U.S. Department of Health and Human ServicesU.S. Department of Health and Human Services
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This report was prepared under contract #HHS-100-97-0014 between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and Research Triangle Institute. For additional information about the study, you may visit the DALTCP home page at http://aspe.hhs.gov/_/office_specific/daltcp.cfm or contact the ASPE Project Officer, Cille Kennedy, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201. Her e-mail address is: Cille.Kennedy@hhs.gov.
The views expressed in this report do not necessarily reflect the views of the Department of Health and Human Services or the Research Triangle Institute.
Dear Reader:
Medicaid is the major public payer of community services and supports for working age adults with serious mental illnesses. Working in partnership, Federal and State governments, along with advocates, have developed an evolving array of mental health services and supports configured in systems that reflect the uniqueness of each state and locality. Medicaid has been, and continues to be, the linchpin in all these designs. States have creatively used existing Medicaid options, and the Federal program has developed Medicaid waivers that reflect advances in the philosophy and treatment of adults with serious mental illnesses.
As the philosophy and treatment of mental health disorders has evolved, programs and systems have been refined, documented and evaluated. With the identification of evidence-based and emerging practices, States have sought either to adapt or initiate these practices. Fundamental to this development has been financing. Medicaid is one of many sources of funding for mental health and related services and supports. In addition to Medicaid, there are at least 39 other Federal programs across nine Departments that provide support to people with mental illnesses. It is within this context that Using Medicaid in Support of Working Age Adults with Serious Mental Illnesses in the Community: A Handbook is developed to describe the Medicaid program in the delivery of services to adults with serious mental illnesses. We are pleased to offer this Handbook to serve as a reference guide. Its purposes are:
This Handbook would not have been possible without the commitment and hard work of many people. However, a few individuals deserve special recognition for their outstanding efforts and dedication, which has made this Handbook a reality: Janet O'Keeffe, of Research Triangle Institute; Gary Smith, of Human Services Research Institute; Ruth Katz and Cille Kennedy of the Office of the Assistant Secretary for Planning and Evaluation; and Gail Arden, Mary Jean Duckett, Mary Clarkson, and Peggy Clark of the Centers for Medicare and Medicaid Services.
As the Medicaid program continues to evolve to meet the needs of its multiple beneficiaries, new policy and clarification of existing policy will be made subsequent to the publication of this Handbook. These will be disseminated through State Medicaid Directors' Letters and the State Medicaid Manual, both of which are available on the Centers for Medicare and Medicaid Services website.
/ Signed /
Michael J. O'Grady, Ph.D.
Assistant Secretary for
Planning and Evaluation
This Handbook could not have been completed without the contributions of many individuals who are acknowledged below.
At the Centers for Medicare and Medicaid Services, Glenn Stanton, Carey O’Connor, Peggy Clark, Mary Clarkson and Jackie Wilder.
At the Center for Mental Health Services/Substance Abuse and Mental Health Services Administration, Crystal Blyler, Neal Brown, Jeffrey Buck, Eileen Elias, and Betsy McDonel Herr.
We would like to convey special thanks to Letty Carpenter. Chapter 3 of this handbook is based in large part on the especially clear description of Medicaid eligibility she authored Chapter 2 (“Financial Eligibility Rules and Options”) in Gary Smith, Janet O’Keeffe, Letty Carpenter, Pamela Doty, Gavin Kennedy, Brian Burwell, Roberta Mollica, and Loretta Williams (2000). Understanding Medicaid Home and Community Services: A Primer. George Washington University, Center for Healthy Policy Research. Available at http://aspe.hhs.gov/daltcp/reports/primer.htm (accessed February 22, 2005).
Thanks are also due to advisory group members, expert consultants, and reviewers, including the following people:
Joyce Allen, Wisconsin Department of Health and Family Services
Sharon Autio, Minnesota Department of Human Services
Michael
Cheek, The Lewin Group (formerly of American Public Human Services
Association)
Michael Deily, Utah Department of Health
Michael Fitzpatrick, National Alliance for the Mentally Ill
Larry Fricks, Georgia Office of Consumer Relations, Department of Human
Resources
Andrew Hyman, National Association of State Mental Health
Directors
Mary Kennedy, Minnesota Department of Human Services
Chris Koyanagi, Bazelon Center for Mental Health Law
Meredith
Lee, American Public Human Services Association
H. Stephen Leff,
Human Services Research Institute
Virginia Mulkern, Human
Services Research Institute
John O’Brien, Technical Assistance
Collaborative
Lee Partridge, National Association of State Medicaid
Directors
Celeste Putnam, Florida Department of Children and
Families
Amy Sander, The Lewin Group (formerly of American
Public Human Services Association)
Robert Seiffert, Nebraska
Department of Health and Human Services
Don Shumway, New Hampshire
Department of Health & Human Services
Elizabeth Tanzman,
Vermont Department of Developmental and Mental Health Services
Wendy
White Tiegreen, Georgia Department of Human Resources
Jennifer Urff,
National Association of State Mental Health Directors
| Our country must make a commitment: Americans with mental
illness deserve our understanding and they deserve excellent care. They deserve
a health system that treats their illnesses with the same urgency as a physical
illness. President George W. Bush1 |
Mental illness is the leading cause of disability in the United States.2 It can strike at any stage in life. Serious mental illnesses (including schizophrenia, manic-depressive illness, and severe depressive disorders) can be especially disabling if undiagnosed and untreated.3 Individuals with serious mental illnesses experience substantial limitations in major life activities, at home, at work, and in the community. Each year, approximately five to seven percent of adults experience a serious mental illness.4
If unaddressed, serious mental illnesses can trap individuals in a lifetime of poverty, dependency and homelessness. They also can lead to costly and frequent hospitalization, institutionalization, and recurrent involvement in the criminal justice system. Many individuals with serious mental illnesses also experience co-occurring substance abuse disorders. Serious mental illness has major fiscal consequences for state and local governments and exacts a high toll on the nation’s economy.5 Most importantly, serious mental illness has severe human costs and, too often, tragic outcomes.
| We envision a future when everyone with a mental illness will
recover, a future when mental illnesses can be prevented or cured, a future
when mental illnesses are detected early, and a future when everyone with a
mental illness at any stage of life has access to effective treatment and
supports -- essentials for living, working, learning, and participating fully
in the community. President’s New Freedom Commission on Mental Health6 |
There has been enormous progress in treating and supporting individuals with serious mental illnesses. There are now effective medications, evidence-based and other promising practices that can aid many individuals with serious mental illnesses to live fulfilling, productive lives in the community. Recovery has emerged as the essential goal of mental health service provision. Recovery envisions that individuals actively self-manage their illnesses “while reclaiming, gaining and maintaining a positive sense of self, roles, and life beyond the mental health system in spite of the challenge of the psychiatric disability.”7 There also is increased emphasis on consumer-centered and consumer-driven service planning and provision. It is clear that effective treatment and support can enable individuals with serious mental illnesses to live, learn, work, participate in, and contribute to their communities.
Publicly-funded mental health services play a linchpin role in supporting individuals with serious mental illnesses. In the United States, public funds account for almost $3 of every $5 spent on mental health services.8 The organization and management of public mental health systems is a state responsibility. States and localities underwrite a substantial share of national mental health expenditures. At one time, public mental health systems revolved around the operation of large public institutions. Today, these systems principally focus on assisting individuals in the community. State/local mental health systems are often described as the “safety net” because they are called upon to support individuals who experience especially challenging psychiatric disabilities.
The federal role in supporting individuals with serious mental illnesses includes making grants-in-aid to states, underwriting basic mental health research, and promoting the development and implementation of effective support strategies that can be applied in both the public and private sectors. These federal efforts are vital in improving the quality and effectiveness of mental health services for persons of all ages with serious mental illnesses.
Medicaid is a multi-faceted, complex federal-state program that underwrites the costs of health care, primarily for low-income persons and individuals with disabilities, including adults with severe mental illnesses in community settings.
The joint federal-state Medicaid program is the single largest source of funding for public mental health services.9 In the future, Medicaid is expected to account for a growing proportion of the resources that underwrite state-administered mental health services.10 No single source of public funding -- including Medicaid -- is sufficient in its amount or purpose to fully support effective community mental health services. Many funding sources must be tapped to support individuals. However, Medicaid can play a pivotal role in underwriting vital services and supports for low-income individuals with serious mental illnesses.
| In some states, Medicaid underwrites services for more than 60 percent of the individuals served in the public mental health system.11 |
States have considerable latitude in shaping their Medicaid programs. While each state’s Medicaid program must meet mandatory federal requirements, including covering essential health services (e.g., inpatient hospital) and serving core eligibility groups, federal law and regulations give states many options. These options include extending Medicaid eligibility to additional low-income groups beyond those mandated, offering additional optional services, and configuring services and their delivery in innovative ways by obtaining waivers of federal law.
State mental health systems face financial and other pressures. There is broad agreement that the “mental health services system does not adequately serve millions of people who need care.”12 Against this backdrop, the effective use of Medicaid can aid states in strengthening services for individuals with serious mental illnesses.
| More individuals could recover from even the most serious
mental illnesses if they had access in their communities to treatment and
supports that are tailored to their needs. The President’s New Freedom Commission on Mental Health13 |
Through Medicaid, states can obtain federal financial participation (FFP) in the costs of a variety of community mental health services. Individuals who experience major disability as a result of their mental illness frequently qualify for Medicaid services. While there are limitations in using Medicaid to serve people with serious mental illnesses, the program offers significant, critical opportunities for states in advancing their mental health policy goals.
All states offer some mental health services in their Medicaid programs. Federal Medicaid law does not contain explicit provisions concerning the exact types of mental health services and supports that a state must offer. Community mental health services may be furnished under certain optional service coverage categories, principally as rehabilitative services or under the “clinic option.” Over the years there has been relatively little formal federal guidance to states concerning Medicaid-funded community mental health services. Because of the great flexibility afforded states in program design, there are essentially 51 unique state Medicaid programs.
The many changes in federal law and regulations since Medicaid was created in 1965 have enhanced the program, but have also added to its complexity. In the arena of community mental health services, Medicaid’s potential role in supporting individuals with serious mental illnesses can be confusing for policymakers, state officials, service providers, advocates, and consumers alike.
This Handbook is designed to improve understanding and provide greater clarity concerning Medicaid’s contribution in supporting working-age adults with serious mental illnesses in the community. The Handbook focuses on working-age adults between the ages of 21 and 64 with serious mental illnesses, whose need for support extends beyond mental health services that can be effectively provided by primary care physicians or periodic visits to outpatient settings.
The mental illnesses these individuals experience result in significant functional impairment and have serious repercussions when left untreated. They may need intensive services over an extended period of time, either continuously or episodically, as well as ongoing access to appropriate services and interventions while in recovery. Sometimes, these individuals are labeled as having “severe mental disorders” or “severe and persistent mental illnesses.”
The decision to focus the Handbook on services for working-age adults stemmed from practical considerations and in no way discounts the importance of the needs of children and older persons who are affected by mental illnesses.
The Handbook assembles considerable information about pertinent federal policies into a single publication. It also contains information about how individual states have supported individuals with serious mental illnesses under Medicaid.
The Handbook seeks to provide useful, practical, reliable and comprehensive information to state policymakers and state officials -- in both state mental health authorities and state Medicaid agencies. The Handbook focuses on Medicaid but recognizes that other federal, state and local funding streams are also essential contributors to fashioning a comprehensive array of critical supports. The Handbook also is intended to serve as a resource to others who want to understand how Medicaid supports individuals with serious mental illnesses.
The Handbook complements Understanding Medicaid Home and Community Services: A Primer, released by the Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation in October 2000.14 The Primer concentrated on Medicaid home and community services for individuals with disabilities other than serious mental illnesses. The Handbook is intended to complement and round out the information contained in the Primer about supporting people with disabilities in the community. It also reflects the commitment in President Bush’s New Freedom Initiative to actively support and assist states to promote community living for all individuals with disabilities.
The information contained in the Handbook is current as of January 2005. However, federal Medicaid policy continues to evolve, both legislatively and in the form of updated federal guidance to states about how Medicaid can be used to support people with serious mental illnesses. States also modify their policies and coverages to improve and strengthen services. Chapter 2 provides information about resources for tracking federal policy developments.
The preparation of the Handbook benefited substantially from the active participation of many individuals on a Technical Advisory Group (TAG) that was formed to guide its preparation. The TAG was composed of federal and state officials, along with subject matter experts and consumer representatives. The TAG assisted in framing the content of the Handbook, offered many valuable suggestions and insights during its preparation and reviewed drafts of each chapter. The Disabled and Elderly Health Programs Group (DEHPG) at the Center for Medicaid and State Operations (CMSO), Centers for Medicare and Medicaid Services (CMS) also reviewed and provided extensive input into the Handbook’s preparation.
The Handbook recognizes that readers have different interests and knowledge concerning (a) the Medicaid program and (b) services and supports for working-age adults with serious mental illnesses. The Handbook is designed to serve as a reference guide that includes sufficient annotation of reference material to fulfill its technical support role.
The first part of the Handbook provides basic information about supporting working-age adults with serious mental illnesses in the community and about the Medicaid program.
Chapter One provides a broad overview of community support services for working-age adults with serious mental illnesses. It traces the evolution of these services, including the emergence of recovery as the central goal of mental health services. The chapter emphasizes that successfully supporting individuals in the community must address many types of needs and draw upon multiple resources (including but not limited to Medicaid).
Chapter Two provides information about the fundamental purpose and features of the Medicaid program. It is intended to provide a basic grounding for readers who are unfamiliar with Medicaid.
The next two chapters address two fundamental aspects of the provision of Medicaid-funded mental health services to working-age adults with serious mental illnesses: eligibility and benefits.
Chapter Three addresses the topic of eligibility. It provides an explanation of Medicaid financial eligibility criteria, one of the most complicated dimensions of Medicaid law. It describes federal mandates and options in extending Medicaid eligibility to adults with disabilities, along with special issues and problems that arise in securing eligibility for adults with serious mental illnesses.
Chapter Four provides detailed information concerning the principal Medicaid options (e.g., targeted case management, clinic, and rehabilitative services). The discussion of each option includes information concerning relevant statutory provisions, statutory history, regulations, and federal guidance to states in employing each option. The chapter also describes other Medicaid benefits (e.g., prescribed drugs) that play an important role in supporting individuals. The objective of this chapter is to describe federal policy regarding Medicaid benefits.
The final three chapters of the Handbook address several important topics in employing Medicaid to support working-age adults with serious mental illnesses.
Chapter Five’s theme is “finding the fit.” It links mental health practices and service approaches to Medicaid coverage options. In particular, the chapter identifies key mental health services (e.g., Assertive Community Treatment and peer support), discusses the feasibility of offering them through the Medicaid program, and illustrates how various states have successfully incorporated these services into their programs. The information in this chapter can serve as a starting point for states interested in exploring new directions in employing Medicaid to underwrite community mental health services.
Chapter Six describes the Medicaid waiver and demonstration authorities that provide an avenue for states to employ alternative approaches to the provision of Medicaid-funded mental health services. These waiver authorities have been used by several states to deliver mental health services under alternative configurations. The chapter also discusses the potential pros and cons of employing these alternatives to the standard Medicaid coverage options.
