marketplace subsidies.)

Behavioral health services are one of the ACA’s 10 categories of essential health benefits and thus must be included in QHP benefit packages.²⁵  (EHB requirements also apply to health plans sold in the individual and small group markets outside the Marketplace.) Federal regulations require the selection of a benchmark plan to define EHBs in each state and to which a QHP’s covered benefits must be substantially equivalent.²⁶  States had the option to select a benchmark plan from among the largest small-group plan by enrollment, one of the three largest health plans offered to state employees, one of the three largest federal employee health plans, or the health maintenance organization with the largest commercial non-Medicaid enrollment in the state.²⁷  If states did not make a selection, the benchmark plan defaulted to the largest small group plan. States have broad leeway to further define the scope of services required to be covered by QHPs. In addition, federal mental health parity requirements (described above) apply to all QHPs.²⁸ 

 

This project analyzed specific specialty behavioral health services available in state Medicaid programs and Marketplace QHPs in the individual market in four states: Arizona, Colorado, Connecticut, and Michigan. (Our analysis excludes small-group policies available on the Marketplaces.) These four states represent various geographic regions of the country and span the variety of Marketplace models, including State-based Marketplaces (Colorado and Connecticut), Federally-facilitated Marketplace (Arizona), and state Partnership Marketplace (Michigan). All four states have expanded Medicaid to newly eligible adults under the ACA (with Michigan’s expansion effective in April 2014). Additional detail about the methodology is provided at the end of this brief.

We examined particular specialty behavioral health services in the four study states as these are the services that adults with behavioral health needs are most likely to require, and these services may vary by coverage type (Medicaid vs. Marketplace) and among QHPs, may differ by plan or insurer. They include services that are specifically designed to treat behavioral health conditions; providers in this sector include physicians, such as psychiatrists, and non-physician mental health providers, such as psychologists, social workers, counselors, and psychiatric nurses.²⁹  We did not focus on general service categories that have overlap between physical and behavioral health care (e.g., physician services, prescription drugs, home health services) and that may be provided by non-mental health providers, such as primary care physicians. We analyzed each state’s Medicaid program and 105 Marketplace QHPs. We examined benefits information to determine similarities and differences in behavioral health services coverage in Medicaid and the Marketplace across the four states. We also identified similarities and differences in specialty behavioral health services within a given state, both between Medicaid and Marketplace QHPs generally and between different QHPs offered in a given state’s Marketplace. Our findings are illustrative of the similarities and differences in behavioral health coverage across and within states, and specifics in other states will vary. Our analysis does not focus on any utilization limitations on coverage of specific services or on any required cost-sharing, which particularly for QHPs, may limit access to services even if services are covered.

The four states in this analysis all provide behavioral health services to all Medicaid beneficiaries (including newly eligible adults), although the particular services offered differed across the states. In states that have not opted to align their new adult ABP with their Medicaid state plan benefit package, there may be differences in specific services covered depending on the beneficiary’s Medicaid coverage pathway.³⁰ 

Our analysis classifies adult specialty behavioral health services into four categories: institutional and intensive services, outpatient facility services, outpatient provider services, and substance use disorder treatment services. Numerous discrete behavioral health services are mapped to these four categories, as listed in Table 1.

 

Medicaid Coverage of Behavioral Health Services

Overall, Medicaid coverage of specialty behavioral health services in the four study states is very comprehensive, even though particular services may not be covered by every state. (This observation refers to a state’s overall Medicaid program, without distinguishing the particular delivery system in which one system for part of a state’s Medicaid population, such as a PIHP, may cover one service listed here, while another system for another segment of the population, such as FFS, may not.) Medicaid benefits are largely determined by state policy choices as outlined in the state’s Medicaid plan, within the minimum requirements provided in federal law. In the institutional care and intensive services category, all four states covered psychiatric inpatient hospital visits (in non-IMD settings for most adults), and three states (all but Michigan) covered psychiatric residential services. Connecticut and Michigan allowed for 23-hour observation, and Arizona and Connecticut covered adult group home services. Most states covered the majority of outpatient facility services (e.g., case management, day treatment, psychosocial rehabilitation, partial hospitalization), although it appears that Arizona does not cover two particular relatively common services in this category: partial hospitalization and intensive outpatient mental health services. All four states covered all of the outpatient provider services (e.g., individual and family therapy, psychiatric testing) in our analysis. In the substance use disorder treatment category, all four states covered inpatient detoxification, methadone maintenance, and smoking and tobacco cessation services. However, Arizona did not explicitly cover outpatient detoxification or Suboxone treatment, and Colorado did not explicitly cover residential rehabilitation or chemical dependency intensive outpatient services.

All four states covered the following services in their Medicaid programs:

• Psychiatric hospital visits
• Case management services
• Day treatment (community behavioral health program)
• Psychosocial rehabilitation
• Psychiatric services – evaluation and testing
• Medication evaluation, prescription and management
• Psychological testing
• Individual, group and family therapy
• Inpatient detoxification
• Methadone maintenance
• Smoking and tobacco use cessation counseling.

These findings are summarized in Table 2 below and state-specific coverage details are included in the tables in Appendix A.

Behavioral health coverage is comparable – mostly by state design – for beneficiaries eligible for traditional Medicaid and those newly eligible under the ACA’s Medicaid expansion. The four study states chose to align their traditional Medicaid state plan behavioral health benefits and their new adult ABP behavioral health coverage, often intentionally to reduce the effects of churning between different Medicaid coverage groups.

Marketplace Coverage of Behavioral Health Services

Across the four study states, Marketplaces QHPs explicitly cover many specialty behavioral health services. In the four study states, all QHPs analyzed provide inpatient psychiatric hospital services and inpatient substance use services. Most plans explicitly cover individual and group therapy. Many of the plans specifically cover intensive outpatient services, partial hospitalization, residential treatment, and substance use disorder residential rehabilitation services.

However, QHPs provide general coverage statements rather than an exhaustive list of covered services. The QHPs in all four study states include general coverage statements in their plan documents. For example, the documents for a given plan generally state that the QHP covers inpatient and outpatient mental health and substance use disorder services. As plan documents are the most detailed publicly available information about which services will or will not be covered, these general coverage statements make it difficult to determine whether specific services are covered without submission and disposition of an actual claim. Although the QHPs in our analysis mention some specific services, such as partial hospitalization (Arizona, Colorado) and intensive outpatient (Connecticut, Michigan), the plans lack an exhaustive list of covered services, which could prove especially problematic for adults with behavioral health needs seeking to compare QHPs, as it is important for these individuals to know whether their chronic health needs will be met by a given plan.

QHPs are silent about coverage for a number of specific specialty behavioral health services. For example, in Arizona, Colorado, and Connecticut, none of the QHPs explicitly covers or excludes from coverage the following mental health services: 23-hour observation, group home services, mental health rehabilitation, and individual testing. In addition, QHPs in Arizona and Colorado are silent about coverage for inpatient rehabilitation for substance use disorder treatment. In Michigan, QHPs are silent about coverage for psychosocial rehabilitation. Without an explicit coverage statement, it is difficult to determine whether specific services necessary for adults with behavioral health needs will or will not be covered.

