MEDICAID AGENCY ELIMINATES

SOME BEHAVIORAL HEALTH

RED TAPE

Bowing to widespread public complaints, the state Medicaid Agency has agreed to eliminate some of the layers of bureaucracy involved in the administration of behavioral health services under SALUD, the Medicaid managed care program. The change, to be effective July 1, 2001, did not go nearly as far as large numbers of consumers, advocates and behavioral health service providers demanded-they sought the complete removal of behavioral health from SALUD.

"Behavior health" services refers to mental health and substance abuse care and treatment. When the SALUD program was enacted in 1997, there was considerable opposition to including behavioral health services in it. Few states include behavioral health in Medicaid managed care programs. Nonetheless, the state went ahead and not only included behavioral health services in SALUD, but required each of the three SALUD Plans (Cimarron, Lovelace, and Presbyterian) to subcontract with Behavioral Health Organizations (BHOs) for the administration of behavioral health services. In turn, the BHOs themselves subcontracted administrative functions to companies called regional care coordinators. As a result, the SALUD system allowed for the existence of at least three levels of bureaucracy that providers and beneficiaries had to deal with. And, of course each level of bureaucracy incurred administrative costs. In addition, providers began to experience inconsistent procedures, reduced reimbursement rates, and restrictive coverage policies; and many providers began to limit or stop services to SALUD beneficiaries, or go out of business entirely.

This year, the state had to seek renewed approval from the federal Health Care Financing Administration (HCFA) in order to continue the SALUD program next year. As a result, the Medicaid agency began to invite comments and complaints about SALUD, both in large public forums and smaller meetings. Consumer and advocacy groups conducted several public "speak-outs" as well. HCFA representatives visited the state, and received comments from consumers, advocates and providers as well as from state officials. While there was a wide variety of complaints about the operation of SALUD, the largest number criticized the administration of behavioral health services.

In August, the Medicaid agency published a "pre-procurement" paper, which indicated the state's intention to eliminate BHOs and regional care coordinators, and require the managed care plans to contract directly with service providers. Despite massive public complaints that this did not go far enough, the agency has retained that proposal in the "request for proposals" (RFP), issued on September 6, which informs managed care plans of basic SALUD requirements.

Although the Medicaid agency maintains that eliminating the middle men will reduce administrative costs while maintaining coordination of medical and behavioral health care, consumers and advocates are less optimistic. They fear that the same red tape and restricted coverage policies will simply continue in other forms. HCFA has the power to require more meaningful reforms, but is not expected to do so.