Chapter Seven explores several topics in crafting effective strategies for using Medicaid to support working-age adults in the community. These topics include consumer-directed services, facilitating the transition of persons from institutional settings to the community, and the management of Medicaid services.
Throughout the Handbook, examples illustrate how individual states have shaped Medicaid services to effectively support people with serious mental illnesses in the community.
The Handbook includes appendices with important federal primary source documents and other information. Each chapter of the Handbook also has an annotated bibliography of additional resource materials that readers might find useful, along with information about how to obtain them. There also are descriptions of other resources available on the Internet.
The provision of effective services and supports to working-age adults with serious mental illnesses is a critical concern at both the state and federal levels. The Handbook is intended to assist states in assessing how Medicaid can be most effectively used to address the needs of these individuals. It is up to state policymakers working with the mental health community to identify their state’s unique needs and goals, and then to use the Handbook’s information (a) to choose the alternatives best suited to their state, and (b) to decide how these alternatives might be best used.
Remarks by President Bush on April 29, 2002 in Albuquerque New Mexico announcing the formation of the New Freedom Commission on Mental Health.
World Health Organization (2001). The World Health Report 2001 -- Mental Health: New Understanding, New Hope. Geneva: World Health Organization.
As defined by Section 1912(c) of the Public Health Services Act (as amended by P.L. 102-321), an adult with a serious mental illness is:
“a person age 18 and over, who currently has, or at any time during the past year has had a diagnosable mental, behavioral, or emotional disorder of sufficient duration to meet diagnostic criteria specified within the DSM III-R (Diagnostic and Statistical Manual for Mental Disorders), and that has resulted in functional\ impairment that substantially interferes with or limits one or more major life activities.
“Functional impairment is defined as difficulties that substantially interfere with or limit role functioning in one or more major life activities including basic daily living skills (e.g., eating, bathing, dressing); instrumental living skills (e.g., maintaining a household, managing money, getting around the community, taking prescribed medication); and functioning in social, family, and vocational/educational contexts. Adults who would have met functional impairment criteria during the referenced year without benefit of treatment or other support services are considered to have serious mental illnesses.”
United States Public Health Service, Office of the Surgeon General (1999). Mental health: A Report of the Surgeon General. Rockville, MD: Department of Health and Human Services, U.S. Public Health Service.
The estimated annual economic cost of mental illness is $79 billion, including loss of productivity. President’s New Freedom Commission on Mental Health (2003). Achieving the Promise: Transforming Mental Health Care in America. Final Report. Rockville, MD: Department of Health and Human Services Publication No. SMA-03-3832. [Hereafter, PNFCMH (2003)]
Steven J. Onken, Ph. D. and Jeanne M. Dumont, Ph.D. (2002). Mental Health Recovery: What Helps and What Hinders? Alexandria VA: National Association of State Mental Health Program Directors and the National Technical Assistance Center for State Mental Health Planning.
Coffey, R.M., Mark, T., E., Harwood, H., McKusick, D., Genuardi, J. et al. (2000). National Expenditure Estimates of Expenditures for Mental Health and Substance Abuse Treatment, 1997. Rockville, MD: Substance Abuse and Mental Health Services Administration. (SAMSHA Publication SMA-00-3499)
Jeffrey A. Buck (2003). Medicaid, Health Care Financing Trends, and the Future of State-Based Public Mental Health Services. Psychiatric Services, Vol. 54, No. 7. In 1997, Medicaid accounted for about one-half of state and locally administered mental health spending. This share is forecast to increase to about two-thirds of spending by 2017.
For example, in Florida it is estimated that Medicaid accounts for 62 percent of spending (Celeste Putnam, Florida Director of Mental Health: personal communication, June 2003.) In California, the figure is even higher -- 68 percent. California Mental Health Planning Council (2003). California Mental Health Master Plan: A Vision for California. Sacramento: MHPC. Available on the Internet at: www.dmh.cahwnet.gov/MHPC/masterplan.asp
President's New Freedom Commission on Mental Health. (2002) Interim Report of the New Freedom Commission on Mental Health. Rockville MD.
PNFCMH (2003).
| Working age adults with serious mental illnesses can live, work, and participate successfully in the community when they have services and supports tailored to meet their individual needs and contribute to their recovery. Effectively supporting individuals requires drawing on multiple types of federal, state and local resources. No single funding stream – including Medicaid – is sufficient to meet the varied needs of individuals with serious mental illnesses. This chapter describes public funding for services and supports, how supporting individuals in the community has evolved, and the role that Medicaid can play in addressing the needs of these individuals. |
Services for persons with serious mental illnesses have changed markedly over the past fifty years. They continue to evolve, benefiting from both solid research and a fuller appreciation of the importance of addressing more than just a person’s mental illness in order to promote successful community living. This chapter briefly describes the evolution of mental health services and the contemporary consensus regarding the constellation of services and supports that are needed to effectively support individuals in the community. Next, it identifies the funding streams that are used in supporting working-age adults with serious mental illnesses and discusses Medicaid’s important role in underwriting community services.
Fifty years ago, government-funded mental health services principally consisted of large state-run mental institutions, funded solely with state funds. Community-based services -- especially for low-income individuals -- were scant and not well-organized.2 First-generation antipsychotic medications that effectively relieved the psychotic symptoms of many individuals -- most notably chlorpromazine (Thorazine) -- were discovered during the mid-1950s. These medications -- coupled with litigation to end the confinement and segregation of individuals in mental institutions -- catalyzed the deinstitutionalization of thousands of individuals from state mental institutions. However, it was soon evident that communities were ill-prepared to provide the mental health care and basic life supports that many individuals needed. As a result, many people lived isolated lives in poverty, were often homeless and experienced high rates of crisis and rehospitalization.
At the urging of President Kennedy, Congress enacted the Community Mental Health Centers Act of 1963. Federal funding was provided directly to localities for the development of community mental health centers to furnish essential services, notably for the uninsured poor. This landmark legislation sparked the creation of centers around the nation that became the foundation of publicly-funded community mental health systems. The Act also was the federal government’s first step in providing federal financial assistance for community mental health services. The centers were given the broad charge of furnishing mental health care -- principally in outpatient clinic settings -- to all individuals with mental illnesses, regardless of their type or severity, within their designated geographic catchment areas. Community Mental Health Centers (CMHCs) were not directed to focus exclusively on individuals with serious mental illnesses.
During the 1970s, a consensus emerged that successfully supporting community life for individuals with serious mental illnesses required the adoption of a more comprehensive approach to meeting their needs than tying services exclusively to treatment in office-based settings and outpatient clinics. While outpatient services could address the needs of many people, they had their limitations, especially with respect to individuals with serious mental illnesses. A different approach was needed to address the multiple challenges these individuals face.
In the 1970s, as a result of studies conducted by the National Institute of Mental Health and dialogue within the mental health community, the “community support system” (CSS) was formulated to serve as a conceptual framework for supporting individuals with serious mental illnesses who are especially reliant on mental health and other com-munity support systems to live successfully in the community. The federal Community Support Program (CSP) was launched and is now located at the Center for Mental Health Services (CMHS) in the U.S. Department of Health and Human Services Substance Abuse and Mental Health Services Administration (SAMHSA). Starting in 1977, CSP made grants to states specifically to aid development of service systems for people with serious mental illnesses. CSP also underwrote technical assistance, federally sponsored research and demonstration programs, and active networking.3
The CSS framework encompasses a core set of principles concerning the provision of services for individuals with serious mental illnesses. In particular, services should be:4
The CSS concept also identified the essential service and support components that are necessary to successfully support individuals with serious mental illnesses in the community, as illustrated in Figure 1-1.
In CSS, specialized mental health services are a critical component. However, CSS strongly emphasizes the importance of supporting individuals in the everyday world rather than confining services to fixed-site clinics and offices. CSS also points to the importance of crisis response capabilities and recognizes that individuals with serious mental illnesses frequently need supports beyond treatment and clinical services. These supports include income support and services (e.g., vocational rehabilitation) that help them obtain employment and, thereby, achieve greater independence and self-esteem. Assistance in securing community housing also is vital. CSS also underscores the critical role that peers, families, friends, and other sources of community support outside the formal service delivery system can play in helping individuals to live successfully in the community. Because CSS spans multiple types of supports, case management/service coordination is an essential feature of CSS, both to assist individuals to obtain other supports and to coordinate services.
Figure 1-1
The CSS framework has had a significant influence in shaping public community mental health programs. During the late 1970s and throughout the 1980s, community support programs were started around the country. Indeed, today in some states (e.g., New York) services for individuals with serious mental illnesses who need intensive, ongoing supports are known as community support services. Early community support programs had promising results in aiding individuals to experience positive outcomes in the community.5
The past two decades have been marked by state efforts to amplify and mainstream the essential components and features of CSS in their public mental health systems. State-operated mental health facilities now typically provide short-term treatment.6 States have shifted their resources to community support, concentrating more intently on supporting individuals with serious mental illnesses.
As a result of the CSS framework, consensus exists that a comprehensive consumer-centered system of specialized mental health services for persons with serious mental illnesses should span multiple components, as Table 1-1 on the following page illustrates.7 Especially important has been the coupling of rehabilitation with treatment to assist individuals to overcome the functional limitations that stem from serious mental illnesses. Rehabilitation assists individuals to regain the essential skills that they need in order to live more independently, reduce their dependency on the service system, and build self-esteem.
| TABLE 1-1: Consumer-Centered System Components | |
|---|---|
|
|
In subsequent chapters, more information will be provided concerning the nature and scope of many of these services and supports. Not every individual with a serious mental illness requires or will use every one of these services. Rather, these components describe a constellation of services and capacities that a community system should have available in order to respond to the unique needs of each individual. An effective community support system is individually centered, capable of tailoring services to each person’s needs and changing circumstances, and respectful of each person’s right to make decisions concerning their services and how they are provided.
| The greatest potential for improvement does not lie in mental
health systems, it lies within the individual who has faith that she or he can
recover, does recover, and then shares that good news with
others. Larry Fricks8 |
Recovery has emerged as an especially compelling and powerful paradigm for supporting individuals with serious mental illnesses. Recovery has its roots in the fundamental principles of the CSS concept and stresses how critical it is for people with mental illnesses to take responsibility for their lives, make decisions about their services, and achieve independence. Recovery engages and empowers individuals with serious mental illnesses to take control of their lives. Recovery shares many of the same philosophical underpinnings as the broader self-direction movement among people with disabilities of all types who are asserting greater authority over service provision and assuming personal responsibility for improving the quality of their lives.
Successfully transforming the mental health service delivery
system rests on two principles:
The President's New Freedom Commission on Mental Health9 |
Also in recent years, effectively supporting individuals with serious mental illnesses has benefited from development of new pharmaceutical products for treatment of certain disorders, including the development of atypical antipsychotics for schizophrenia. Today, there is a wider array of effective medications to treat many disorders. There also have been significant strides in medication management.
“Evidence-based practices” (briefly described on the following page) are being identified that have demonstrated efficacy and cost-effectiveness in securing positive outcomes for individuals with serious mental illnesses.
| Evidence-Based Mental Health Practices | |
An
“evidence-based practice” (EBP) is a method to
address a condition, which meets scientific and stakeholder criteria for
safety, effectiveness, and cost-effectiveness. EBPs translate research findings
into practice. The deployment of EBPs is widely regarded as central to
improving health care quality. EBPs have been developed and are being
researched across a broad spectrum of health services.10 There are now six recognized11 adult mental health
EBPs12:
|
The principles of recovery and the emergence of evidence-based practices are exerting strong influence on the provision of public community mental health services. For example, the New York State Office of Mental Health has launched a major initiative, entitled “Winds of Change”, to incorporate evidence-based practices into its system.16 Many other states also have launched initiatives to introduce and amplify the use of evidence-based practices in their community mental health systems. SAMHSA and the Robert Wood Johnson Foundation are co-leading a nationwide effort to promote the application of evidence-based practices. Georgia has revamped its coverage of Medicaid mental health services to embrace the essential principles of recovery by redefining its array of services and including more peer oriented approaches.17 Ohio has strongly emphasized recovery as well. Other states are engaged in similar efforts.
In summary, the CSS framework had a major influence on public mental health systems. In the case of working-age adults with serious mental illnesses, public systems are frequently designed to: (a) address multiple dimensions in supporting individuals with serious mental illnesses in the community, stressing not only treatment but rehabilitation and other community living dimensions; (b) organize around meeting each person’s unique needs; and, (c) focus on recovery. The translation of “science to service” is leading to the adoption of evidence-based practices that promise to improve the value of community mental health services. A robust community mental health system promotes both positive outcomes for people with serious mental illnesses and pays substantial dividends in the form of reduced state, local and private costs due to hospitalization and incarceration.
Figure 1-2
States are at different stages in their capabilities to support individuals in the community. Many face major challenges in marshaling the resources necessary to meet the needs of working-age adults with serious mental illnesses in the community. This is why the funding of mental health services is a major issue nationwide and why the Medicaid program is increasingly important.
Supporting low-income working-age adults with serious mental illnesses in the community involves not only furnishing them with effective mental health services but also addressing other important needs, including housing, jobs, other primary health care, and income assistance. Funding the constellation of services that comprise a comprehensive array of community support is challenging because it requires tapping a variety of federal, state, and frequently, local resources, as illustrated in Figure 1-2.
Resources for community support flow through many federal and federal-state programs and funding streams.18 State and, often, local tax dollars also underwrite the full spectrum of services and supports. States and localities (in some states) match federal Medicaid and other federal funds (e.g., for vocational rehabilitation). There are a wide variety of federal housing assistance programs; here too, states and localities often provide significant funding. With respect to income support, working-age adults with serious mental illnesses frequently receive federal benefits such as Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). Some states supplement these benefits.
The federal Medicare program pays for some mental health services (discussed in Chapter 4) and, in the case of individuals who are eligible for both Medicare and Medicaid (discussed in Chapter 3), also underwrites other primary care. The joint federal-state Medicaid program is a critical source of funding for both basic primary health services and for mental health services for low-income working-age adults with serious mental illnesses. Through the federal Community Mental Health Services Block Grant program, states receive flexible formula-based grants to fund community mental health services. The Mental Health Block Grant program is the “single largest federal contribution dedicated toward improving mental health service systems across the country.”19 Block grants have played an important role in capacity building by enabling states to target dollars to special populations and underwrite the development of new services. Annual block grant funding accounts for less than two percent of total public mental health services outlays nationwide.
Numerous challenges inhibit the development of effective strategies for combining federal, state, and local funding for community mental health services to support individuals. As observed in a report to the President’s New Freedom Commission on Mental Health:
“A coordinated system that addresses the needs of people with mental illnesses must include a comprehensive range of mental health services including ancillary supports such as housing, vocational rehabilitation, education, substance abuse treatment, income support, and other basic services. While federal funds are potentially available to individuals, states, localities, or public and private providers, most of the federal programs that contribute funding to the current mental health system are designed to address broadly defined human needs rather than serving the specific needs of adults with serious mental illnesses or children with serious emotional disturbances.”20
A major challenge in marshaling resources to meet the varied needs of working-age adults with serious mental illnesses is that federal and state programs are often structured as “funding silos” with their own unique rules and requirements, which makes coordination difficult at both the system and service delivery levels.21 The President’s New Freedom Commission on Mental Health identified funding fragmentation as a major barrier to effectively supporting individuals with mental illnesses. To address this barrier, the Commission recommended that states develop and implement comprehensive mental health plans to promote a unified approach to system planning and management at the state level.22
The federal-state Medicaid program is an especially important source of funding for community mental health services. The program offers states the opportunity to secure federal dollars to strengthen and expand community services. The Medicaid rehabilitative services option is particularly important in underwriting services that contribute to the recovery and independence of working-age adults with serious mental illnesses. At the same time, there are boundaries that circumscribe the use of Medicaid to underwrite some types of services.