Across the four study states, several QHPs exclude or limit important behavioral health services, such as residential treatment, treatment of chronic conditions, and substance use disorder medication management. Four of thirty QHPs in Arizona explicitly exclude coverage for residential treatment and treatment of chronic conditions not subject to favorable modification for those with mental illness. In Colorado, a few plans exclude counseling for those who do not respond to “therapeutic treatment” as stated, but not defined, in the plan document. The determination about whether a beneficiary will respond to therapeutic treatment is left to the discretion of the plan physician. In addition, multiple plans in Colorado exclude coverage of residential treatment, and one plan explicitly excludes coverage of substance use disorder residential treatment including rehabilitative services. In Michigan, two of twenty-eight plans cover residential treatment only for mental health conditions that are likely to show improvement during the admission. Five plans also exclude from coverage treatment for antisocial personality disorder. Further, two plans do not cover treatment for chronic substance abuse conditions. Across the study states, a number of plans limit substance use medication management services. For example, these services only are available during an inpatient stay or for the treatment of withdrawal symptoms. Excluding and/or limiting these important behavioral health services reduces access to care and is likely to negatively impact plan enrollees who need these services.

QHP coverage for behavioral health services varies by insurer; however, coverage does not vary by metal tier in plans offered by a given insurer within the Marketplace. In all four study states, behavioral health coverage and exclusions, as described in the plan documents, for a given insurer often were the same across all plans offered within the state’s Marketplace. Coverage of specific services did, however, vary by insurer, as expected due to rules permitting substitution of actuarially equivalent services within EHB categories. Our findings about QHP coverage of behavioral health services are summarized in Table 3.

Medicaid and Marketplace Coverage of Behavioral Health Services Compared

In general, a large portion of the four categories of behavioral health benefits identified in this analysis are covered through both Medicaid programs and at least some Marketplace QHPs; however, across the four study states, Medicaid coverage of behavioral health services is generally more comprehensive than in QHPs. For example, all four states’ Medicaid programs covered psychiatric hospital visits, case management, day treatment, psychosocial rehabilitation, psychiatric evaluation, psychiatric testing, medication management, individual therapy, group therapy, family therapy, inpatient detoxification, methadone maintenance, and smoking and tobacco cessation services. By contrast, the only services covered by all Marketplace QHPs in the 4 study states were psychiatric hospital visits and smoking and tobacco cessation services. No QHPs covered psychosocial rehabilitation or adult group home services (the latter are covered by 2 states’ Medicaid programs).

Medicaid benefit packages are more specific about which benefits are covered, while QHPs tend to provide general coverage statements instead of a list of specific covered services. Consequently, it appears that state Medicaid programs offer more comprehensive behavioral health coverage. However, there are a few exceptions. For example, some QHPs in Arizona specify substance use disorder treatment coverage for partial hospitalization, outpatient detoxification, and residential rehabilitation services whereas the state Medicaid program does not. Therefore, it seems that Arizona QHP coverage for substance use services is more comprehensive than Arizona’s Medicaid program. Further, some Michigan QHPs specify coverage of more services than the state Medicaid program (e.g., residential treatment facility, intensive outpatient, individual testing, family therapy).

As noted above, QHP behavioral health coverage is generally less clear about which specific services are covered than that available in Medicaid, with QHPs generally lacking an exhaustive list of covered services. While QHPs cover many general categories of specialty behavioral health services, it is difficult to determine definitively which specific services are covered. General coverage statements, silence about coverage of certain services, and the lack of an exhaustive benefit coverage list make it almost impossible to determine whether specific services are covered by a given QHP without submission and disposition of an actual claim.

Moving forward, the information presented in this analysis can help insurance shoppers, particularly those eligible for Marketplace QHPs and those transitioning between Medicaid and Marketplace coverage, and policymakers to better understand the scope of coverage and information available when choosing plans. As the state Medicaid plan benefit packages in this analysis seem to be more comprehensive in their coverage of specialty behavioral health services than QHPs, it will be important to monitor the impact on consumers who move from Medicaid to Marketplace coverage as their income increases in terms of their ability to access necessary specialty behavioral health services and any gaps in access to services on which beneficiaries rely to support their recovery and ability to work.

In addition, it will be important to monitor coverage of specialty behavioral health services in QHP plan documents and in the actual experience of plan enrollees seeking services. The relative newness of the Marketplace QHP coverage option, coupled with a lack of information in QHP documents about coverage of specific services, increases the potential for confusion or misunderstanding about the scope of benefits available for adults with behavioral health needs. This may be especially important as this population needs certain services that historically have not been covered by typical private insurance plans. More QHPs than noted in our analysis may in fact cover certain services, but the lack of explicit coverage statements in publicly available plan documents in many cases made it difficult to determine whether a specific service was or was not covered.

The lack of transparency about QHP coverage of specialty behavioral health services also may be reflected in QHP coverage of other specialty health care services, which could impact enrollees with other chronic diseases that may require specialized treatment (e.g., Parkinson’s disease, kidney disease and cancer). Marketplace navigators and application counselors/assistors in particular may receive questions from consumers about whether certain services are covered by a QHP or Medicaid, which they may not be able to answer.

As policymakers and beneficiaries gain more experience with the new ACA coverage options, it will be important to study this area further, examining questions such as the extent of behavioral health needs among newly eligible Medicaid adults and QHP enrollees, which behavioral health services are used by these populations, and the impact of cost-sharing obligations on access to necessary services.

To determine which services were covered in each state’s Medicaid program, five primary sources were reviewed: each state Medicaid agency’s website, each state’s Medicaid plan (where available electronically), state plan amendments, applicable waiver documentation available on Medicaid.gov and state Medicaid department websites, state Medicaid policy and provider manuals, and provider covered procedure codes (e.g., CPT and HCPCS), where available by state.

To determine the available QHPs in a state, three primary sources were reviewed: the healthcare.gov website, the respective insurer’s website, and each state’s System for Electronic Rate and Form Filing (SERFF) portal (where available). A representative sample of plans was then selected based on their Marketplace premium. Platinum and gold plans with the highest actuarial values of 90 and 80 percent, respectively; silver plans with 70 percent actuarial value;³¹  and bronze plans with 60 percent actuarial value were selected for review. The health insurance plan documents and summary of benefits were analyzed for behavioral health (including mental health and substance use) benefit coverage for adults ages 21-64. Each plan was examined for both inpatient and outpatient behavioral health service coverage.

ARIZONA

Colorado

CONNECTICUT

MICHIGAN

Arizona

Most Medicaid beneficiaries in Arizona receive acute care services through a capitated managed care organization (MCO). (One exception is for those who receive services through a long-term care contractor for seniors and people with developmental or physical disabilities.) MCO primary care providers may prescribe psychotropic medications and provide medication adjustment and monitoring services for MCO enrollees with depressive, anxiety, or attention deficit hyperactivity disorders.³²  Otherwise, Medicaid beneficiaries must receive behavioral health services through regional behavioral health authorities, which carve out these services from the acute care MCOs and are the primary delivery system for Medicaid behavioral health care in Arizona.³³ 

Overall, minimum coverage of behavioral health benefits in Arizona’s Medicaid program is very specific. State documents detail coverage by provider type (e.g., hospital, provider office) and by procedure code.

Arizona intentionally provides its newly eligible adults with the same Medicaid benefit package that other categorically eligible Medicaid beneficiaries receive to minimize disruptions for individuals moving among different Medicaid coverage groups.³⁴  The benchmark plan for purposes of essential health benefits (EHBs) in both the Marketplace and the Arizona Medicaid ABP for newly eligible adults is the State’s employee health benefit plan.