Medicaid’s role in paying for mental health services has grown considerably over the years. In 1997, it accounted for about 20 percent of all behavioral health spending23 and 35 percent of all public mental health expenditures.24 Medicaid is the single largest payer of public mental health services and is expected to play an even larger role in underwriting these services in the future.25
Medicaid plays a critical role in supporting working-age adults with serious mental illnesses. About 1.2 million working-age adults with mental disorders (excluding mental retardation) receive SSI benefits.26 These individuals are nearly universally eligible for Medicaid and include those who rely heavily on mental health services.
Federal Medicaid law does not spell out a defined set of mental health services or benefits. However, the Medicaid program includes certain basic coverage options (e.g., targeted case management, clinic and rehabilitative services) through which a state may elect to offer community mental health services as part of its Medicaid program. Medicaid permits states to provide a wide-range of critical community mental health services, including evidence-based practices such as ACT, and important recovery-oriented services such as peer support. While some Medicaid benefits include psychiatric services (e.g., short-term hospitalization), none are specifically defined as mental health services.
| All available evidence shows that Medicaid has made enormous contributions to expanding access to mental health care for low-income populations. It also has expanded consumer choice for low-income people with mental disorders and has promoted community-based treatment for people with mental and addictive illnesses. Mental health care in the United States is unquestionably better because of the Medicaid program than it was thirty-five or even fifteen years ago.27 |
As will be described in greater detail in Chapter 4 and Chapter 5, many states have successfully incorporated a wide variety of community mental health services into their Medicaid programs. As states have concentrated more and more on supporting individuals with serious mental illnesses in the community and have adopted the CSS framework in their public systems, they have shifted away from employing the more circumscribed, outpatient treatment-oriented “clinic option” coverage in favor of using the more robust and flexible rehabilitative services option. Moreover, the scope of services that states are furnishing under the rehabilitative services option has broadened, thereby improving system capabilities to better respond to individual needs.
For example, from 1971 through 1993, California relied on the clinic option to underwrite public mental health services. But, under the clinic option, services had to be directed by a physician, provided mainly in a clinic, and focused primarily on the treatment of the mental disorder. In 1993, the state adopted the “rehab option” because services can be directed by licensed mental health practitioners (not just physicians) and “may be provided almost anywhere in the community, and may be focused both on the treatment of the mental disorder and the associated functional limitations that may jeopardize community living.”28
Federal law gives states the flexibility to align their Medicaid mental health coverages to their broader system goals and objectives. Medicaid is very much a state-shaped program. In the case of community mental health services, this is especially the case because federal policy gives states considerable latitude within broad guidelines in selecting the services that they offer. For example, states have extensively shaped the rehabilitation option, broadening its scope and securing coverage of important services such as peer supports and ACT. In addition, as will be discussed in Chapter 6, states also have the flexibility to adopt alternative service delivery models under Medicaid, including managed care models.
In many respects, the Medicaid program is best understood as a financing tool that enables states to obtain federal financial participation in the costs of services they elect to furnish and which comport with federal statutory and regulatory parameters. Federal Medicaid policy does not dictate a state’s service system goals and objectives. It sets parameters that determine whether the costs of services will qualify for federal funding. Medicaid’s contribution to underwriting community services for individuals is heightened when a state’s Medicaid coverages and core services are in close alignment.
Even though Medicaid helps fund mental health services -- especially on behalf of low-income individuals who have the most intensive need for services -- the Medicaid program cannot provide all the services and supports that beneficiaries with serious mental illnesses require in order to live successfully in the community. Medicaid is principally a purchaser of mental health and other primary health services, and with respect to mental health services, there are fundamental boundaries concerning the types of services that Medicaid may purchase. These boundaries have their roots in basic provisions of federal Medicaid law. While these boundaries often are less constraining than sometimes believed, it is nonetheless the case that not every service or support can -- or should -- be covered under Medicaid. Employing Medicaid to underwrite mental health services involves “finding the fit” between the services and supports that a state has identified as critical to meeting the needs of individuals with serious mental illnesses and Medicaid program requirements (as discussed in Chapter 5).
Medicaid-funded community mental health services have evolved along different lines than home and community services for individuals with other disabilities.29 Because federal Medicaid law prohibits the coverage of services in “Institutions for Mental Disease” (IMDs) that have more than 16 beds (the “IMD exclusion” is discussed in detail in Chapter 4), most states have not used the Medicaid home and community-based services waiver program to support working-age adults with serious mental illnesses. Instead, states employ Medicaid state plan services and other federal waiver authorities to support individuals in the community.
The principal boundaries that circumscribe the extent to which Medicaid can be employed to underwrite community mental health services include:
Just as the provision of treatment services alone are not sufficient to promote community living for individuals with serious mental illnesses, Medicaid funding by itself is insufficient to meet many fundamental and diverse needs. Medicaid is a powerful, important contributor to the provision of mental health services and other primary health care for individuals. But, Medicaid funding must be employed in tandem with other federal, state, and local funding sources in order to comprehensively address the full range of supports that working-age adults with serious mental illnesses require to live successfully in the community. As recommended by the President’s New Freedom Commission on Mental Health, it is important that states develop comprehensive mental health plans that take a broad view of how Medicaid along with other federal and state programs can work together to support individuals with mental illnesses.
CSS has proven to be an important framework for successfully supporting working-age adults with serious mental illnesses in the community. The principles of recovery build on the CSS framework while also emphasizing empowerment and individuals taking control of their lives. State public mental health systems have focused on enhancing their community service systems and capabilities to support individuals with serious mental illnesses.
Medicaid plays an important role in underwriting community mental health services. Medicaid also provides a means for states to leverage their own dollars to enhance and expand community services in order to advance their goals and objectives for supporting working-age adults with serious mental illnesses in the community. To be successful, Medicaid must be used in tandem with other federal, state and local funds to address the full range of individual needs across the many dimensions of community life.
Since Medicaid can play a vital role in supporting individuals, it is important to have a clear understanding of the program. Chapter 2 provides a description of the essential features of the Medicaid program.
The following are especially useful resources for obtaining more information about many of the topics addressed in this chapter. Resources about Medicaid are identified in the following chapters.
U.S. Department of Health and Human Services. (1999). Mental Health: A Report of the Surgeon General. U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Center for Mental Health Services, National Institutes of Health, National Institute of Mental Health, Rockville, MD: Author. (458 pages)
In 1999, the Surgeon General of the United States, in collaboration with SAMHSA and NIMH, released this groundbreaking, comprehensive report. The report covers a wide range of topics, including state-of-the-art information on serving individuals of all ages. Particularly relevant chapters include “Adults and Mental Health” and “Organizing and Financing Mental Health Services.” In 2001, the Surgeon General issued a follow-up report entitled “Mental Health: Culture, Race and Ethnicity, A Supplement to Mental Health: A Report of the Surgeon General.” The 1999 report may be obtained at www.surgeongeneral.gov/library/mentalhealth/home.html. The 2001 report may be accessed at www.surgeongeneral.gov/library/mentalhealth/cre/.
President’s New Freedom Commission on Mental Health. Achieving the Promise: Transforming Mental Health Care in America. DHHS Pub. No. SMA-03-3832. Rockville, MD: 2003
Established in April 2002, the President’s New Freedom Commission on Mental Health was charged with assessing the status of mental health services and developing policy recommendations at the federal, state, and local levels regarding effective implementation of community-based mental health care, resource development, and general treatment of adults with a serious mental illness and children with a serious emotional disturbance. The Commission’s final report was released in August 2003 and contains a series of findings that identify major problems in mental health policy, especially system fragmentation. The report contains numerous recommendations for improving the provision of community services and supporting community living for children and adults. The report may be obtained at www.mentalhealthcommission.gov/reports/reports.htm.
Frank, R., Goldman, H., & Hogan, M. (2003). Medicaid and Mental Health: Be Careful What You Ask For. Health Affairs 22(1): pp. 101-113.
This article traces the historical relationship between Medicaid and mental health services, highlighting the increasing role that Medicaid has taken as a funder of public mental health services and supports. The authors discuss the major factors leading to this rising Medicaid role, such as the deinstitutionalization movement and cost-shifting efforts by states. The article cautions about the effects of over reliance on Medicaid funding.
Carol Bianco and Susan Milstrey Wells (eds.) (2001). Overcoming Barriers to Community Integration for People with Mental Illnesses. Rockville MD: U.S. Department of Health and Human Services, Substance Abuse and Mental Health Administration, Center for Mental Health Services. (68 pages).
This report describes many of the barriers that people with mental illnesses face in the community. It discusses funding streams that cross several dimensions of community living. The report may be obtained at www.olmsteadcommunity.org/OvercomingBarriers.pdf.
Substance Abuse and Mental Health Services Administration/Center for
Mental Health Services
www.samhsa.gov/centers/cmhs/cmhs.html
The Center for Mental Health Services at SAMHSA web site contains extensive information on all elements of the Community Support Program as well as a wide variety of other information about mental health services. The site also has Resource Kits for the implementation of evidence-based practices, containing resources specifically geared to consumers, family and friends, mental health program leaders, public mental health authorities, and clinical practitioners.
National Association of State Mental Health Program Directors
(NASMHPD)
www.nasmhpd.org/
NASMHPD identifies public mental health policy issues, apprises its members of research findings and best practices in mental health service delivery, fosters collaboration, provides consultation and technical assistance, and promotes effective management practices and financing mechanisms. The NASMHPD site contains information about each of its six divisions (adults, attorneys, children, consumers, forensics, medical directors, older persons and state hospitals), explanations of its position on various mental health issues (i.e., the IMD exclusion), and updates on new mental health policies. NRI compiles extensive information about individual state mental health systems (including system capabilities and the use of Medicaid funding by states). NTAC has developed numerous policy resources, tool kits, and other materials.
National Association for Mental Illness (NAMI)
www.nami.org/
NAMI is a leading advocacy and public policy organization for individuals with mental illness. There are approximately 1,000 state and local NAMI affiliates nationwide. The web site offers information on mental illness and its history, recommended treatment, policy alternatives in support of individuals and families coping with mental illness, and statistics.
National Mental Health Association (NMHA)
www.nmha.org/
NMHA is a nonprofit organization that addresses all aspects of mental health and mental illness. It has more than 340 affiliates nationwide. NMHA works to improve the mental health of all Americans, especially the 54 million people with mental disorders, through advocacy, education, research and service. Its web site contains a wide variety of information concerning mental health services.
Bazelon Center for Mental Health Law
www.bazelon.org/
The Bazelon Center advocates for the rights of people with mental disabilities. Its web site contains a host of materials concerning mental health services and related topics such as housing. The Center also has prepared numerous publications concerning Medicaid and public mental health systems.
Cille Kennedy contributed to the preparation of this section.
The 1954 New York State Community Care Act was the first venture by a state to furnish services to individuals with serious mental illnesses in the community. The Act provided that state mental hospital psychiatrists could continue to provide services to individuals who had been discharged from hospitals to the community.
Virginia Mulkern (1995). The Community Support Program: A Model for Federal-State Partnership. Washington DC: Mental Health Policy Resource Center. Early Community Support Program (CSP) efforts included funding for statewide planning and system building in eight states along with funding to establish demonstration programs. In 1980, CSP funding was modified to give states more flexibility in employing funds for infrastructure and system development. By 1984, all 50 states and the District of Columbia had received strategy development grants. Funds also were earmarked to conduct studies of homelessness and demonstration programs to provide services to homeless individuals. Later on, funding was earmarked for demonstrations involving services for older persons, young adults with co-occurring conditions, consumer-operated services, and supportive housing. Funds also supported statewide system improvement, consumer and family support activities, and research demonstrations.
Ibid.
Ibid.
A notable exception is their responsibility to serve individuals committed by the courts.
Adapted from: Bazelon Center for Mental Health Law (2002). An Act Providing for a Right to Mental Health Services and Supports: A Model Law. Washington, DC.
Remarks by Larry Fricks, Director, Office of Consumer Relations, Georgia Department of Human Resources, December 13, 1999 at the White House for the Unveiling of the Surgeon General 's Report on Mental Health.
President’s New Freedom Commission on Mental Health (PNFCMH). Achieving the Promise: Transforming Mental Health Care in America. DHHS Pub. No. SMA-03-3832. Rockville, MD: 2003.
In health, the fundamental precepts of EBP emerged roughly a decade ago. In the United States, the Institute of Medicine has been a central force in promoting the development and implementation of EBPs (see especially, Committee on Quality of Health Care in America (2002). Crossing the Quality Chasm. Institute of Medicine). The Agency for Health Care Policy and Research at the U.S. Department of Health and Human Services has lead responsibility for promoting evidence-based practice in everyday care.
These practices were identified by a consensus panel sponsored by the Robert Wood Johnson Foundation (RWJF). This panel was composed of researchers, families, individuals with mental illnesses and mental health administrators. Funding from RWJF, SAMHSA and other sources is underwriting the preparation of materials by the New Hampshire-Dartmouth Psychiatric Research Center in collaboration with several other organizations in order to facilitate and accelerate the implementation of EBPs by agencies and mental health systems. Implementation “Resource Kits” have been prepared for each practice for use by administrators, program directors, practitioners, individuals with mental illnesses, and families. These toolkits are designed to promote interest in the use of these practices, facilitate their adoption, and provide tools (fidelity measures) to assess if the practice is being used consistently. These kits are located at www.mentalhealth.org/cmhs/communitysupport/toolkits
Unless otherwise specified, all the descriptions of evidence-based practices summarize materials included in: the 2002 draft toolkits, materials disseminated by the New York State Office of Mental Health via its web site, and the 1999 Surgeon General’s Report on Mental Health.
There are extensive materials concerning ACT that are available from the National Alliance for the Mentally Ill (NAMI), which has been a leading advocate for the expanded availability of ACT nationwide. NAMI employs the acronym PACT (Program for Assertive Community Treatment). NAMI also has exercised leadership in the development of standards for ACT. For more information, go to: www.nami.org/about/pact.htm
NAMI Issue Spotlight: Employment and Income www.nami.org/Template.cfm?Section=Issue_Spotlights&template=/ContentManagement/ContentDisplay.cfm&ContentID=13158
PNFCMH (2003), op cit
New York State Office of Mental Health (2002). OMH Introduces “Winds of Change.” Available at www.omh.state.ny.us/omhweb/omhq/q0302/Wind.htm
Personal communication: Larry Fricks and Wendy White-Tiegreen, Georgia Department of Human Resources.