Colorado

With few exceptions, all Colorado Medicaid beneficiaries must obtain behavioral health services through their assigned behavioral health organization (except for Medicare-covered mental health services and emergency care), which is a capitated prepaid inpatient health plan.³⁵ 

Colorado’s ABP includes the same services as those available in traditional Medicaid, plus additional preventive services and habilitative services.³⁶  Colorado uses the same base benchmark plan (i.e., Kaiser Deductible/Coinsurance HMO 1200D) to determine EHBs in its new adult ABP and in the Marketplace, to ease transitions between Medicaid and Marketplace coverage.³⁷ 

Connecticut

Connecticut’s Medicaid program provides all behavioral health services on a fee-for-service basis and contracts with an administrative services organization (ASO) to oversee and coordinate these services. All Medicaid coverage groups receive essentially the same services.³⁸  Broadly categorized, these include inpatient mental health, inpatient substance use disorder treatment, institutional treatment, outpatient mental health, and outpatient substance use disorder treatment. Overall, behavioral health coverage in Connecticut’s Medicaid program is quite thorough and detailed by treatment setting (e.g., hospital, provider office) and by procedure code.³⁹  Some services require prior authorization from the ASO.

In addition, Connecticut was awarded a five year grant under the CMS Medicaid Incentives for Prevention of Chronic Diseases program to provide tobacco cessation services and participation incentives to beneficiaries who smoke and have SMI (among other target groups).⁴⁰  Connecticut is the only study state participating in this grant program, although other states outside our analysis are participating in the program and targeting beneficiaries with SMI and another chronic condition.

Connecticut chose Secretary-approved coverage as the basis for its new adult ABP and used duplication and substitution to align the new adult ABP with the state plan benefit package.⁴¹  For purposes of EHBs in the Marketplace, Connecticut used the Blue Cross and Blue Shield Service Benefit Plan—Basic Option as its benchmark, a Federal Employee Health Benefit Plan option.⁴² 

Michigan

Michigan provides behavioral health services through its traditional FFS program, Medicaid managed care organizations (MCOs), and PIHPs. Generally speaking, the delivery system through which a beneficiary accesses services depends on the severity of behavioral health condition. The MCOs and FFS program provide outpatient services to treat mild and moderate conditions.⁴³  MCOs are required to cover up to 30 outpatient mental health visits per calendar year, although they may contract with PIHPs to provide these services.⁴⁴  MCOs are not required to provide inpatient or outpatient primary diagnosis substance use disorder services; instead, these services are provided FFS or through PIHPs.⁴⁵  Medicaid beneficiaries with SMI who require benefits exceeding those provided by the FFS or MCOs receive specialty services delivered by PIHPs.⁴⁶ 

Michigan’s Medicaid behavioral health benefits are outlined in the state’s Medicaid provider manual, which lists covered services and types of providers allowed to bill for specified services. The covered services are essentially equivalent for new adults and traditional Medicaid populations.⁴⁷  For purposes of determining EHBs, Michigan chose the largest small group insurance plan in the State, the Priority Health HMO, for both its new adult ABP and Marketplace benchmark.

1. Substance Abuse and Mental Health Services Administration (SAMHSA), Results from the 2013 National Survey on Drug Use and Health: Mental Health Findings at 12 (2013), available at http://www.samhsa.gov/data/sites/default/files/NSDUHmhfr2013/NSDUHmhfr2013.pdf. ↩︎
2. Id. at 50. ↩︎
3. Id. ↩︎
4. Mark TL, Levit KR, Yee T, and Chow CM, “Spending on mental and substance use disorders projected to grow more slowly than all health spending through 2020.” 33 Health Affairs 1407-15 (Aug. 2014), available at http://content.healthaffairs.org/content/33/8/1407.abstract?sid=1e1a3e1e-7024-4836-bfab-bc68f1f32277. ↩︎
5. Kaiser Commission on Medicaid and the Uninsured, The Role of Medicaid for People with Behavioral Health Conditions at 2 (Nov. 2012), available at https://modern.kff.org/health-reform/fact-sheet/the-role-of-medicaid-for-adults-with/. ↩︎
6. Substance Abuse and Mental Health Services Administration (SAMHSA), Results from the 2013 National Survey on Drug Use and Health: Mental Health Findings at 24 (2013), available at http://www.samhsa.gov/data/sites/default/files/NSDUHmhfr2013/NSDUHmhfr2013.pdf. ↩︎
7. Substance Abuse and Mental Health Services Administration (SAMHSA), Results from the 2013 National Survey on Drug Use and Health: Summary of National Findings at 93 (2013), available at http://www.samhsa.gov/data/sites/default/files/NSDUHresultsPDFWHTML2013/Web/NSDUHresults2013.pdf. ↩︎
8. Kaiser Commission on Medicaid and the Uninsured, The Role of Medicaid for People with Behavioral Health Conditions at 2 (Nov. 2012), available at at https://modern.kff.org/health-reform/fact-sheet/the-role-of-medicaid-for-adults-with/. ↩︎
9. Id. (internal citation omitted). ↩︎
10. One study predicted that Medicaid enrollment for non-elderly adults with SMI would nearly double with implementation of the ACA’s expansion (estimated 24.5% of Medicaid beneficiaries in 2019, compared to 12.8% in 2006), with 31% of previously uninsured adults with SMI becoming newly eligible for Medicaid. However, this study pre-dates the Supreme Court’s ruling on the ACA’s constitutionality, which effectively made implementation of the Medicaid expansion a state option (Kaiser Commission on Medicaid and the Uninsured, A Guide to the Supreme Court’s Decision on the ACA’s Medicaid Expansion (Aug. 1, 2012), available at https://modern.kff.org/health-reform/issue-brief/a-guide-to-the-supreme-courts-decision/).   To date, 30 states (including DC) have implemented the ACA’s Medicaid expansion (Kaiser Commission on Medicaid and the Uninsured, Status of State Action on the Medicaid Expansion Decision (April 29, 2015), available at https://modern.kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/). The same study predicted that 28% of previously uninsured adults with SMI would become eligible for private insurance under the ACA. Rachel Garfield, Judith Lave, and Julie Donohue, Health Reform and the Scope of Benefits for Mental Health and Substance Use Disorder Services, 61 Psychiatric Services, 1081-1086 (Nov. 2010). ↩︎
11. Medicaid beneficiaries from birth through age 21 qualify for comprehensive coverage, including behavioral health services, under the mandatory Early Periodic Screening Diagnosis and Treatment benefit. 42. U.S.C. § § 1396a(a)(43), 1396d(r)(5). ↩︎
12. Cf. 42 C.F.R. § § 440.210, 440.220. ↩︎
13. 42 U.S.C. § 1396a(a)(1); 1396d(a); see generally Kaiser Commission on Medicaid and the Uninsured, Medicaid Enrollment and Expenditures by Federal Core Requirements and State Options (Jan. 2012), available at https://modern.kff.org/medicaid/issue-brief/medicaid-enrollment-and-expenditures-by-federal-core/. States also may provide behavioral health services through § 1915(c) home and community-based services waivers, which are outside the scope of this analysis. ↩︎
14. CMS recently proposed that states may make capitation payments to MCOs and PIHPs for enrollees receiving services of no more than 15 days per month in an IMD that is an inpatient hospital facility or sub-acute facility providing crisis residential services. Proposed 42 C.F.R. § 438.3(u). CMS proposes this change in the capitated managed care context to address difficulties with beneficiary access to short-term inpatient behavioral health treatment and to recognize managed care plans’ flexibility in providing care in alternate settings in lieu of those covered by statute. 80 Fed. Reg. _____ (June 1, 2015), available at https://federalregister.gov/a/2015-12965. ↩︎
15. See, e.g., SAMHSA, Medicaid Handbook: Interface with Behavioral Health Services at 3-5 (2013), available at http://store.samhsa.gov/shin/content/SMA13-4773/SMA13-4773_Mod1.pdf. ↩︎
16. Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on data from FY 2011 MSIS and CMS-64 reports. 2010 data was used for FL, KS, ME, MD, MT, NM, NJ, OK, TX, and UT and then adjusted to 2011 spending levels. ↩︎
17. 42 U.S.C. § 1396a(k)(1). The statute uses the former terminology, “benchmark benefits.” In its July 2013 final rule, CMS began using the term “ABP.” 78 Fed. Reg. 42160 (July 15, 2013); see generally 42 U.S.C. § 1396u-7; 42 C.F.R. § § 440.300-440.390. ↩︎
18. 42 C.F.R. § 440.345(d). ↩︎
19. 42 U.S.C. § 1396a(k)(1); 42 C.F.R. § 440.320. Technically, beneficiaries in the new adult expansion group who meet an ABP exemption “must be given the option of an Alternative Benefit Plan that includes all benefits available under the approved State plan” instead of being required to receive the ABP that the state has selected for the expansion group. 42 C.F.R. § 440.315. ↩︎
20. 42 C.F.R. § 440.315(f). ↩︎
21. HHS, Office of the Assistance Secretary for Planning and Evaluation, Office of Disability, Aging and Long-Term Care Policy, How the Affordable Care Act Can Support Employment for People with Mental Illness at 3 (May 2014), available at http://www.aspe.hhs.gov/daltcp/reports/2014/ACAmiesIB.cfm. ↩︎
22. 42 C.F.R. § 440.345(c); see also CMS, State Health Official Letter re: Application of the Mental Health Parity and Addiction Equity Act to Medicaid MCOs, CHIP, and Alternative Benefit (Benchmark) Plans (Jan. 16, 2013), available at http://www.medicaid.gov/Federal-Policy-Guidance/downloads/SHO-13-001.pdf. ↩︎
23. CMS, State Health Official Letter re: Application of the Mental Health Parity and Addiction Equity Act to Medicaid MCOs, CHIP, and Alternative Benefit (Benchmark) Plans (Jan. 16, 2013), available at http://www.medicaid.gov/Federal-Policy-Guidance/downloads/SHO-13-001.pdf. ↩︎
24. 80 Fed. Reg. 19420 (April 10, 2015), available at. https://www.federalregister.gov/articles/2015/04/10/2015-08135/medicaid-and-childrens-health-insurance-programs-mental-health-parity-and-addiction-equity-act-of; see also Kaiser Commission on Medicaid and the Uninsured, Behavioral Health Parity and Medicaid (forthcoming, 2015). ↩︎
25. 45 C.F.R. § 147.150(a); see also 42 U.S.C. § 18022(b). ↩︎
26. 45 C.F.R. § 156.100. ↩︎
27. 45 C.F.R. § 156.100(a). ↩︎
28. 45 C.F.R. § 147.160; see also ACA § 1311(j). ↩︎
29. See Kaiser Commission on Medicaid and the Uninsured, Mental Health Financing in the United States: A Primer at 3 (April 2011), available at https://modern.kff.org/medicaid/report/mental-health-financing-in-the-united-states/. ↩︎
30. See, e.g., Kaiser Commission on Medicaid and the Uninsured, Benefits and Cost-Sharing for Working People with Disabilities in Medicaid and the Marketplace (Oct. 2014), available at https://modern.kff.org/medicaid/issue-brief/benefits-and-cost-sharing-for-working-people-with-disabilities-in-medicaid-and-the-marketplace/. ↩︎
31. This measure was selected due to the availability of subsidies. ↩︎
32. Arizona Health Care Cost Containment System, Medical Policy Manual, ch. 300, Policy 310, p. 310-2. ↩︎
33. CMS, Special Terms and Conditions, Arizona Health Care Cost Containment System Section 1115 Demonstration at 11, available at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/az/Health-Care-Cost-Containment-System/az-hccc-stc-10012011-09302016-amended-042013.pdf. ↩︎
34. CMS, Letter to Tom Betlach, Director, AHCCCS (April 1, 2014) and State Plan Amendment AZ-14-0006, available at www.medicaid.gov. ↩︎
35. Colorado Dep’t of Health Care Pol’y & Financing, Community Behavioral Health Services Program, available at http://www.colorado.gov/cs/Satellite?c=Page&cid=1212398231156&pagename=HCPR%2FHCPFLayout; Colorado Medical Assistance Program, Colorado 1500 Specialty Manuals at p. 5, available at http://www.colorado.gov/cs/Satellite?c=Document_C&childpagename=HCPF%2FDcoument_C%2FHCPFAddLink&cid-1210237704667&pagename=HCPFWrapper. ↩︎
36. CMS, Colorado SPA CO-13-0055, (February 10, 2014), available at medicaid.gov. ↩︎
37. CMS, Letter to Susan E. Birch, Executive Director, Dep’t of Health Care Pol’y and Financing (Feb. 10, 2014) and SPA CO-13-0055, available at www.medicaid.gov. ↩︎
38. See http://www.ctbhp.com/about.htm. ↩︎
39. See, e.g., http://www.ctbhp.com/providers/covrdsrvcs/CTBHP_Covered_Services.pdf. ↩︎
40. See http://innovation.cms.gov/initiatives/MIPCD/MIPDC-The-States-Awarded.html. ↩︎
41. Connecticut SPA 14-008, available at www.medicaid.gov. ↩︎
42. Id. at 7. ↩︎
43. Michigan Dep’t of Comm’y Health, Medicaid Provider Manual: Mental Health/Substance Abuse, p. 3-4 (April 1, 2014), available at http://www.mdch.state.mi.us/dch-medicaid/manuals/MedicaidProviderManual.pdf. ↩︎
44. Michigan Dep’t of Comm’y Health Medicaid Provider Manual: Medicaid Health Plans, p. 7 (April 1, 2014), available at http://www.mdch.state.mi.us/dch-medicaid/manuals/MedicaidProviderManual.pdf.). Medicaid health plans are required to cover inpatient hospitalization due to complications of a substance use disorder, where substance use is a secondary diagnosis. Id. at 8. ↩︎
45. Id. at 8. ↩︎
46. Id. at 1. ↩︎
47. CMS, Michigan SPA 14-0001 (April 30, 2014), available at www.medicaid.gov. ↩︎

Eighteen states are currently participating in the Medicaid Balancing Incentive Program (BIP) to increase access to home and community-based services (HCBS) as an alternative to institutional care. Established by the Affordable Care Act, BIP authorizes $3 billion in enhanced federal funding from October 2011 through September 2015. As a condition of participation in BIP, states must implement certain structural changes and reach specific financial benchmarks by September 2015, spending at least 25 percent (1 state) or 50 percent (the remainder of states) of their total Medicaid long-term services and supports (LTSS) dollars on HCBS. During the summer of 2014, the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured surveyed BIP states about basic program information, progress with implementing the BIP structural requirements, stakeholder engagement, evaluation activities, and the use of enhanced federal funds in support of other Medicaid LTSS rebalancing efforts.

Key findings from the survey include the following:

• States report that BIP is helping them achieve their goal of rebalancing LTSS in favor of HCBS. Medicaid LTSS spending on HCBS increased in all 18 BIP states, with 14 states reporting  spending growth of 25 percent or more between 2009 and 2014 (Figure 1).
• BIP is helping states make further progress in streamlining and standardizing the infrastructure that facilitates beneficiary access to HCBS by establishing a no wrong door/single entry point system, conflict-free case management, and a core standardized assessment.
• BIP supports LTSS rebalancing efforts by building on existing Medicaid HCBS options available to states. For example, seventeen states used BIP funds to expand Medicaid HCBS waivers by adding slots or services.
• States report some common challenges encountered to date related to measuring quality, coordinating with capitated managed LTSS delivery systems, and implementing the required structural reforms.
• While BIP has helped states make progress in LTSS rebalancing, the time-limited nature of the program creates some challenges and leaves open questions about its future.