The federal and state-federal programs identified in the graphic are not exhaustive. For example, there are additional federal programs that furnish targeted dollars to support homeless individuals and families, including individuals with serious mental illnesses. A complete listing and discussion of federal and state-federal programs that play a role in meeting the needs of individuals (children and adults) with mental illnesses is contained in Major Federal Programs Supporting and Financing Mental Health Care (January 2003), prepared on behalf of the President’s New Freedom Commission on Mental Health, available at www.mentalhealthcommission.gov/reports/Fedprograms_031003.doc.
Ibid.
Ibid.
Ibid. See also: Carol Bianco and Susan Milstrey Wells (eds.) (2001). Op. cit.
PNFCMH (2003). Op. cit.
Behavioral health includes mental health and substance abuse services.
Coffey, Mark, King, et al. (2000). National Estimates of Expenditures for Mental Health and Substance Abuse Treatment 1997. Rockville MD: Substance Abuse and Mental Health Services Administration, U.S. Department of Health and Human Services. (SAMSHA Publication SMA-00-3499).
Jeffrey A. Buck (2003). “Medicaid, Health Care Financing Trends, and the Future of State-Based Public Mental Health Services.” Psychiatric Services, Vol. 54. No.7.
Social Security Administration. 2002 Annual Statistical Supplement, Social Security Bulletin.
Frank, R., Goldman, H., & Hogan, M. (2003). Medicaid and Mental Health: Be Careful What You Ask For. Health Affairs 22(1): pp. 101-113.
California Department of Mental Health (1999). Frequently Asked Questions About Systems of Care, Medicare and Medi-Cal.
In particular, states have used the Medicaid home and community-based services (HCBS) waiver program extensively to underwrite home and community services for individuals of all ages with all types of disabilities, except individuals with disabilities due to mental illnesses. For individuals with developmental and other disabilities, states may offer HCBS as an “alternative” to services in a Medicaid-reimbursable institutional setting (nursing facilities or ICFs/MR).
Glenn Stanton, CMS, personal communication.
| Medicaid is a very large, complex, multi-faceted federal-state program. Through the program, states and the federal government each year underwrite health and long-term services for about 51 million low-income children and adults. This chapter describes the essential features of the Medicaid program. It is principally intended for readers who may not be familiar with the program’s basic features. |
Medicaid is a joint federal-state program that provides health and long-term services to low income adults and children, including people with disabilities. About one out of every seven of our nation’s citizens obtains health care that is funded through Medicaid.1 In 2003, state-federal Medicaid expenditures totaled $259.6 billion, an increase of more than 50 percent since 1997.2 Federal funds account for more than one-half of total expenditures. Medicaid ranks second only to Medicare in federal health care outlays; it also is the single largest source of federal financial aid to states. At the state level, only spending for elementary and secondary education exceeds state tax dollar expenditures for Medicaid.
Medicaid is multi-faceted. It not only provides access for low-income individuals to essential health care but also pays for more than one-half of all long-term services for older persons and people with disabilities. As noted in Chapter 1, Medicaid is playing an increasingly important role in underwriting critical services and supports for working-age adults with serious mental illnesses.
This chapter provides basic background information concerning the “nuts and bolts” of Medicaid, including its history, the nature of the program’s federal-state relationship, eligibility, benefits, and other topics. The annotated bibliography lists additional resources that contain more in-depth information concerning Medicaid. Later chapters delve more deeply into facets of Medicaid that are most directly related to supporting working age adults with serious mental illnesses in the community.
Medicaid (Title XIX of the Social Security Act) was created in 1965 in tandem with the Medicare program (Title XVIII).3 The Medicare program is a federally funded and administered health insurance program for retirees, disabled workers, and their spouses and dependents. In contrast, Medicaid is a joint federal-state program through which states, the District of Columbia and the territories receive federal financial participation in their costs of furnishing health and long-term services to federally recognized groups of low-income families and individuals.
Before Medicaid was enacted, limited federal payments were made to states for health care services they purchased on behalf of public assistance recipients. In 1960, Congress authorized open-ended federal matching payments to states for health care provided to indigent older persons.4 Still, in the early 1960s, states varied widely in the scope of the health care services they funded for low-income individuals and families.
Medicaid was designed to expand access to “mainstream” health care for low-income individuals and families. The federal government would make payments to states to pay for half or more of their costs in furnishing services to beneficiaries. At the same time, the program was framed to give states considerable latitude in fashioning their medical assistance programs. States that elected to participate in the program were required to furnish a core set of basic health services to public assistance recipients. They were also allowed to offer additional services at their option and could elect to serve “medically needy” individuals who did not receive public assistance. Then, as now, the Medicaid program combined federal mandates and state-selected options with respect to who receives services and what services are offered.
The past four decades have seen many changes in federal Medicaid law, including significant modifications in eligibility, benefits, payment arrangements, and other administrative details. The cumulative effect of these changes -- combined with state decisions regarding the scope of their programs -- has been to expand Medicaid well beyond its original focus on furnishing principally acute care services to public assistance recipients. In addition, Medicaid has become the dominant funder of long-term services for people with disabilities. Despite the myriad changes in federal law, the fundamental nature of the program’s federal-state relationship has not changed appreciably.
From 1965 to 1980, federal Medicaid law changed in a variety of ways. In 1972, the Supplemental Security Income (SSI) program was created. This federally-funded income assistance program for people with disabilities replaced the preceding federal-state “aged, blind and disabled” cash assistance programs. Medicaid eligibility was linked to SSI eligibility.5 Other changes during this period included adding the 1967 requirement6 that states operate Early and Periodic Screening, Diagnosis and Treatment (EPSDT) programs for children and giving states the option to cover Intermediate Care Facilities for the Mentally Retarded (ICFs/MR).7
The 1980s saw many expansions in both mandatory and optional eligibility groups, especially focused on extending Medicaid benefits to low-income pregnant women and children who do not receive public assistance payments.8 The Omnibus Budget Reconciliation Act of 1981 (OBRA-81)9 required that states make additional Disproportionate Share Hospital (DSH) payments to hospitals that serve especially large numbers of Medicaid and other low-income individuals. OBRA-81 also added two new important waiver authorities. In particular, Section 1915(b) of the Social Security Act gave states greater latitude to employ managed care and other care management approaches in their programs. The addition of §1915(c) allowed states to launch home and community-based services (HCBS) waiver programs to provide a wide range of services -- including those not covered under the Medicaid state plan -- to assist individuals with disabilities who otherwise require institutionalization to remain in the community.
The Omnibus Budget Reconciliation Act of 198710 included “nursing home reform” provisions to bolster protections for nursing facility residents, including requirements for additional screening and treatment of individuals with mental illnesses. In 1989, Congress revised and strengthened the EPSDT program to mandate that states furnish all medically necessary services to eligible children.11
The 1990s saw more changes in the program. The Personal Responsibility and Work Opportunities Act (PRWOA) of 199612 (otherwise known as “welfare reform”) severed the historical link between Medicaid eligibility and the Aid to Families with Dependent Children (AFDC) cash assistance program. The AFDC program was replaced by the Temporary Assistance to Needy Families (TANF) block grant program. A new mandatory Medicaid eligibility group was established for low-income households; eligibility for Medicaid was no longer automatically tied to receipt of public assistance cash payments.13 The passage of PRWORA also included major changes in eligibility for legal immigrants.14
In 1997, the State Children’s Health Insurance Program (SCHIP) was created to offer states additional funding to extend Medicaid services to children in low-income households or provide them an alternative package of benefits.15 The 1990s also saw limits imposed on DSH payments as well as state’s use of “provider taxes” and donations to capture additional federal dollars.16 Also in 1997 and 1999, Congress changed Medicaid law to permit states to continue Medicaid benefits for workers with disabilities who are no longer eligible for SSI (these provisions are discussed in more detail in Chapter 3).17
An especially noteworthy development during the 1990s was the expanded use of managed care arrangements in Medicaid. In 1996, about 40 percent of Medicaid beneficiaries nationwide were enrolled in managed care; by 2003, the figure had climbed to more than 59 percent.18 This shift to managed care delivery systems also significantly affected Medicaid mental health services in many states. Chapter 6 discusses Medicaid managed care service delivery arrangements in more depth.
In the Balanced Budget Act of 1997, Congress gave states new options to implement managed care approaches without having to seek special waivers. The 1990s also saw expanded state use of the Social Security Act’s Section 1115 Research and Demonstration waiver authority in conjunction with state initiatives to extend health care to uninsured individuals previously ineligible for Medicaid.
Most recently, states have been allowed to employ the Section 1115 waiver authority to extend services on a targeted basis to low-income uninsured individuals and families who would otherwise not qualify for Medicaid. Also, states are encouraged to employ the waiver authority to test alternative service delivery approaches. Finally, through the President’s New Freedom Initiative, federal policies are being clarified to encourage states to promote community living for people with disabilities of all ages, including the expanded use of “consumer-directed” approaches in long-term services and supports (discussed in Chapter 7).
Since its enactment, federal Medicaid law has been modified many times. Federal mandates have increased, especially in the area of services for low-income children. However, the effect of most changes has been to expand the options available to states in designing and administering their Medicaid program. Today, states may offer a wider range of Medicaid services to a broader range of low-income children and adults. States retain considerable flexibility in crafting their Medicaid programs, a principle inherent in Medicaid from its beginning.
The combination of Medicaid mandates and options has resulted in the emergence of 51 highly distinctive Medicaid programs that operate under broad national guidelines but have been shaped by state decisions about who is eligible and what they are eligible to receive.
Changes in federal Medicaid law and policy have been beneficial for people with disabilities, including working-age adults with serious mental illnesses. They have permitted states to employ Medicaid to support people with disabilities in the community. However, as emphasized in Chapter 1, Medicaid cannot meet all the needs of people with serious mental illnesses across all dimensions of community living.
Medicaid plays an especially important role in supporting low-income people with disabilities, including working-age adults with serious mental illnesses. There are about seven to eight million Medicaid beneficiaries with disabilities (about 19 percent of all beneficiaries). An estimated 30 percent of children with chronic conditions and 15 percent of adults with chronic disabilities are Medicaid beneficiaries.20 In 2002, Medicaid beneficiaries with disabilities accounted for an estimated 43 percent of all Medicaid outlays. As a group, people with disabilities account for the largest proportion of Medicaid expenditures; in contrast, children comprise about 50 percent of beneficiaries but account for only 18 percent of total outlays.
Medicaid has several essential, fundamental features. These features are described here briefly in the context of the “basic” Medicaid program. Some of these features may be altered by waivers of federal Medicaid law that states may obtain. The final section of this chapter briefly describes the three waiver authorities that are included in federal law and their effect on the features described here.
Federal-State Relationship
Medicaid was originally structured as and remains a cooperative federal-state venture through which the federal government financially assists states in providing medical assistance, rehabilitative and other services to eligible low-income individuals and families. Within broad national guidelines contained in federal law, regulations and other policies, states obtain federal financial participation in their costs of furnishing services to low-income individuals and families. This federal-state relationship is a cornerstone of Medicaid. Federal policy dictates that states observe fundamental guidelines but in large part allows them to determine the scope of their programs.
Medicaid is very much a state-shaped program. Therefore, each Medicaid program looks and operates very differently. The design of a Medicaid program is based on each state’s demographics, health policy goals, objectives, needs, and financial capabilities. States are responsible for: (1) establishing eligibility standards within federal parameters; (2) setting the type, amount, duration, and scope of services; (3) determining payments for Medicaid services; and (4) administering the program.
Each state spells out its Medicaid program in a Medicaid state plan.21 The state plan specifies the eligibility groups that the state serves, the benefits provided, and other aspects of how the state operates its program. Each state’s plan (and amendments to the plan) must be approved by the federal Centers for Medicare and Medicaid Services (CMS; formerly, HCFA -- Health Care Financing Administration) at the U.S. Department of Health and Human Services. The CMS Center for Medicaid and State Operations (CMSO) has lead federal responsibility for Medicaid. There are ten CMS Regional Offices located around the country, which are responsible for reviewing and approving most proposed changes in each state’s Medicaid program, and assuring that they operate in compliance with the approved state plan, applicable federal regulations, and other CMS program guidance.22
Federal law dictates that each state designate a single state Medicaid agency (SSMA) that is responsible for the administration of its program. The SSMA has responsibility for the implementation of the state plan. The SSMA may not delegate its responsibilities to another state agency, although it may enter into cooperative agreements with other state agencies to administer certain aspects of the program under the supervision of the SSMA. This topic is discussed in Chapter 7.
Federal law concerning the Medicaid program is in Title XIX of the Social Security Act.23 Federal regulations governing the program are located in Parts 430 et seq. of Title 42 of the Code of Federal Regulations (CFR).24 Additional federal guidance concerning the operation of Medicaid programs is contained in the State Medicaid Manual25 as well as letters, memoranda and technical assistance guides issued by CMS from time-to-time.26
Federal Payments to States
The amount of money that each state receives for Medicaid services is determined by the Federal Medical Assistance Percentage (FMAP). This percentage is applied to state expenditures for services that are furnished to eligible individuals. The resulting federal payment to a state is termed federal financial participation. The FMAP is calculated each year by comparing a state’s average per capita income level with the national average. The higher a state’s per capita income, the lower its FMAP. However, the minimum FMAP is 50 percent and the maximum is 83 percent.27 The average FMAP across all states is about 57 percent, meaning that for every dollar spent on Medicaid services, the states provide 43 cents.
Because Medicaid is an entitlement program, federal financial participation in the cost of Medicaid services is contributed on an open-ended basis -- i.e., there is no cap on federal payments to states for Medicaid.28 States manage their Medicaid expenditures by selecting covered benefits, eligibility parameters, payments, and other methods.
States must provide matching dollars from their own public funds or a combination of their own funds and local tax dollars.29 In some states (e.g., New York), counties are required to provide a portion of the state’s matching fund obligation.
Under federal law, Medicaid is termed a “payor of last resort.” With a few exceptions, Medicaid payment is only available if no other funding sources are able to pay for a service provided to a beneficiary. If, for example, a beneficiary also has employer health insurance, Medicaid payment is only available to the extent that the service is not covered by that health insurance. States are required to seek “third-party” payments whenever feasible.
States can also claim matching federal dollars for the costs associated with the administration of the Medicaid program. Functions that are eligible for such funding include day-to-day program administration and the costs of processing and paying claims submitted by providers for services furnished to beneficiaries. The base rate of federal financial participation in state Medicaid administrative costs is 50 percent. However, higher rates are available for certain activities, including the development and operation of automated Medicaid claims processing systems. Chapter 7 discusses how federal financial participation in administrative costs can be used to strengthen the provision of Medicaid services to working-age adults with serious mental illnesses.
Eligibility Groups
Federal Medicaid law includes more than fifty distinct eligibility groups to which states may offer Medicaid services -- some mandatory and most optional. These groups are defined by income and resource tests and, in some cases, disability or other tests. Eligibility groups are also classified as “categorically needy” or “medically needy.” The latter comprises persons whose income is too high to qualify for Medicaid but, at state option, can spend down their excess income to become eligible.
An individual qualifies for Medicaid by being a member of a federally-recognized eligibility group that a state includes in its plan and by meeting the income and resource tests associated with the group, as spelled out by the state. Being a low-income person does not automatically translate into Medicaid eligibility. For example, low-income childless adults without disabilities cannot qualify for Medicaid unless the state operates a waiver program covering this population. As seen in Figure 2-1 on the following page,30 children comprised about one-half of all Medicaid beneficiaries in 2003, with older adults and people with disabilities together making up only about 30 percent of beneficiaries.31 Chapter 3 discusses Medicaid eligibility in greater detail and how it relates to adults with serious mental illnesses.