States are making progress under BIP towards a more unified person-centered LTSS system. The availability of enhanced funding is increasing access to HCBS, and BIP funds are creating the opportunity to build upon existing Medicaid LTSS rebalancing efforts already underway, including Money Follows the Person.  The structural reform requirements are helping to streamline access to and information about LTSS and reduce administrative inefficiencies that existed in many states’ eligibility determination processes. Collectively, these system reform efforts are helping states reach a desired goal of serving Medicaid beneficiaries with LTSS needs in the most integrated setting. After BIP ends in September 2015, further work will be needed to maintain the costs of the structural changes and to monitor how they are working, particularly within the context of managed care delivery systems.

Introduction

Developing and expanding home and community-based alternatives to institutional care is a priority for many state Medicaid programs, and significant progress has been made over the last twenty years to increase the percentage of long-term services and supports (LTSS) dollars that go toward providing HCBS (Figure 2).  The Affordable Care Act (ACA) established the Medicaid Balancing Incentive Program (BIP) as one option available to states to further support LTSS rebalancing efforts.

As of May 2015, eighteen states are participating in BIP (Figure 3).  Twenty-one of 38 eligible states were approved for BIP; however, three states are no longer participating. BIP authorizes $3 billion in enhanced federal funding from October 2011 through September 2015 for the provision of new or expanded home and community-based services (HCBS) as an alternative to institutional care.

Under BIP, states that devoted less than 50 percent of their total Medicaid LTSS spending to HCBS in Fiscal Year (FY) 2009 are eligible for an enhanced Federal Medical Assistance Percentage (FMAP) for all Medicaid HCBS provided from October 2011 through September 2015. States that spent less than 25 percent (1 state) must adopt a target of 25 percent of total LTSS spending on HCBS by September 2015, and can receive a five percent increase in their FMAP. States that spent between 25 to 50 percent of their Medicaid LTSS dollars on HCBS (the remainder of states) must adopt a target of 50 percent of total LTSS spending on HCBS and are eligible to receive a two percent increase (Figure 4). BIP states must use the enhanced federal funds to expand or enhance HCBS and may not adopt more restrictive eligibility standards than were in place on December 31, 2010.¹ 

In addition to reaching the financial benchmarks, states participating in BIP must make the following three structural changes in their Medicaid LTSS delivery systems:

• A “no wrong door”/single entry point system (NWD/SEP) for all LTSS;
• Conflict-free case management (CFCM) services (to avoid conflicts among agencies that provide both individual assessments and service delivery); and
• A core standardized assessment (CSA) instrument to determine eligibility for HCBS.² 

Methodology

During the summer of 2014, the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured surveyed BIP states about basic program information, progress with implementing the BIP structural requirements, stakeholder engagement, evaluation activities, and the use of enhanced federal funds in support of other Medicaid LTSS rebalancing efforts. Each state approved to participate in BIP as of September 2014 (21 states) received the written survey instrument, and 17 states (81%) submitted a complete questionnaire. Of the 17 states that responded, 16 states are currently participating in BIP, and one state (LA) is no longer participating. Four states (AR, GA, IN, and NE) opted not to participate in the survey; Indiana indicated its intent to withdraw from BIP, and Nebraska was newly approved in September 2014, but has since withdrawn from BIP. Given that states were at various stages of implementation during the survey period (May through August 2014), not all of the survey questions were applicable to every state’s program. States ineligible to participate in BIP (12 states and DC) as well as states that were eligible but not participating (17 states) were not surveyed. The data summarized here were provided directly from BIP Project Directors and other state staff. The full survey instrument can be found in Appendix A of this report.

Key Findings

1. States report that BIP is helping them achieve their goal of rebalancing LTSS in favor of HCBS.

States’ motivations for pursuing BIP were to gain access to enhanced federal funding to support HCBS, improve their LTSS eligibility determination and service planning infrastructure, and expand access to Medicaid LTSS relative to institutional services.

BIP represents a significant funding opportunity for LTSS delivery reform and rebalancing LTSS expenditures. States cited the ability to access the enhanced federal match as a major motivation for pursuing BIP. States, such as Connecticut and Maryland, that are taking advantage of the Community First Choice (CFC) option, with its own enhanced funding, also have the ability to stack enhanced FMAPs and further LTSS rebalancing efforts.

Project Directors reported that BIP provided an opportunity to fund some needed infrastructure changes and quality improvement efforts, including the CSA and the NWD/SEP system. BIP has enabled states to streamline access to and information about community services and supports through implementation of the required structural changes. For example, states noted that by implementing a standardized assessment tool, individuals would not have to go through multiple assessment processes associated with different waivers to find the one that best meets their needs.

States provided examples of how BIP supported structural reforms in their LTSS systems, such as the following:

Illinois cited the policy expertise and access to technical assistance available through BIP as a major motivation for pursuing BIP and providing critical resources to adopt and implement structural changes in the state’s LTSS system.

Connecticut reported that BIP helped the state focus on building consensus across departments to develop a NWD/SEP system and common assessment tool.

States also reported that BIP helped them expand access to HCBS in lieu of institutional services.  For example, Illinois stated that BIP helped facilitate the implementation of consent decrees resulting from three Olmstead class action lawsuits impacting Medicaid beneficiaries residing in institutional settings. The settlements resulted in additional funds devoted to transition assistance and other HCBS so that individuals can live in the most integrated community-based setting appropriate for their needs.

Medicaid LTSS spending on HCBS increased by more than one quarter in 14 BIP states between 2009 and 2014.

Eighteen states reported positive gains in the amount of Medicaid LTSS spending devoted to HCBS since 2009, with 14 states increasing HCBS spending by at least 25 percentage points between 2009 and the end of 2014 (Figure 5).  Eight states reported already exceeding the target of 50 percent of LTSS spending on HCBS by the fourth quarter of 2014, while the remaining BIP states are making progress toward their spending goal (Table 1). The one state with a 25 percent spending target (MS) reported exceeding its target by the fourth quarter of 2014. Since 2009, the year on which eligibility for BIP was based, Mississippi (111%) and Ohio (86%) havemade the largest gains in the percentage of total LTSS dollars devoted to HCBS.

BIP Project Directors were asked to report on strategies that are helping states reach their Medicaid HCBS spending goal (of 25% or 50% of total Medicaid LTSS dollars). The most frequently reported strategy was increasing the number of transitions from institutions to HCBS. Several states cited building upon their Money Follows the Person (MFP) demonstration achievements in rebalancing as helping them make progress toward the goal of increasing spending on HCBS. These achievements included improvements to IT systems and streamlining access to services for beneficiaries. States also reported that increasing the number of HCBS waiver slots and increasing outreach and education efforts around HCBS options were effective approaches to increase both total and relative HCBS spending. Other responses included: financial incentives for managed care organizations (MCOs) to provide increased community capacity, implementation of managed long-term services and supports (MLTSS) programs, institutional payment rate reductions, and implementing CFC.

All BIP states anticipate that the program’s required structural reforms will increase beneficiary access to HCBS.