Beneficiary Cost Sharing
Depending on how they are eligible for Medicaid and the particular state in which they live, categorically eligible beneficiaries may be required to pay nominal deductibles, coinsurance or co-payments in order to receive services. States have some discretion to decide who will pay for services and how much they must pay. However, some groups are exempt from cost sharing requirements. These include: pregnant women and children under 18 at or below 100 percent of the Federal Poverty Level (FPL). Nursing home residents must make contributions toward the cost of their institutional care if they have income in excess of their personal needs allowance. In addition, states are prohibited from imposing cost sharing for family planning or emergency services. Medically needy beneficiaries also must make out-of-pocket payments for health services in order to qualify for Medicaid. Workers with disabilities who qualify under “buy-in” options also may be required to pay premiums if their income exceeds certain levels. Individuals and families who receive Medicaid services through a waiver, but would not otherwise qualify for Medicaid, also may be required to make premium payments.
Just as states are required to cover certain mandatory populations in their Medicaid programs, the same is true about the scope of benefits that states offer. Under federal law, every state must offer fourteen basic mandatory services to all categorically needy eligibility groups. Above and beyond the mandatory services, a state may elect to include other optional benefits in its program. If a state elects to include an optional benefit, it is subject to the same standards regarding amount, duration and scope (discussed later) as mandatory benefits when provided to categorically needy individuals. Table 2-1 and Table 2-2 on the following page list the mandatory and optional Medicaid benefits.
With respect to many of these optional benefits, it is important to point out that states have considerable latitude in defining the specific services they offer within an optional coverage category. For example, states that employ the rehabilitative services option to support individuals with serious mental illnesses include different mixes of services under their coverages.
Except for institutional services for children and youth under age 22 and older persons age 65 and above, federal law does not delineate a distinct set of mental health benefits. Such benefits are furnished under the broader mandatory and optional coverage categories. For example, medications fall under the prescribed drugs category. States provide mental health services to working age adults with serious mental illnesses under the clinic or rehabilitative services categories; but neither category is reserved exclusively to mental health services. Medicaid coverages that are especially pertinent in supporting working age adults with serious mental illnesses are discussed in greater detail in Chapter 4 and further illustrated in Chapter 5.
Figure 2-1
In the case of medically needy individuals, federal requirements regarding benefits are less prescriptive than those for the categorically needy. Just as states are required to cover certain populations to get federal matching payments for services provided under the medically needy option, they also must cover certain benefits such as prenatal and delivery care for pregnant women and ambulatory care for children. However, they are not required to provide mandatory and optional benefits to medically needy individuals at the same level as for categorically eligible individuals.
The statutory distinction between mandatory and optional services is long-standing. However, it is worth noting that about two-thirds of Medicaid spending nationwide goes toward the purchase of optional services. Some optional services (e.g., prescribed drugs) are offered by every state. About 83 percent of spending on optional services is for services for people with disabilities and older persons.32
| TABLE 2-1: Mandatory Medicaid Benefits | |
|---|---|
|
|
| TABLE 2-2: Optional Medicaid Services | |
|---|---|
|
|
In the Medicaid program, states are responsible for developing their own medical necessity criteria. Often these criteria are embedded in states' limitations on the amount, duration, and scope of services. Medicaid beneficiaries are entitled to covered services that are medically necessary to meet the person's needs. A state may deny payment for a service that is not considered medically necessary even if it arguably falls under a state benefit. Depending on a state's definition, this could occur if an individual's diagnosis does not warrant such an intense level of treatment (even if the treatment is generally covered by the state). For example, states often limit the provision of Medicaid mental health rehabilitative services to individuals whose mental illness has resulted in substantial life limitations. States may also require prior authorization before a service is furnished to a beneficiary in order to determine its necessity. States also engage in utilization review and management to ensure that services furnished to beneficiaries are medically necessary.
Amount, Duration, and Scope of Services
Within broad federal guidelines and certain limitations, states may establish limits on the amount, duration, and scope of the services offered in their Medicaid plan. For example, states may limit the number of outpatient mental health visits covered in a year or limit the number of hours of community support furnished each month. However, the limitations must be crafted so that each covered benefit is "sufficient in amount, duration, and scope to reasonably achieve its purpose."33 To illustrate, a state that has chosen to offer intensive day treatment under the rehabilitation option cannot limit that to two sessions per year, as that would obviously be insufficient to achieve the intended effect of the treatment.
Also, a state may not arbitrarily deny or reduce the amount, duration, or scope of a service based on a beneficiary's diagnosis, type of illness, or condition.34 This restriction is relevant for all categorically needy individuals, even those whose eligibility depends upon a specific diagnosis, such as women in need of treatment for breast or cervical cancer.
The amount, duration, and scope limitation must uniformly apply to all categorically needy beneficiaries in a state's plan, regardless of whether they are mandatory or optional beneficiaries. However, it does not apply to groups of medically needy beneficiaries. States have more flexibility in restricting benefits to this group of beneficiaries. There is one benefit on which states are not permitted to place limitations of amount, duration, and scope: EPSDT services for children under 21.
Comparability
Any Medicaid benefit offered to a categorically eligible individual must be offered to all categorically eligible individuals,35 except when federal law itself creates an exception (e.g., as in the case of ICF/MR services which may only be furnished to persons with mental retardation and other related conditions). A state cannot alter the benefit package so that, for example, dental services are available to SSI recipients but not other categorically eligible adults. Contingent on any amount, duration, and scope limitations, dental services must also be available in the same quantity to all categorically needy beneficiaries. An exception to the comparability requirement is "targeted case management." Under the provisions of Section 1915(g) of the Social Security Act, states may "target" case management services to specific subpopulations of Medicaid beneficiaries, such as persons with serious mental illness or pregnant women under age 21.
Statewideness
States are required to offer the services in their Medicaid benefit package to all eligible recipients without regard to geographic location.36 For example, a state cannot offer services under the clinic option to persons in urban areas but exclude access to these same services to people living in rural areas. Again, the exception to this rule is targeted case management. Not only can a state target its case management option to a specific population, it can also limit its availability to one or more specific areas of the state.
Free Choice of Provider
Medicaid law (Section 1902(a)(23) of the Social Security Act) provides that beneficiaries must be free to choose a provider from among all qualified participating providers, except as specifically provided by law.37 The principal exception to this fundamental and longstanding requirement is when a state has secured federal approval to employ a managed care service delivery model or employ a physician case management model.
Provider Requirements
States have latitude in establishing the requirements that Medicaid providers must meet. Providers, of course, must possess any licenses or meet other requirements specified in state law that pertain to the provision of a service. In the case of a few services (e.g., nursing facility or ICF/MR), providers are required to meet very detailed standards that are spelled out in federal law and/or regulations. Once a state has established its requirements, then the state must offer a provider agreement to any willing provider that meets the state's requirements, agrees to accept Medicaid payment, and abide by other fundamental requirements. The main exception to the open enrollment of qualified providers again arises in managed care service delivery models.
Beneficiary Protections
Federal Medicaid law provides certain basic protections for all beneficiaries.38 Specifically, each state must make the Medicaid Fair Hearing appeal process available to any individual who has been denied eligibility, who has been denied a service, whose services would be reduced or terminated, or who faces loss of eligibility. The state must notify beneficiaries in advance before an "adverse action" affecting Medicaid coverage takes effect and include an explanation of their rights regarding the Fair Hearing process, including the right to an evidentiary hearing conducted by an impartial, uninvolved official (e.g., an administrative law judge). As long as an individual requests a hearing on a timely basis, services must be continued through the duration of the hearing process. In pursuing an appeal, beneficiaries have the right to enlist other individuals to assist them in pursuing the appeal (e.g., peers, friends, families, advocates, attorneys).
Payments for Services
Except in the case of capitated managed care arrangements, Medicaid operates in a "fee-for-service" framework. Providers are paid for each distinct service they furnish to a specific Medicaid beneficiary. Payments are "unit" based -- e.g., a provider is paid for a "visit," an hour or partial hour of service or, in the case of institutional services, a "day." Medicaid payments are made after the provider submits a "claim" for services that specifies the service rendered, the date of service and the beneficiary to whom the service was provided. In the fee-for-service framework, advance payments for services may not be made. Provider claims for services are processed through claims processing systems. These systems verify the beneficiary's eligibility and check other elements of the claim. With some exceptions, federal Medicaid law requires that payments to providers be made directly by the state to the provider. In short, Medicaid does not operate as a "grant" program but instead is structured to pay for discrete services furnished to beneficiaries. Payments are discussed in more depth in Chapter 7.
States have latitude in establishing payment amounts for services and units of reimbursement. Federal law (Section 1902(a)(30) of the Social Security Act) directs states to assure that "payments are consistent with efficiency, economy, and quality of care, and are sufficient to enlist enough providers so that care and services are available under the plan." In general, providers cannot charge Medicaid more than they charge other payers for the same service. In addition, providers may not charge beneficiaries an additional amount over and above the amount that they receive from Medicaid because the Medicaid payment is considered "payment in full."
Under a managed care arrangement, a state may make capitated prepayments to managed care organizations to furnish the full range of contracted services to enrolled beneficiaries. The amount of such payments must be based on data concerning the costs of serving beneficiaries under a fee-for-service arrangement.
Federal Medicaid law allows the Secretary of Health and Human Services (HHS) to grant waivers of various statutory provisions that normally govern the operation of a state's Medicaid program. Since the early 1990s, the use of these waiver authorities has increased, including their use to provide services for individuals with serious mental illnesses. Waivers allow states to receive federal financial participation for covering individuals and/or services in ways that would not ordinarily be permitted. Depending on the type of waiver, a state can "waive" requirements such as comparability and statewideness to provide a targeted benefit package to individuals with a specific medical condition or who live in a certain geographic area. Chapter 6 has an indepth discussion of the use of waiver authorities in serving individuals with serious mental illnesses. Here, the three main types of waivers -- Section 1115, Section 1915(b) and Section 1915(c) -- are outlined.39
Under Section 1115 of the Social Security Act, states may gain permission from the Secretary of HHS to use federal Medicaid dollars to cover groups of individuals and/or services not otherwise matchable, or to demonstrate alternative approaches to furnishing services to beneficiaries. The 1115 demonstration authority is relatively broad, allowing the waiver of a wide range of statutory requirements. In order to obtain federal approval of an 1115 demonstration, a state must demonstrate "budget neutrality," meaning that federal spending will not be more than what it would have been in the absence of the demonstration.
The 1115 waiver authority requires a research and demonstration component. States must arrange for an independent evaluation of the waiver to determine how successful they were at achieving their goal(s). States have employed 1115 demonstrations to expand Medicaid services to include uninsured individuals and families who could not otherwise be covered. The authority also has been used on a more targeted basis to test different ways of serving Medicaid beneficiaries. Once an 1115 demonstration is approved, it usually expires after five years. As discussed in Chapter 6, some 1115 waiver programs include mental health services.
A 1915(b) waiver is commonly referred to as a "freedom of choice" waiver (because it permits a state to waive the free choice of provider requirement). It also provides for waivers of comparability of services and statewideness requirements. Originally, 1915(b) waivers were most commonly used by states to implement managed care programs by restricting beneficiaries' choice of providers. However, the 1997 Balanced Budget Act allowed states to employ managed care for certain Medicaid beneficiaries through a state plan amendment rather than a waiver. Still, the 1915(b) waiver authority can be used to create a "carve out" system of managed care delivery for specialized services such as mental health services, as well as target certain services to a particular region or segment of the population.
Unlike the 1115 demonstration waiver authority, a state cannot use a 1915(b) waiver to expand eligibility. By law, 1915(b) waivers are approved for an initial two-year period and may be renewed for additional two-year periods. By statute, a 1915(b) waiver program must be "cost effective" -- i.e., the per-beneficiary costs must be no greater than the costs of serving individuals in the absence of a waiver program. As discussed in Chapter 6, several states furnish mental health services through Section 1915(b) waiver programs.
1915(c) Home and Community-Based Services Waivers
The 1915(c) waiver authority permits states to provide services (e.g., personal care, respite, habilitation, case management) to individuals who would otherwise require and be eligible for institutional services in a hospital, nursing home facility or ICF/MR. States must demonstrate that the average per person costs of furnishing home and community services does not exceed the average per person cost of institutional services to persons in the target group. Section 1915(c) permits states to obtain a waiver of Medicaid's comparability and statewideness requirements as well as extend institutional financial eligibility rules to people in the community. The waiver of comparability permits a state to target services to specific groups of beneficiaries (e.g., individuals with developmental disabilities). In addition, a state may limit the number of individuals who participate in a program. Many of the benefits that a state may offer through an HCBS waiver cannot ordinarily be offered under the Medicaid state plan. As discussed in Chapter 6, this waiver authority has not been used frequently to support working age adults with serious mental illnesses.
Medicaid is a linchpin in meeting the health needs of low-income individuals and families in the United States. It has grown enormously in scope and depth over the past four decades. During that time, federal policy has evolved considerably. Within federal parameters, states have substantial flexibility in crafting their Medicaid programs with regard to who will be served and which services will be offered. To incorporate Medicaid financing into systems that support working-age adults with serious mental illnesses, states must examine how they can employ Medicaid's flexibility to advance their goals and objectives.
The next chapter discusses in detail how federal rules affect Medicaid eligibility for adults with serious mental illnesses. A state's eligibility policies play a critical role in determining the extent to which people with serious mental illnesses can receive Medicaid services.
Understanding Medicaid Home and Community-Based Services: A Primer (2000). Washington, DC: US Department of Health and Human Services; Office of the Assistant Secretary for Planning and Evaluation.
The Primer is a comprehensive publication that describes how Medicaid can be used to support individuals with disabilities in the community. It provides detailed explanations of Medicaid policy, including financial and service eligibility, as well as information regarding coverage design, community transition, and cost-effectiveness issues. It also contains many state examples to assist states in designing their own community-based Medicaid coverages for people with disabilities.
King, M. & Christian, S. (1999). Medicaid Survival Kit. Washington DC: National Conference of State Legislatures
Originally published in 1996 and updated in 1999, the NCSL Medicaid Survival Kit is a comprehensive resource designed to help policymakers understand Medicaid's rules, regulatory structure, and options. It provides: (1) a clear, detailed presentation of the Medicaid program and its eligibility groups, (2) complete information about programmatic choices available to states within the current federal structure, and (3) examples of how states combat cost increases and implement efficient health care delivery. Available for purchase at www.ncsl.org/public/catalog/pubs.cfm?topic=Health&topiccode=xhlt
Rowland, D. & Garfield, R. (2000). Health Care for the Poor: Medicaid at 35. Health Care Financing Review, 22(1): pp. 23-34.
This article describes the history of Medicaid from its inception in 1965 to the present. This historical perspective examines relevant legislation as well as the evolution of the program. The article discusses current challenges concerning Medicaid at the state and federal levels and potential ways of addressing them. Available at cms.hhs.gov/review/00fall/00fallpg23.pdf
Schneider, A., Elisa, R., Garfield, R., et al. (2002). The Medicaid Resource Book. Menlo Park CA: The Kaiser Commission on Medicaid and the Uninsured. (215 pages).