Several states anticipate a significant increase in beneficiary access to HCBS, as a result of BIP’s structural requirements and as barriers to access are removed. Streamlined eligibility processes and access through NWD/SEP entities are expected to increase access to HCBS. Across the states, the development and expansion of the NWD/SEP system seeks to provide unbiased information to individuals seeking LTSS. The initial screening is used to prioritize those who are most at risk for institutionalization, and the CSA ensures that an objective tool is used across multiple programs to assess the functional needs of individuals applying for services.  The CSA helps ensure that beneficiaries do not have to repeat their stories, and increased efficiency in the assessment and service plan development processes may reduce delays in service initiation.State examples in this area included the following:

Iowa designed an integrated database that supports the information and referral functions of its toll-free number and website with a goal of expanding access to information about LTSS regardless of funding source or level of need. Transportation information will also be included in the database and is anticipated to increase beneficiary access to HCBS.

In Texas, individuals will be able to access Texas’ initial screening instrument via the web, telephone, or by visiting an Aging and Disability Resource Center (ADRC). The initial screening will cover all areas of LTSS and will provide individuals with a list of referrals to the agencies that can best meet their needs.  Additionally, the agencies will receive the referral information and will contact the individual, if the person consents. Collectively, these process improvements have the potential to allow quicker, more efficient access to HCBS for individuals and families (including caregivers).

2. BIP is helping states make further progress in streamlining and standardizing the infrastructure that facilitates beneficiary access to HCBS.

Half of BIP states had a NWD/SEP system in place prior to BIP, and states are using BIP to further develop these systems to increase beneficiary access to HCBS.

A NWD/SEP system aims to provide individuals with information about HCBS, determine eligibility, and enroll individuals in services. NWD/SEP systems can take many different forms depending on how they are defined.³  In many states, the ADRC networks serve as the NWD/SEP system, providing outreach, access to information, and referrals for public and non-profit community-based providers. As a result of BIP, Project Directors reported making changes to new or existing NWD/SEP systems including implementing enhanced options counseling, coordinating and integrating data across multiple entry points, expanding local ADRC coverage areas, streamlining access to HCBS across different disability populations and care settings, and collaborating across government agencies and programs to implement a more unified information and referral system for LTSS. Project Directors noted that NWD/SEP system improvements could be achieved through meeting BIP infrastructure requirements that include designation of NWD/SEP systems, a website about HCBS options in the state, and a statewide 1-800 number that connects individuals to the NWD/SEP.

The following are selected state-specific examples of progress toward implementing a NWD/SEP system as a result of BIP:

Prior to BIP, Missouri’s state Medicaid and collaborating agencies interacted at the local level on a daily basis via phone and email. BIP funding has allowed the state to enhance the existing process so that any of the state agencies, HCBS providers, other stakeholders, and the public can utilize the toll-free number and website to access information about HCBS.

Connecticut is integrating its NWD/SEP eligibility system as a result of BIP. The new system will automate and coordinate functional assessments and financial eligibility determinations for LTSS. It will also include a predictive modeling feature that will assist both with pre-screening applications as well as linking the applicant with an appropriate case manager based on service needs. Through the creation of a personal account within the NWD/SEP system, beneficiaries will be able to request non-medical transportation services and view their personal health record, assessments, care plans, and Medicaid benefit statement.

Maine is expanding its NWD/SEP system to include mental health entities, an LTSS website, the state’s financial eligibility determination agency, Center for Independent Living, Medicaid eligibility office, and the 2-1-1 toll-free information line. Maine’s 2-1-1 will be strengthened and enhanced under BIP by becoming Maine’s comprehensive statewide directory for information and referrals regarding Maine’s LTSS. Assistance from Maine’s 2-1-1 could include triage and referral, assistance with pre-screening/application, and transfer to an assisting agency within Maine’s NWD/SEP system. Training for Maine’s 2-1-1 call center operators will be expanded to include information about Medicaid LTSS eligibility, the functional assessment process, and enhancement of the 2-1-1 resource database. State NWD/SEP system entities will also be trained on all available LTSS for adults and children with physical, intellectual, and behavioral health disabilities. Trainings for NWD/SEP entities will include information on the assessment process, eligibility, contracted agencies, and prescreening.

Nearly three-quarters of BIP states (12 of 17) had a CFCM system in place prior to BIP, for at least some of their HCBS programs, and states are using BIP to expand firewalls and CFCM across all medical and LTSS services.

As defined in CMS guidance, conflicts may arise when a social service organization serves as both the agency assessing the individual for services and the agency delivering the services.⁴  This can result in either over or under utilization of services or development of a care plan that does not promote independence and is not person-centered. While there is no template for CFCM for states to insert into the design of their existing LTSS systems, CMS did provide guidance on some key elements of a CFCM system, including a care plan that is free from bias and influence.⁵  Key elements in designing a CFCM system include: clinical or non-financial eligibility determination separate from direct service provision, use of case managers and evaluators of beneficiaries’ need for services not related to the consumer, ensuring robust oversight and monitoring, having clear pathways for grievances and appeals, and facilitating meaningful stakeholder engagement.⁶ 

While most states had some elements of CFCM in place prior to BIP, some states noted their behavioral health Medicaid programs were not conflict-free (for example, individual providers could both determine eligibility and offer services) and are working to mitigate this issue for these services. States with existing CFCM systems reported a number of strategies in place to mitigate potential conflicts including administrative firewalls, beneficiary choice, data driven assessments, robust quality management programs, grievance procedures and state oversight.

Some state-specific examples include:

Texas monitors CFCM through state approval of care plans, a beneficiary satisfaction survey, analysis of referrals, a beneficiary complaint system, and data-driven assessments.

Iowa held a series of stakeholder engagement sessions with a representative group of case managers to capture current model practices and garner support for recommended changes to state regulations to formalize CFCM procedures. In addition, the state Medicaid agency’s HCBS Quality Assurance Team and state Division of Mental Health and Disability Services will integrate questions to evaluate CFCM into routine surveys of all providers. The state’s program integrity unit is also conducting quarterly analyses to determine areas of potential concern and monitor potentially problematic utilization patterns, such as service systems that provide both case management as well as home and community-based waiver services.

As a result of BIP, states are working to develop core standardized assessment instruments; prior to BIP, almost all (15 of 17) states were using multiple population-specific functional needs assessment instruments.

The goal of BIP’s CSA requirement is to develop an instrument that determines eligibility for Medicaid HCBS, identifies an individual’s service and support needs, and informs their care plan.⁷  Per CMS guidance, the CSA instrument and assessment process should be uniform for a given population across the state. The CSA should capture a Core Dataset (CDS) that includes activities of daily living (ADLs), instrumental activities of daily living, medical conditions/diagnoses, cognitive functioning/memory needs, and behavioral needs. Prior to BIP, some states used the same tool to assess seniors and non-elderly adults with physical disabilities; however, most tools were population specific and varied by state. Implementing a standardized automated assessment instrument may help states reduce inefficiencies and administrative burdens associated with having multiple assessments and more equitably allocate services across populations. States can also use the assessment data collected to inform program planning, budgeting, quality monitoring, and reporting.

Some states are further along than others in meeting the CSA requirements. Maine’s existing assessment tools capture all the required CSA domains so the state is now focused on strengthening the coordination of the assessment and referral process. Connecticut developed a single assessment tool for all populations receiving Medicaid services; to start, the state built a cross walk from each of the nine existing tools to the common standard assessment. The state added additional questions specific to each population to the tool. The universal assessment tool will then be automated within the state’s new eligibility management system. In Maryland, BIP provided funding to implement a CSA, including the testing, training, and programming of the tool within a web-based tracking system, and an enhanced web-based eligibility tracking system, including a telephonic time-keeping system for personal assistance providers.