This publication provides comprehensive information concerning Medicaid policy, focusing on four topics: eligibility, benefits, financing, and administration. It provides extensive information on the demographics of Medicaid beneficiaries, expenditure and financing data and trends, federal and state obligations and options, different types of waivers, and examples of specific state policies. It also contains a useful reference guide with the entire Medicaid legislative history, statutory index, and regulatory index. Available at www.kff.org/medicaid/2236-index.cfm
Because the Medicaid program is complex and multi-faceted, it can be difficult to keep abreast of new developments and their implications for specific groups of beneficiaries. In the case of mental health services, CMS, the Bazelon Center on Mental Health Law and the National Alliance for the Mentally Ill (see Chapter 1) regularly make information available on their web sites concerning Medicaid developments of interest in the arena of mental health services. Other sites include:
Centers for Medicare and Medicaid Services
cms.hhs.gov/medicaid/
The CMS web site has extensive resources concerning the Medicaid program, including program descriptions, state specific information, and descriptions of major CMS initiatives, including those related to the President's New Freedom Initiative.
Kaiser Commission on Medicaid and the Uninsured
http://www.kff.org/about/kcmu.cfm
The Kaiser Commission provides information and analysis on health care coverage and access for the low-income population, with a special focus on Medicaid's role and coverage of the uninsured. It publishes a wealth of information on numerous Medicaid topics. It is an especially well-respected information source.
State Medicaid Agency Web Sites
www.cms.gov/medicaid/allStateContacts.asp
Since Medicaid programs vary appreciably from state-to-state, it is important to keep abreast of developments at the state level. State Medicaid agency contact information and web sites are located at this URL.
Kaiser Commission on Medicaid and the Uninsured (1999). Medicaid 101: A Primer. Washington DC
Brian Burwell, Kate Sredl, and Steve Eiken (May 2004). Medicaid Long-Term Care Expenditures in FY 2003. The MEDSTAT Group (Cambridge MA).
P.L. 89-97 (Social Security Amendments of 1965).
The Social Security Act Amendments of 1950 provided for federal financial participation in state “vendor payments” for health care services furnished to Aid to Families with Dependent Children (AFDC) and “aged, blind and disabled” cash assistance recipients. However, the amount of such payments was limited by formula. This state-managed “vendor payment” approach shaped the structure of the Medicaid program. The Kerr-Mills Program was created in the Social Security Bill of 1960. This program provided open-ended federal matching payments for state expenditures for health and other services provided to indigent older persons and, subsequently, people with disabilities. States had wide latitude in deciding what services they would furnish to individuals. Prior to the enactment of Medicaid, there were wide variations in state programs and ten states did not purchase health care services of any type for cash assistance recipients. The history of the enactment of Medicaid and its early implementation period is found in: Robert Stevens and Rosemary Stevens (1974). Welfare Medicine in America: A Case Study of Medicaid. New York: The Free Press. See also Rowland, D. & Garfield, R. (2000). Health Care for the Poor: Medicaid at 35. Health Care Financing Review, 22(1): pp. 23-34.
P.L. 92-603 (Social Security Amendments of 1972).
P.L. 90-248 (Social Security Act Amendments of 1967).
P.L. 92-223 (Act of December 14, 1971).
The expansion of Medicaid eligibility mandates and options began in 1988 when Congress mandated that states provide Medicaid coverage for pregnant women and infants with incomes up to 100 percent of the Federal Poverty Level (FPL). In 1989, mandatory Medicaid coverage of children under age 6 in households with incomes up to 133 percent of FPL was mandated. In 1990, Congress mandated the coverage of children ages 6 through 18 in households with incomes of up to 100 percent of FPL; this mandate was phased in and fully took effect in 2002. These mandates also were accompanied by options for states to expand coverage to children and pregnant women in households with incomes in excess of the FPL minimums.
P.L. 97-35 (Omnibus Budget Reconciliation Act of 1981)
P.L. 100-203 (Omnibus Budget Reconciliation Act of 1987)
P.L. 101-239 (Omnibus Budget Reconciliation Act of 1989)
P.L. 104-193
The §1931 family coverage was established. States were required to continue to cover families who met July 1996 AFDC-related eligibility criteria but also could provide for higher eligibility thresholds.
The legislation stipulated that individuals with legal resident status who entered the United States on or after August 22, 1996 are ineligible for SSI, Medicaid and other public benefits until they have been in the country at least five years. Immigrants who entered before that date -- as well as those who have remained through the five year window -- are coverable at state option. Most states have exercised this option.
P.L. 105-33 (Balanced Budget Act of 1997).
The ceiling on DSH payment adjustments and restrictions on the use of provider taxes and donations were contained in P.L. 101-234 (Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of 1991.) DSH ceilings also were lowered in the Balanced Budget Act of 1997 but modified in the Medicare, Medicaid, and SCHIP Improvement and Protection Act (P.L. 106-554).
P.L. 105-33 (Balanced Budget Act of 1997) and P.L. 106-170 (Ticket to Work and Work Incentives Improvement Act of 1999)
This section draws from The Kaiser Commission on Medicaid and the Uninsured (May 2003). Medicaid: Fiscal Challenges to Coverage. Washington, D.C.
The Kaiser Commission on Medicaid and the Uninsured (April 2001). Medicaid’s Role for the Disabled Population Under Age 65. Washington, D.C.
Federal statutory provisions concerning the state Medicaid plan are contained in §1902 of the Social Security Act.
A list of CMS Regional Offices is at cms.hhs.gov/about/regions/professionals.asp
Located at www.access.gpo.gov/nara/cfr/waisidx_02/42cfrv3_02.html
Some of this guidance takes the form of “state Medicaid director” letters. These letters are located on the web at www.cms.gov/states/letters/default.asp. More guidance also is found at cms.hhs.gov/states/
There are a few services (e.g., family planning) for which there is a uniform rate of federal financial participation set in statute. In the Jobs and Growth Tax Reconciliation Act of 2003 (P.L. 108-27), Congress temporarily increased each state’s FMAP (including states at the FMAP minimum) by 2.95 percent for the period April 2003 through June 2004 to provide states additional federal assistance.
However, in the case of the territories, federal financial participation is limited to a specific amount set by Congress.
See 42 CFR 457.220.
The Kaiser Commission on Medicaid and the Uninsured (May 2003), op. cit.
Based on the number of Medicaid enrollees at any given time during the year. The categories of children and adults do not include beneficiaries with disabilities; the category of people with disabilities does not include adults 65 and over (they are in the Older Adults category).
The Kaiser Commission on Medicaid and the Uninsured (May 2003), op. cit.
42 CFR 440.230(b).
42 CFR 440.230(c).
42 CFR 440.240.
§1902(a)(1) of the Social Security Act; 42 CFR 431.50.
Also, 42 CFR 431.51.
§1902(a)(23) of the Social Security Act; also 42 C.F.R. 431.200-.250.
These waivers are "named" after the respective sections of the Social Security Act that authorize their use. From here on, they are referred to simply as 1115, 1915(b), and 1915(c) waivers.
| Federal policy establishes the fundamental parameters concerning the groups of individuals that a state may serve in its Medicaid program. This chapter explains Federal requirements and options that determine Medicaid eligibility for working-age adults with serious mental illnesses. |
In order to receive the mental health and other benefits that a state covers in its Medicaid program, working-age adults with serious mental illnesses must meet state eligibility criteria. Medicaid is a means-tested program; that is, eligibility depends on whether individuals’ income and resources are at or below specified threshold levels. Medicaid eligibility also hinges on whether the person meets other categorical requirements, such as disability criteria. Federal law gives states latitude to expand Medicaid eligibility for people with disabilities beyond fundamental federal mandates.
This chapter describes federal policies that affect Medicaid eligibility for working-age adults with serious mental illnesses, including the eligibility expansion options available to states. There are many intricacies to Medicaid eligibility, both in federal policy and within each state’s policies. While Medicaid eligibility criteria are described in some detail, the chapter’s main purpose is to provide an overview rather than explore every intricacy. When assessing the role that Medicaid might play in supporting working-age adults with serious mental illnesses in the community, it is important to become familiar with the state’s eligibility policies, including whether such policies might be changed to improve access.
The chapter devotes considerable attention to the interplay between Medicaid eligibility and employment. Recent changes in federal law and policy permit states to continue Medicaid eligibility for people with disabilities who work. Because employment is important for working-age adults with serious mental illnesses, these policy changes -- if adopted in a state -- can allow individuals to continue receiving Medicaid benefits when their recovery leads to employment.
At the outset, it is important to stress that the extent to which working-age adults with serious mental illnesses qualify for Medicaid is directly dependent on a state’s generic eligibility policies concerning non-elderly adults with disabilities. There are no special Medicaid eligibility groups reserved exclusively for people with serious mental illnesses. A state’s Medicaid eligibility policies may not exclude individuals with serious mental illnesses based on their diagnosis. Similarly, a state may not establish more liberal eligibility policies for individuals with serious mental illnesses than for people with other disabilities. Eligibility policy changes that might benefit individuals with serious mental illnesses must encompass all people with disabilities. The description of Medicaid eligibility that follows applies to working-age adults with serious mental illnesses insofar as they qualify for Medicaid by meeting generic disability, income and asset tests.
Some aspects of Medicaid eligibility pose special challenges for working-age adults with serious mental illnesses. Ways to identify and address these challenges are also discussed in this chapter.
The “Basic Features of Medicaid Eligibility” are summarized on the next page. Medicaid eligibility is rooted in two federally financed programs of cash assistance to help support low-income individuals and families: the former Aid to Families with Dependent Children (AFDC) program, which provided income support for low-income families with children, and the Supplemental Security Income (SSI) program for older persons, blind persons, and persons with disabilities. In 1996, welfare reform legislation replaced AFDC with a new program, Temporary Assistance for Needy Families (TANF), but maintained existing Medicaid eligibility criteria based on AFDC eligibility stand-ards for dependent children and parent(s).
Like AFDC/TANF and SSI, Medicaid is a means-tested entitlement program. That is, a person qualifies for Medicaid if: (a) their income and resources do not exceed the state threshold specific to their eligibility group and (b) they satisfy all other relevant eligibility criteria.
Medicaid eligibility rules fall into two basic sets: categorical and financial. The categorical set of rules defines specific categories of persons for whom federal law permits coverage. In the case of people with serious mental illnesses, the disability categorical group usually is the most pertinent. Medicaid criteria for determining who has disabilities are generally the same as SSI criteria, as established by the Social Security Administration. To qualify in a disability category, a person must have a long lasting, severe, medically determinable physical or mental impairment. Medicaid’s eligibility rules for persons with disabilities are also built on a foundation of Social Security Administration disability determination rules. But many exceptions and variations have been enacted over the years so that low-income persons who need health care but do not qualify for cash assistance may become eligible for Medicaid. With respect to the disability categorical group, the discussion of Medicaid eligibility includes: (a) persons who qualify for Medicaid by virtue of the receipt of SSI cash assistance or under more restrictive rules in some states (see explanation of 209(b) below) and (b) options that permit eligibility expansions to other individuals.
| Basic Features of Medicaid Eligibility2 | |
There
are five generic, broadly applicable parameters that govern Medicaid
eligibility:
|
Working-age adults with serious mental illnesses also may qualify for Medicaid by being a member of a low-income family with children or under special provisions that apply to low-income pregnant women. A person’s disability is not a criterion for eligibility in these groups; instead, the applicable criteria revolve around the composition of the household (which must include one or more children in the case of adults applying for family coverage) and income. While there is no direct tie between disability and Medicaid eligibility for adults in these households, there is considerable evidence that many adults in qualifying low-income households also have serious mental illnesses.4
Medicaid eligibility for people with disabilities is tied very closely to eligibility for SSI cash assistance, the federally administered program that ensures a nationally uniform income floor for persons who are elderly, who are blind, or who have disabilities.5 In many states, SSI beneficiaries are automatically eligible for Medicaid. However, there are some states (called 209(b) states) where Medicaid eligibility for people with disabilities is more restrictive than SSI requirements or where SSI beneficiaries are required to apply separately for Medicaid (“SSI-criteria states). In 209(b) states, SSI beneficiaries still must be granted Medicaid eligibility once they satisfy certain requirements (described below).
In order to be eligible for SSI, a non-elderly adult (age 18 to 64) must have a severe, medically determinable physical or mental impairment or impairments. The impairments that are the basis for SSI eligibility (and SSDI eligibility) are contained in the “Listings of Impairment” that are promulgated by and periodically revised by the Social Security Administration.6 The impairments in the Listings are similar to diagnoses. (The box, “SSI and SSDI”, (below) describes the similarities and differences between the two programs.)
For example, the Listings of Mental Impairments were drafted to parallel the Diagnostic and Statistical Manual, which is used to diagnose mental disorders, including mental illnesses such as schizophrenic, affective, and anxiety disorders.7 Not all impairments qualify a person for SSI. For example, individuals for whom “drug addiction or alcoholism is the contributing factor material to their disability” are not eligible for SSI and, therefore, ineligible for Medicaid on the basis of their disability.
Having a severe impairment (including a serious mental illness) is not sufficient to make a person eligible for SSI. In the case of adults,8 the impairment must be judged to be so severe that a person not only is unable to perform his or her previous work but “cannot, considering his [her] age, education and work experience, engage in any other kind of substantial gainful work.”
In 2005, a person’s inability to work is defined in part as having earnings less than $830 per month net of income-related work expenses. Earnings above this level are considered by regulation as evidence of a person’s ability to engage in substantial gainful activity (SGA).9 SSI eligibility is based on an individual’s having a listed severe impairment that causes the person to be unable to engage in regular work where the individual earns more than the SGA standard.
| SSI and SSDI | |
| The SSI
program sometimes is confused with the Social Security Disability Insurance
(SSDI) program.10 SSI
and SSDI both provide assistance to individuals with severe impairments who are
unable to work. The SSDI program makes payments to medically disabled
individuals who have worked and paid Social Security taxes for a minimum number
of years. SSI eligibility does not hinge on a person's previously paid Social
Security taxes; children also can qualify for SSI. An individual's SSDI
entitlement is based on work history. SSDI payments also are made to the "adult
disabled children" of deceased or retired workers. Some individuals receive
both SSI and SSDI payments, when the amount of their SSDI entitlement is less
than the standard SSI payment. Adults with disabilities who apply for Social
Security benefits are evaluated to determine whether they qualify for either
program; individuals who are determined eligible are assigned to the SSDI
program if they qualify and SSI if not. Because SSI and SSDI disability
criteria are the same, SSDI-only beneficiaries may also qualify for Medicaid
based on disability but usually in the "optional" eligibility groups. SSDI-only
beneficiaries have income that is higher than the income standard associated
with SSI eligibility. In 2001, there were 5.2 million "disabled worker" SSDI beneficiaries, 28 percent of whom had mental disorders other than mental retardation. In comparison, there were 3.8 million SSI beneficiaries between the ages of 18 and 64, including 35 percent who had mental disorders other than mental retardation.11 There were approximately 1.2 million individuals between the ages of 18 and 64 who received both SSI and SSDI public assistance benefits.12 |
The SSI program was created and structured to provide support to persons who have especially severe disabilities. Consequently, not all persons who have serious mental illnesses qualify for SSI. Anyone who does not meet SSI disability criteria cannot receive Medicaid in a disability category of eligibility, even if they have extensive medical needs or high medical bills. There are special exceptions that allow Medicaid eligibility for certain former child beneficiaries of SSI disability benefits as well as for persons who do not meet one or more of the usual SSI disability criteria because they earn more than $830 per month. These exceptions are discussed later in the chapter.
Thirty-nine states and the District of Columbia grant Medicaid to all individuals in any month in which they receive an SSI payment.13 Of these, thirty-three do so automatically, based on a list of SSI beneficiaries compiled by the federal Social Security Administration and transmitted to the states.14 The other seven states15 (known as SSI-criteria states) require that SSI beneficiaries file a separate application with the state for Medicaid benefits. The remaining 11 states16 follow what is known as the 209(b) exception option (described below) which allows them to provide Medicaid to SSI beneficiaries only if they meet the state’s criteria, which may be more restrictive than SSI.
In states where Medicaid eligibility is directly tied to receipt of SSI, SSI income and resource eligibility rules are followed. The general income eligibility rule for SSI specifies the level of “countable income” at or below which a person is financially eligible for benefits. Countable income includes cash income plus certain in-kind goods or services a person receives in a given month, minus certain amounts that are exempt from the SSI benefit calculation (discussed more fully below).
In 2005, the maximum monthly federal SSI benefit for persons with no more than $20 in other income is $579 for an individual and $869 for a couple.17 These maximum payment amounts are also known as the “Federal Benefit Rate” (FBR). Persons with income from other sources (e.g., Social Security or a pension) receive a lesser amount -- equal to the difference between the full SSI benefit rate and the amount of their countable income from other sources. For example, the SSI benefit for an individual with countable income of $540 would be only $39 per month. The general rule also defines countable resources as cash or other property, including real property, that (a) were acquired at some time in the past, (b) the individual has the right to access, and (c) could be converted to cash and used to cover current basic living needs. Individuals with up to $2000 ($3000 for a couple) in countable resources can qualify for SSI.18 SSI resource limits often serve as the basis for Medicaid resource eligibility.
There are two major exceptions to the general SSI income and resource eligibility rules: the state 209(b) option and protection for certain former SSI beneficiaries.
State 209(b) option19
Medicaid for the “Aged, Blind, and Disabled” historically had always been linked to receipt of cash assistance benefits. When SSI replaced state-only programs of aid for older persons and people with disabilities in 1972, it was expected to lead to large increases in the number of beneficiaries. The 209(b) option was enacted along with SSI in 1972 to allow states to avoid similarly large increases in Medicaid enrollment and costs. At present, there are eleven 209(b) option states.
Many Medicaid eligibility rules under the 209(b) option follow SSI rules. But states may choose, instead, to use some or all of the more restrictive Medicaid rules that were in effect in their state on January 1, 1972, shortly before SSI was enacted. Typically these states have retained at least some of their pre-SSI rules concerning countable income or resources. Only a few use more stringent criteria for determining blindness or disability.20
In general, 209(b) states have lower income and/or resource standards than states that key eligibility to the SSI FBR. Federal rules require that all 209(b) states counterbalance the potential negative effects of the 209(b) option on SSI beneficiaries. Any residents who are elderly, blind, or have disabilities -- including those with too much income for SSI -- must be allowed to “spend down” to the state’s Medicaid income standard if their expenses for medical services so erode their income that their “net” remaining income would be less than a standard set by the state. This requirement creates a medically needy-like program for this population, even in states that have not chosen specifically to cover the medically needy as an option, as is the case in Indiana, Missouri, and Ohio. Spend-down rules for 209(b) are virtually identical to spend-down rules for the medically needy (discussed below).
Medicaid protection for certain former SSI beneficiaries
Federal law also requires all states, including 209(b) states, to provide Medicaid to former SSI beneficiaries who would, but for increases in their Social Security benefits, continue to be eligible for SSI.21 Congress passed this provision in 1986 to ensure that annual Social Security increases -- intended to improve people’s lives -- did not harm this group by causing them to lose Medicaid as well as SSI.22 These individuals are treated as if they are still receiving SSI. Most of the individuals affected have incomes just marginally above the income levels at which they might qualify for SSI and Medicaid. In fact, many persons who could qualify for Medicaid under these provisions do not apply for the program, most likely because they are not aware of them. Improved understanding of these protections may help increase the Medicaid enrollment of this group.
The concept of countable income and resources may seem arcane but is important. As noted previously, neither SSI nor Medicaid determine eligibility by comparing a person’s total income and resources to the dollar thresholds that apply in the person’s eligibility category. Rather, both programs count only certain types and amounts. For this reason, an individual can have total income or resources that are higher than the nominal eligibility limits (i.e., higher than $579 in total income or $2000 in total resources for SSI) and still qualify for benefits.
SSI Rules
SSI rules reduce a person’s gross income in calculating countable income in three important ways. First, SSI disregards the first $20 of every applicant/recipient’s income, regardless of source. Second -- and of great significance to people with disabilities who work -- SSI provides an additional disregard of earnings from work, amounting to the first $65 plus one-half of the remaining earnings amount. This disregard of earned income contrasts with the treatment of unearned income (e.g., pensions or SSDI payments). Except for the basic $20 disregard, in general all unearned income is countable and reduces a person’s SSI payment.
Unearned income in excess of $599 (the $579 FBR plus the $20 universal disregard) precludes eligibility for SSI and thereby Medicaid, unless the state has another disability-related eligibility group for which the person qualifies. In the case of earned income, however, a significant portion is disregarded. SSI rules also contain additional work incentives, which are described in “SSI and People with Disabilities Who Work” on the next page.
Third, spouses or children with disabilities in families with other non-disabled members who are ineligible can qualify for SSI at higher gross amounts of family income. In such households, SSI counts only the portion of the non-disabled family member’s income that is left after SSI subtracts amounts to cover their basic needs. SSI also may apply several other special-purpose reductions.
| Example: SSI Treatment of Earned Income | |
| If an
individual with a disability has a job that pays $700 per month and has no
other unearned income, then SSI rules treat the person's earnings in the
following fashion: Gross income: $700 Disregards:
This person would receive a $271.50 SSI benefit ($579 - $307.50). Combined with the individual's earnings, the person would have $971.50 available ($700 in earnings plus the SSI benefit). Because the person is receiving an SSI benefit, she/he would also have Medicaid coverage. |
SSI rules also reduce gross resources in determining whether resources are below the SSI $2,000/$3,000 thresholds, by exempting the home (regardless of value) and (within limits) such things as an auto, household goods, surrender value of life insurance, burial funds, and property that is essential to self-support.23
SSI cash beneficiaries can secure Medicaid: (a) automatically in most states by virtue of their cash assistance status; (b) by applying for it in “SSI- criteria states;” or, (c) satisfying the rules employed in 209(b) states. There are other eligibility options available to states that permit them to extend Medicaid eligibility to people who have disabilities (based on SSA criteria) but who are not SSI cash beneficiaries. The following sections describe these options. These options often (but not exclusively) benefit SSDI beneficiaries whose SSDI entitlement disqualifies them from SSI. These individuals, of course, must meet the same disability impairment tests as SSI beneficiaries. Also, with respect to these optional eligibility groups, federal policy gives states additional latitude to depart from SSI rules concerning countable income and resources. This latitude (contained in §1902(r)(2) of the Social Security Act and described in more detail on the following page) may be used by a state to (1) extend Medicaid eligibility to low-income people with disabilities who might not qualify under SSI rules, and (2) to encourage such persons to obtain employment.
| SSI and People with Disabilities Who Work | |
Eligibility for SSI (and SSDI) is assessed by
whether a person can engage in "substantial gainful activity" (SGA). SGA is
measured in part by whether a person's earnings, after deducting work expenses,
are $830 or less per month. A concern is that, once a person's earnings exceed
$830 per month, she or he will be dropped from SSI and, thereby, potentially
lose Medicaid benefits. As a result of changes enacted in 1986, which added
Section(§)1619(a) and §1619(b) to the Social Security Act, federal SSI policy
provides opportunities for SSI beneficiaries to obtain work and still retain
SSI benefits even if their earnings exceed the SGA level, and to retain
Medicaid benefits at even higher levels of earned income.24
Other work incentives available to SSI beneficiaries include: (a) Plan for Achieving Self-Support (PASS) and (b) the impairment-related work expense (IRWE). Both incentives permit SSI beneficiaries to purchase employment supports by sheltering earned income. These additional work incentives help avoid reductions in a person's SSI benefit during the period when they are entering or re-entering the workforce. |
The majority of eligibility pathways for individuals with serious mental illnesses are based, at least in part, on their disability status. Table 3-1 on the following page shows these different eligibility options and the number of states that use them, as well as basic financial and other requirements. Omitted from this table are the few options for enrolling persons with serious mental illnesses based on non-disability criteria. However, all relevant options are discussed in this section.
Many working-age individuals who are eligible for Medicaid under the options described in this section are also eligible for Medicare benefits. Dual eligibility is described in the “Medicare-Medicaid Dual Eligibles” section on the following pages.
Many states supplement the basic SSI payment and pair these state supplementary payments (SSP) with automatic Medicaid eligibility. These states have elected to spend state-only, unmatched money to supplement the basic SSI FBR in circumstances where they have determined that rate to be insufficient to cover living expenses necessary for minimally adequate living standards. These state supplements are state-determined and vary widely by state. Some states provide across-the-board supplements to SSI-eligible persons. Several states provide supplements to individuals who live in designated types of community residences or for other reasons. In states that provide supplements, the effect of the supplement is to increase the income standard from the SSI FBR to the SSI FBR plus the amount of supplement for which a person qualifies. Some individuals have too much income to qualify for SSI cash assistance but may qualify for an SSP benefit only. States can elect to make such persons automatically eligible for Medicaid, just as they can for SSI beneficiaries. Automatic Medicaid eligibility for state supplement beneficiaries provides an additional measure of assistance in paying for needed medical services. States have broad flexibility with respect to not only the level of SSP support but also the criteria under which supplements are offered. Individuals with serious mental illnesses who receive SSP benefit from this expansion of Medicaid eligibility.
| TABLE 3-1: Medicaid Eligibility Options for Working-Age Adults with Disabilities | ||||||
|---|---|---|---|---|---|---|
| Medicaid Eligibility Option | # of states | Income Limit | Required Age Limits | Resource/ Asset Limit | Can Apply 1902(r)(2) | Disability Definition |
| State Supplement Group (SSP) | 35 | No Federal limits; state can set | None | State can set | Yes | SSI |
| 100% of Poverty | 19 | State defines, no more than 100% FPL | None | At least as much as SSI | Yes | SSI |
| Medically Needy | 31 | Less than 133.33% of pre-TANF AFDC level | None | SSI | Yes | SSI |
| BBA 97 | 12 | 250% FPL net income | None | SSI | Yes | SSI |
| TWWIIA Basic | 16 | No Federal limits; state can set | 16 - 64 | No Federal limits; state can set | Yes | SSI |
| TWWIIA Medical Improvement | 7 | No Federal limits; state can set | 16 - 64 | No Federal limits; state can set | Yes | Previously eligible for SSI |
| §1902(r)(2): Medicaid Exceptions to SSI Rules on Counting Income and Resources27 | |
| §1902(r)(2) of the Social Security Act
permits a state to adopt more liberal rules than SSI concerning countable
income and resources for optional eligibility groups. Federal rules
concerning this provision were extensively revised in January 2001 and
CMS has issued technical assistance to guide states in
using the latitude under §1902(r)(2), especially with respect to people
with disabilities. This provision cannot be invoked for most mandatory
categorical eligibility groups (e.g., SSI beneficiaries).28 These rules allow states to redefine countable income or assets so that statutory eligibility limits, while still theoretically applicable, can be greatly exceeded. This flexibility comes with certain restrictions. First, the different counting methods must not disadvantage anyone, even if relatively more people would benefit than would be disadvantaged. Second, although a state may restrict its more liberal methods to eligibility groups it selects, the eligibility group(s) must be specifically defined in Medicaid law. A state cannot carve out a subgroup of its own definition (e.g., one based on medical diagnosis or place of residence). While the federal rules give states broad flexibility to expand eligibility, the adoption of more generous methods must, of course, conform to a state's budget considerations and political decisions. The rules allow establishing higher resource limits for optional groups above the $2,000 SSI resource standard. The rules also may be used to completely exempt certain resources (e.g., retirement accounts). A state may also disregard specified sources of income. For example, a work incentive can be provided by disregarding some or all of the earned income of working-age adults with disabilities. The net effect of a state's invoking this flexibility is to broaden who may qualify for Medicaid in the categories where more liberal rules are applied. For example, in a state with the 100 percent of poverty option, more liberal disregards widen the number of individuals who meet the income standard for this option. More liberal disregards can assist more people to qualify as medically needy (especially more liberal resource standards) or reduce the amount that medically needy individuals must "spend down" in order to qualify. |
| Medicare-Medicaid Dual Eligibles | |
| Working-age adults with disabilities qualify for the Medicare program
if they have received SSDI benefits for a period of two
years. People who receive both SSI and SSDI benefits, and individuals who
receive only SSDI benefits but also qualify for Medicaid in an optional
eligibility category, are called "dual eligibles" because they are eligible for
both Medicare and Medicaid benefits. States pay the premiums, co-insurance and
deductibles for services that dual eligibles receive through Medicare (e.g.,
physician services). Federal law also requires states to pay Medicare premiums,
co-insurance and/or deductibles for certain low-income individuals, including
SSDI beneficiaries, who do not qualify for Medicaid. Low-income people with serious mental illnesses benefit from Medicare coverage, but Medicare covers only a limited package of mental health services (described in Chapter 4). Medicaid's benefit package is broader than Medicare's, especially with respect to long-term care services. With respect to dual eligibles, Medicaid is often said to "wrap around" Medicare benefits. Consequently, those who require a wider-range of mental health services benefit much more when they also qualify for Medicaid. In states where there is limited use of Medicaid eligibility options, low-income working-age adults with serious mental illnesses are more likely to have only the more limited Medicare benefit package to fall back on, and the availability of critical community mental health services will hinge on the availability of state funding. |
In 2004, the federal SSI FBR was approximately 73 percent of the Federal Poverty Level (FPL) for one person. States have the option to raise the income level at which any person who meets SSI disability criteria can qualify for Medicaid to as high as 100 percent of FPL ($9,310 for one person in calendar year 2004, increasing incrementally for additional family members).29 In states that employ this option, SSDI-only beneficiaries are more likely to qualify for Medicaid because many of them receive SSDI payments that are too high for SSI cash assistance but less than 100 percent of FPL. States using this option may not set limits on countable resources lower than SSI levels ($2000 for one, $3000 for a couple) but may disregard additional resources under §1902(r)(2) of the Act.
It bears repeating here that what is compared to these eligibility levels is countable (not total) income and resources. Under the 100 percent of poverty option, at the very least, states must disregard the same kinds and amounts of income and resources that SSI disregards, but they may also use more liberal income disregards than SSI. Because there is no spend down requirement associated with this option, beneficiaries do not have to spend their own funds on medical services in order to qualify (unlike the medically needy option described below). Nineteen states have selected this option.30 Most have tied their income standard to 100 percent of FPL, although some have pegged that standard to a lower amount (between 80 to 95 percent of FPL.)