Nevada will be moving to a CSA and converting several manual LTSS processes to more automated IT functions. New York is automating population-specific instruments with the core data set into one system. Texas is adding questions to its assessments related to physical disabilities and mental illness.  These questions allow all LTSS beneficiaries an opportunity to discuss mental health issues and limitations related to ADLs.

3. BIP supports LTSS rebalancing efforts by building on existing Medicaid HCBS options available to states.

BIP funds are creating opportunities for states to build on existing Medicaid LTSS funding streams, including Money Follows the Person, to increase beneficiary access to HCBS.

BIP is helping states address longstanding barriers to rebalancing, such as decentralized information and referral systems and lack of standardization across assessment tools. All states that participate in BIP also participate in the MFP demonstration. States reported building upon infrastructure changes and improvements made with MFP to implement BIP. BIP and MFP share a common goal of rebalancing through the use of enhanced funding, with MFP focused on institutional to community transitions and BIP focused on infrastructure reforms. Both programs are designed to work together and across populations in order to expand HCBS options. Relying on stakeholder input and lessons learned from MFP, states reported building broader infrastructure changes, such as a NWD/SEP system or making further improvements to their IT systems and internal processes for a more unified efficient LTSS system.

Most states are using BIP funding to expand HCBS by increasing the number of waiver slots available and provide more beneficiaries with access to HCBS.

Fifteen (of 17) states reported using BIP funding to expand HCBS waiver programs (Figure 6). Of those states, 14 used BIP funding to increase the number of waiver slots available and three states added services to existing waivers. Examples of new services include care management, health promotion and education programs, individual and family support services, substance abuse treatment services, and support broker services for individuals who self-direct their services. Six states (CT, IA, MD, MS, NY and TX) used BIP funding to implement new or expanded ACA LTSS initiatives including CFC, health homes, and the § 1915(i) HCBS state plan option.

Iowa participates in MFP and added the health home state plan option and the § 1915(i) HCBS state plan option for adults with serious emotional disturbance. By participating in BIP and expanding these HCBS options, Iowa is moving towards rebalancing LTSS spending.

All 17 BIP states that responded to the survey reported using BIP funds to target specific Medicaid populations including seniors, individuals with physical disabilities and individuals with I/DD. Fifteen states are using BIP funds to target individuals with mental illness, and 12 states are targeting individuals residing in institutions who are transitioning to the community.

States are using BIP funds to support other LTSS initiatives including the ADRC grant programs, training initiatives, and provider payment rate increases.

Most BIP states (13 of 17) reported building on existing ADRC networks to develop the infrastructure needed to develop a NWD/SEP system. Enhancing the state’s ADRC network by increasing their number and coverage areas, requiring all ADRCs to achieve fully functional status, and better integrating Medicaid functional and financial eligibility determination processes will facilitate access to HCBS. BIP Project Directors also reported using the enhanced funds to support the following LTSS initiatives: streamlining or automating beneficiary screenings/assessment (13 states), expanding ADRC capacity (11 states), developing IT and related systems infrastructure (11 states), offering training initiatives for beneficiaries, providers, or health plans (10 states), improving access to substance abuse/rehabilitative services (9 states), and increasing provider payment rates (7 states).

BIP also created opportunities for collaboration across state agencies and with various stakeholder groups. All BIP Project Directors reported partnering with other state agencies, and the majority of states listed partnering with ARDCs (16 states) and Area Agencies on Aging (14 states). Other partnerships included IT and/or technical assistance providers (13), information and referral providers or resource network members (12 states), community behavioral health providers (12 states), and disability service providers (12 states).

4. States report some common challenges encountered to date related to measuring quality, coordinating with capitated managed LTSS delivery systems, and implementing the required structural reforms.

States are collecting a variety of quality data through BIP, but there is little overlap in these measures across HCBS programs and states, which can lead to challenges in evaluating HCBS quality.

States’ varied responses to the quality/evaluation survey question illustrate the challenges associated with uniformly assessing HCBS quality. BIP states are required to collect three types of data: service data (claims/encounter data), quality data linked to population-specific outcomes (captures provider quality of care), and outcome measures (assesses beneficiary satisfaction). States must report to CMS the data and measures that will be collected and the methodology for collecting those measures.⁸  States most frequently cited ongoing review of HCBS waiver programs, NCQA/HEDIS measures, and the Medicaid Adult Health Quality Measures as their mechanisms in place to track quality. CMS has also awarded Testing Experience and Functional Assessment Tools (TEFT) planning grants to states to use health information technology to develop HCBS quality measures.⁹  Six BIP states (CT, GA, KY, LA¹⁰ , MD, NH) have received TEFT funding as of November 2014 (see Text Box 1).Quality initiatives related to outcomes data focused on the development of measures by population to assess beneficiary and family caregiver experience and satisfaction. Examples include the National Core Indicators and the Participant Experience Survey, as well as the MFP Quality of Life survey for those transitioning from institutions to the community. Other selected examples included Consumer Assessment of Healthcare Providers and Systems (CAHPS), critical incident reporting, and the Mental Health Statistics Improvement Programs Survey. Where possible, states reported choosing BIP reporting measures that overlapped with those used for other HCBS initiatives (for example, health homes and the financial alignment demonstrations for dual eligible beneficiaries) to increase overlap and to move toward standardized quality metrics.

States that are implementing BIP in a capitated managed LTSS delivery system encounter additional challenges and opportunities in implementing BIP’s structural reforms.

Implementing BIP in a managed care environment requires states to work closely with MCOs to ensure coordinated implementation of the structural requirements. A growing number of states are enrolling seniors and people with disabilities in Medicaid MLTSS programs and implementing initiatives aimed at better coordinating and integrating Medicare and Medicaid services for dual eligible beneficiaries, through capitated or managed fee-for-service arrangements.¹¹  We asked states to describe their MCO coordination efforts to implement the BIP structural requirements. Six BIP states reported operating MLTSS programs, and one state reported interest in moving toward a MLTSS program.

In New Jersey, BIP’s structural requirements were included in the design of its MLTSS program. The state Medicaid agency trained MCOs on these elements before MLTSS was launched. Educational sessions included the elements of CSA, CFCM, and the ADRC as the NWD/SEP. MCOs will be monitored on their use of these requirements.

In Texas, MCOs will be using a common assessment for all LTSS beneficiaries and participating in the initial LTSS screening by receiving referrals electronically. Additionally, MCOs are working with the ADRCs – the basis for the state’s NWD/SEP system – to ensure that the services coordination function fulfills CFCM requirements.

At the same time that states are implementing CFCM systems and policies, several BIP states are also shifting the delivery of LTSS systems to MCOs and acknowledged delineating role separation in a managed care environment as a challenge. The implementation of MLTSS has furthered principles of CFCM through the separation of functional eligibility determination, service planning, and ongoing care coordination functions, but the role of the MCOs in CFCM warrants further monitoring to determine if these processes are conflict-free. In addition, separating functions may result in loss of individual and programmatic expertise, either in an organization or across a population.

States reported challenges related to implementing the BIP structural reforms and are addressing these challenges through additional training and supervision, enhanced IT infrastructure testing, and integration with data management systems.

Developing a functional assessment instrument for individuals with behavioral health needs that incorporates the BIP core data set requirements can be a challenge for states. Several states reported challenges identifying a suitable tool and developing assessment questions for people with behavioral health conditions. For example, Texas reported a challenge with developing assessment questions related to mental health that would be appropriate for “bachelor level” assessors to ask. This challenge is being addressed through training and supervision. Other challenges reported by states related to the timeline for implementation of the core data set requirements (given the additional training involved with a new assessment tool) and the length of time it takes to administer an initial screening.

Once a state’s functional assessment tools are determined to meet BIP’s CSA requirements, attention turns to the IT infrastructure necessary to implement these tools. We asked states to describe how data is accessed by state and local agencies and providers to get a better understanding of information sharing policies. States reported that protected health information is an inherent component of the HCBS waiver case management system and that appropriate protocols for data security have been and are being developed for online systems. In Maryland, beneficiary assessments are stored in a web-based tracking system where the state Medicaid agency, local health departments (assessors), utilization control agent, and support planners have access to client records and assessment data. Other survey responses about data sharing included negotiating details about provider-specific policies, establishing memoranda of understanding between local agencies specifying information sharing policies, and implementing manual processes where documents are transferred within divisions, using HIPAA officers for oversight. Five states reported they were still in the process of developing the necessary data security requirements that set out the information sharing parameters between the states and other local entities. One state noted that it was still in the process of procuring a uniform assessment tool and therefore, the wrap-around IT system had not yet been determined.

States were asked to report on significant challenges related to compliance with CFCM and responses included: the need for more training and skills building in person-centered planning, standardizing multiple care plan formats across waivers and Medicaid services, eliminating paperwork and process duplications and inefficiencies, navigating staff turnover, and achieving financial sustainability. Additional resources may be needed to either train new staff or sustain expertise in a person-centered planning process. It is important to make sure that in an effort to eliminate conflicts, states do not disrupt care coordination efforts and beneficiary access to services.

Another challenge reported by BIP states was the fact that BIP mitigation strategies alone are not enough to comply with the HCBS rule’s CFCM requirements.¹²  In addition to BIP’s CFCM requirements, the new federal HCBS regulations include requirements to mitigate conflicts of interest.¹³  States anticipated challenges with defining an approach to CFCM that addresses the specific requirements in both the BIP guidance and the CMS HCBS regulations, often within the context of a rapidly changing LTSS delivery system.

5. While BIP has helped states make progress in LTSS rebalancing, the time-limited nature of the program creates some challenges and leaves open questions about its future.

Most states (14 of 17) report being on pace to meet the structural requirements by BIP’s end date of September 30, 2015, but states also cite the short timeline remaining for the program as a challenge.

BIP Project Directors cited the short timeline for implementation as the most significant challenge related to BIP’s NWD/SEP system requirements. The seven states that were without a NWD/SEP system at the onset of BIP acknowledged challenging aspects of meeting this objective within a limited period of time, including the following: facilitating the necessary interagency collaborations given the multitude of systematic changes underway; aligning program requirements, processes, and vision across the state’s LTSS system, designing the IT infrastructure to house assessment information and share data across agencies; working in an environment of staff and resource shortages; and developing of a long-range sustainability plan that is mutually agreeable and attainable by all collaborating state agencies. States that were further ahead in meeting the BIP NWD/SEP system requirement also reported challenges related to the timeline for implementation and acknowledged that expanding the expertise necessary to assist certain populations, such as those with developmental disabilities or mental illness, takes time and resources.

Strategies that are helping to keep states on pace with the BIP requirements include working with CMS and other TA consultants and collaborating in work groups across various state program offices. Ohio brought together two stakeholder groups – an implementation group and an advisory group – to ensure all stakeholders as well as sister agencies were working together to implement a NWD/SEP system. Iowa highlighted that its NWD/SEP system improvement efforts include expanding the ADRC network and developing a regional base of mental health and disability services, where beneficiaries can choose services from more than one county. While most states reported being on pace to meet the three structural requirements, some expressed concern that the September 30, 2015 expiration of the program poses a challenge. For example, one state reported challenges related to developing and implementing cross-agency electronic systems within this timeframe.

At the time of the survey, only half the states reported having a sustainability plan in place to maintain the structural changes when BIP expires.

All states reported working on a sustainability plan that includes securing funding to support BIP infrastructure changes going forward, but only half had finalized such a plan at the time of the survey. Some of the funding sources identified were state general funds, federal administrative matching funding, and MFP funding (although the MFP demonstration is set to expire in 2016). Sustainability plans require states to make decisions about which state agency will oversee certain aspects of the BIP structural requirements after the program expires.

Follow-up interviews with BIP states that are no longer participating in the program revealed challenges reaching the spending target of 50 percent of total spending on HCBS by the September 2015 deadline. Project directors also cited the inability to sustain the required infrastructure changes (without the enhanced FMAP) as a major factor in states’ decisions to withdraw from BIP. Still, these states made progress towards rebalancing HCBS during the BIP incentive period, and project directors noted that rebalancing efforts are continuing, using the BIP rebalancing objectives, despite withdrawing from BIP.

Conclusion

States are making progress under BIP towards a more unified person-centered LTSS system. Under BIP, the availability of enhanced federal funding is increasing access to Medicaid HCBS. The structural reform requirements are enabling infrastructure improvements that help streamline information and referral services for people needing LTSS and reducing administrative inefficiencies in many states’ eligibility determination and service planning processes. BIP funds are creating opportunity for states to build upon existing Medicaid LTSS rebalancing efforts already underway, including MFP, and make enhancements to LTSS processes, systems, and infrastructure that may be in place long after BIP expires this fall. Congressional action would be needed to extend these two programs, BIP and MFP, and doing so would bolster state efforts to promote access to HCBS. Collectively, these system reform efforts are helping states reach a desired goal of serving Medicaid beneficiaries with LTSS needs in the most integrated setting. Without BIP funding, states will likely be challenged to continue funding the structural requirement implementation and improvement efforts while also monitoring how such efforts advance longstanding rebalancing initiatives and affect beneficiaries, particularly within the context of managed care delivery systems.

Survey Questionnaire (.pdf)

1. ACA § 10202, codified at 42 U.S.C. § 1396d (note). ↩︎
2. Id. ↩︎
3. Mission Analytics Group, The Balancing Incentive Program: Implementation Manual (San Francisco, CA: Mission Analytics Group, February 2013), available at www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Long-Term-Services-and-Supports/Balancing/Downloads/BIP-Manual.pdf. ↩︎
4. Id. at 29. ↩︎
5. Id. at 30. ↩︎
6. Id. ↩︎
7. Id. at 18. ↩︎
8.   Balancing Incentive Program, Summary of States’ Tools to Collect Data (San Francisco, CA: Mission Analytics Group, March 2015), available at http://www.balancingincentiveprogram.org/sites/default/files/Data_Collection_State_Summary_2015.v3.pdf. ↩︎
9. “Testing Experience and Functional Assessment Tools,” CMS, available at http://www.medicaid.gov/medicaid-chip-program-information/by-topics/delivery-systems/grant-programs/teft-program.html. ↩︎
10. As of December 2014, Louisiana is no longer participating in BIP. ↩︎
11. MaryBeth Musumeci, Key Themes in Capitated Medicaid Managed Long-Term Services and Supports Waivers (Washington, DC: KCMU, November 2014), available at https://modern.kff.org/medicaid/issue-brief/key-themes-in-capitated-medicaid-managed-long-term-services-and-supports-waivers/. ↩︎
12. For a list of CFCM guidelines, see Fay Gordon, Conflict Free Case Management: Themes in States Working to Implement New Systems (Washington, DC, Justice in Aging (formerly National Senior Citizens Law Center), October 2014), available at http://justiceinaging.org/wp-content/uploads/2014/10/RE_Conflict-Free-Case-Management-Issue-Brief1.pdf. ↩︎
13. 42 C.F.R. §§ 441.301(c)(1)(vi), 441.730(b). ↩︎