States can cover people who have too much income to qualify in any other eligibility group under the “medically needy option.” Under this option, a person must still fit into one of the Medicaid-coverable categories -- for example, meet SSI/SSDI disability criteria. If not, they cannot qualify as medically needy no matter how low their income or how extensive their medical need. There is no specified ceiling on how much income a person can have and still potentially qualify as medically needy if their medical bills are high enough. Under the medically needy option, a state establishes income standards (also called the “medically needy income limit”) and resource standards that apply to individuals who cannot otherwise qualify for Medicaid. Once individuals incur sufficient medical expenses to reduce their income to the state’s standard (that is, they “spend down” to the medically needy income limit), they become eligible for Medicaid payment of covered services.
| A Hypothetical Spend-Down Situation | |
| If a state's medically needy income standard for an individual is $450 per month and the person has countable income of $800 per month, then the person becomes eligible for Medicaid after incurring $350 in medical expenses. |
With respect to working-age adults with disabilities, the medically needy option can be beneficial for persons who have high prescribed drug or other medical expenses. It also is a Medicaid eligibility “pathway” for persons who require Medicaid-reimbursable institutional care (e.g., nursing facility services) in states that cover nursing facility care in their medically needy program. In 2000, about 3.6 million Medicaid beneficiaries were in the medically needy category, including approximately 1.3 million older persons and persons with disabilities. Medically needy is also a pathway to Medicaid eligibility for SSDI beneficiaries (including those with mental disorders) who cannot otherwise qualify for Medicaid.
Thirty-two states and the District of Columbia have medically needy programs that include individuals with disabilities. The income and resource standards that apply to these programs vary considerably among states. Some income standards are less than $200 per month while others are over $500.
However, it is important to keep in mind that states may disregard income and resources when they employ the medically needy option (as they can with other optional eligibility categories). When income is disregarded, the effect is that individuals can qualify for Medicaid as medically needy at lower levels of incurred medical expenses.
The role that the medically needy option plays in enabling working-age adults with disabilities to qualify for Medicaid hinges on the other optional coverages that a state has in place. For example, in states that have adopted the 100 percent of poverty option, medically needy eligibility comes into play only for higher income individuals who do not qualify under that option. Where a state has not adopted the 100 percent of poverty option, medically needy may be the only pathway to Medicaid eligibility for non-SSI beneficiaries.
It is important to note that under the medically needy option, a state is not required to offer its full package of Medicaid benefits. A state may limit its coverage for the medically needy to certain “mandatory” Medicaid benefits (e.g., physician services). In general, most states that operate medically needy programs offer their full Medicaid package. However, some exclude significant benefits.32
There are additional features of the medically needy option that warrant mention:
The medically needy option permits a state to extend Medicaid eligibility to individuals whose income is higher than the amount that would permit them to qualify for other optional eligibility categories that a state may have in effect. With respect to individuals with serious mental illnesses, when this option is available, it will principally enable SSDI-only beneficiaries to qualify for Medicaid if their SSDI benefit and other income otherwise disqualifies them from Medicaid.
This option -- also called the special income standard -- is available for persons who meet a state’s criteria for Medicaid institutional services (nursing facilities and ICFs/MR) and HCBS waiver programs. Under this option, a state can establish a special income threshold up to 300 percent of the maximum SSI benefit ($1,737 in 2005). This income standard is tied to a person’s gross income rather than countable income. Individuals with income up to the threshold qualify for Medicaid without spending down, but, when institutionalized, such individuals may have a “share of cost” obligation that requires them to turn over some or all their income except for a personal needs allowance to offset the cost of institutional services.35
This option was originally created so that states that did not wish to cover the entire category of medically needy could at least cover higher income persons residing in a medical institution. Some states employ this option in tandem with the medically needy option for persons served in institutional settings. States may employ this financial eligibility option for individuals in 1915(c) HCBS waiver programs in order to “level the playing field” between institutional and non-institutional services. Persons receiving waiver services may also have a “share of cost” obligation that requires them to contribute to the cost of waiver services.36
Any benefit program that uses an income cutoff to determine eligibility may pose a powerful disincentive for beneficiaries to return to work, if the earnings from work put them above the financial eligibility threshold level for benefits. To the extent that Medicaid coverage is needed in order to live, the problem becomes an absolute barrier to employment rather than simply a “disincentive.”
As discussed above, SSI rules contain a work incentive by disregarding a significant portion of earned income, and the SSI §1619(a) and §1619(b) provisions enable SSI beneficiaries who work and earn more than the SGA standard to retain Medicaid. In addition, states may employ §1902(r)(2) to create additional work incentives by disregarding earned income in the case of people with disabilities who work but are not SSI beneficiaries.
In 1997 and 1999, Congress enacted two options for states to extend Medicaid eligibility to workers with disabilities who have significant earnings but may not qualify for Medicaid for various reasons; (including some of the limitations inherent in SSI work incentives, e.g., the low SSI limits on resources, or the contingency that a person must have previously received an SSI cash assistance payment). As shown in Table 3-2, the majority of states have elected to employ at least one of these options. Indications are that working-age adults with mental illnesses have significantly benefited when these options are made available.
In addition to employing these options (which are described in detail below) to secure Medicaid eligibility for people with disabilities who work, states have taken additional steps to address employment barriers. Some of these steps are described in “Supporting Workers with Disabilities” on the following page.
BBA of 1997 Eligibility Group
Section 4733 of the Balanced Budget Act of 1997 (BBA-97) permits states to extend Medicaid eligibility to working individuals with disabilities who, because of their earnings, cannot qualify for Medicaid under other statutory provisions. States that have employed these provisions have implemented more liberal income and resource methodologies than used in SSI. Under this option:
| TABLE 3-2: State Coverage of BBA and TWWIIA Eligibility Groups | |||
|---|---|---|---|
| BBA Eligibility Group | |||
| Alaska | Maine | New Mexico | Utah |
| California | Mississippi | Oregon | Vermont |
| Iowa | Nebraska | South Carolina | Wisconsin |
| TWWIIA Eligibility Groups | |||
| State | Basic Group | Medically Improved | Income Limit |
| Arkansas | X | 250% FPL | |
| Arizona | X | X | 250% FPL |
| Connecticut | X | X | Up to $36,990 |
| Illinois | X | 20% FPL | |
| Indiana | X | X | 350% FPL |
| Kansas | X | X | 300% |
| Louisiana | X | 250% FPL | |
| Michigan | X | No limit | |
| Minnesota | X | No limit | |
| Missouri | X | X | 250% FPL |
| New Hampshire | X | 450% FPL | |
| New Jersey | S | 250% FPL | |
| New York | X | 250% FPL | |
| North Dakota | X | 225% FPL | |
| Pennsylvania | X | X | 250% FPL |
| Washington | X | X | 220% FPL |
| Wyoming | S | 100% FPL | |
In addition, under this option, a state may charge a premium and require beneficiary cost-sharing.
| Supporting Workers with Disabilities38 | |
| Fear of
losing Medicaid benefits is a major employment disincentive to individuals with
disabilities. Federal policy now offers states several options that permit
people with disabilities who work to retain their Medicaid benefits.
Several states have accompanied the "roll out" of new work-related Medicaid eligibility options with additional steps to address employment barriers. For example, features of Kansas' "Working Healthy" initiative include: (a) a TWWIIA Medicaid buy-in eligibility option so that people with disabilities who work can keep their earnings and have assets well-above standard Medicaid resource standards; (b) "benefit specialists" out-stationed around the state to help individuals understand how work affects their benefits and navigate the eligibility process; and, (c) outreach to people with disabilities and employers to increase awareness of new employment opportunities. In order to pursue these strategies, Kansas applied for and received a Medicaid Infrastructure Grant through CMS.39 Individuals with mental illnesses comprised about one-half of the first group of Working Healthy participants.40 Follow-up consumer surveys found that Working Healthy participants with mental illnesses have experienced significant improvements in their quality of life and health status as a result of their participation.41 Elsewhere, states that have adopted a Medicaid "buy-in" option have also pursued comprehensive strategies to address employment barriers. For example, some states employ benefit specialists to work with individuals. Some states (e.g., Utah and California) have modified their coverage of Medicaid personal assistance services in order to support individuals with disabilities at locations outside their homes, including the workplace; (the use of personal assistance to support employment is described in Chapter 4). In states that offer peer support, peer support specialists can also play an important role in supporting individuals with serious mental illnesses to return to work. The adoption of Medicaid buy-in options has also been linked to cross-agency employment initiatives to promote employment for people with disabilities. These initiatives frequently include vocational rehabilitation, program agencies (e.g., state mental health authorities), and state employment agencies. |
TWWIIA Options
The Ticket to Work and Work Incentives Improvement Act of 199942 created two new optional eligibility groups: (a) the Basic Coverage Group and (b) the Medical Improvement Group. The key differences between the TWWIIA eligibility groups and the BBA-97 eligibility group are as follows43:
Like the BBA-97 group, states may require beneficiaries to pay premiums and share the cost of services. In addition, with respect to the TWWIIA groups, states also may employ §1902(r)(2) in order to use more liberal income and resource methodologies for these groups.
In many respects, the TWWIIA option provides states more flexibility in crafting work incentives than the predecessor BBA-97 option. While there are differences between the BBA-97 and TWWIIA eligibility options, both give states the latitude to extend Medicaid eligibility to people with disabilities who are successfully employed. These expansions potentially can benefit both SSI and SSDI beneficiaries who return to work. It is important to point out that the SSDI program has weaker basic work incentive provisions than the SSI Program.45 These options (or the use of income disregards in other optional coverage groups) can provide important assistance to SSDI beneficiaries who work but also need access to Medicaid benefits. One important result of the BBA-97 and TWIAA work provisions is that individuals who formerly could only qualify for Medicaid via the medically needy option can now receive benefits under these options. By avoiding the spend down requirements associated with the medically needy option, these individuals can retain more of their work income and, thus, be more independent.
For SSI recipients who work, eligibility for Medicaid benefits hinges on the extent to which a state has selected other Medicaid options and how those options have been structured.
As noted previously, the 1996 “welfare reform” legislation severed the direct and long-standing tie between the receipt of cash assistance and Medicaid eligibility for low-income dependent children and their parent(s) or caretaker relatives. The Aid to Families with Dependent Children (AFDC) program was replaced by the Temporary Aid to Needy Families (TANF) program. However, states were required to continue their AFDC-based Medicaid eligibility criteria for this group.
States must also extend Medicaid eligibility to low-income pregnant women in households with incomes up to 133 percent of poverty, and include pregnant women if they operate a medically needy program. Under current Medicaid eligibility provisions for parent(s) and caretaker relatives with children, approximately nine million adults are Medicaid beneficiaries for reasons not directly linked to disability.46
While these eligibility categories are not tied to disability, studies have revealed that a significant number of parents in very low income families and pregnant women (who are or would likely be eligible for Medicaid under non-disability related eligibility groups) have serious mental illnesses. Indeed, especially with respect to parents in very low income families, significant numbers of individuals have been found to qualify for SSI because they have disabilities, including those caused by mental impairments.47 There are other adult members in such families whose mental impairments are significant, but these individuals do not qualify for SSI. In addition, it is estimated that between three and four percent of pregnant women have serious mental illnesses.
Medicaid mental health services are often provided to SSI beneficiaries or persons who qualify for Medicaid through other options but still meet SSI disability criteria. However, adults in Medicaid-eligible low-income families can also make up a significant portion of the pool of individuals who may benefit from Medicaid mental health services.
There often are added challenges in securing and maintaining Medicaid eligibility for working-age adults with serious mental illnesses. Some of these challenges are shared by people with other disabilities but many are experienced more frequently by individuals with serious mental illnesses.
The processes and steps involved in securing and maintaining SSI/SSDI eligibility are by no means simple and frequently are time-consuming. They can be especially challenging for individuals with mental impairments, regardless of type. For persons with serious mental illnesses, it is often important that they have assistance in navigating the application and eligibility determination process. When such assistance is not available from involved family members or other allies, it may be provided by the public mental health system or local advocacy organizations and peer support networks. For example, many mental health agencies employ benefit specialists to assist individuals in the application process. Such assistance is a critical capability in programs that serve homeless individuals. Connecting individuals with serious mental illnesses to public benefits is also a central function of service coordinators (case managers). Especially in states that do not automatically link Medicaid and SSI eligibility, assistance may be necessary to help individuals to secure Medicaid eligibility once SSI eligibility has been obtained.
Equally important is a person’s maintaining eligibility once it has been secured. There are reporting requirements that both SSI and SSDI beneficiaries must meet in order to continue their benefits. Again, especially in states that do not interlock Medicaid and SSI eligibility, there also are periodic reporting requirements that individuals must fulfill in order to maintain their Medicaid eligibility. In the case of individuals who are eligible for Medicaid, Medicaid-funded case management services (discussed in Chapter 4) can be employed to assist individuals in maintaining their eligibility (as well as access to other benefit programs).
Individuals who receive SSI or SSDI benefits are subject to periodic continuing disability review. Neither SSI nor SSDI eligibility is granted on a permanent basis. Continuing disability reviews assess whether individuals continue to meet eligibility criteria. The frequency of such reviews varies, but they usually take place every three to five years, depending on the nature of the person’s disability. A review may result in a determination that a person is “medically improved.” Such a determination results in a termination of SSI/SSDI benefits, which in turn leads to a loss of Medicaid benefits unless the individual is covered under the TWWIIA medically improved group. This occurs because, in the disability eligibility group, Medicaid eligibility is interlocked with SSI/SSDI disability criteria. Some individuals with serious mental illnesses experience improvements but episodically encounter problems. Individuals who have been determined by the Social Security Administration to be medically improved can apply for reinstatement in the event that their situation worsens. However, after the reinstatement period runs out, they must re-apply for benefits.
As previously noted, individuals whose impairment is assessed as stemming from alcohol or drug abuse cannot qualify for SSI/SSDI. A high percentage of individuals with serious mental illnesses have dual disorders (i.e., they both have a serious mental illness and experience substance abuse). In the case of these individuals, there are special challenges in securing eligibility for SSI/SSDI. Substance abuse that accompanies a serious mental illness does not necessarily disqualify an individual from SSI/SSDI. In order to secure or maintain SSI/SSDI eligibility for these individuals, it is necessary that the person’s physician or psychiatrist indicate that mental illness is the contributing factor to the person’s impairment.48
Numerous individuals with serious mental illnesses experience incarceration. In general, incarceration causes benefits like SSI or Medicaid to be terminated or suspended. When a person is released (whether on parole or probation), reconnecting to benefits can be very important so that the individual can obtain supports in order to resume life in the community.50
When an SSI beneficiary is incarcerated, his/her benefits generally cease immediately. When incarceration is for fewer than twelve consecutive months, the person is placed in suspended status. Individuals in this status may have their benefits reinstated upon release. If the Social Security Administration is notified in advance of release, the person’s SSI benefit can be reinstated quickly. However, people incarcerated for more than twelve months must re-apply for SSI. In the case of SSDI, benefits are suspended following conviction and confinement in jail for 30 or more days. SSDI benefits are immediately reinstated once release has been verified. In the case of persons who were not receiving SSI/SSDI before they were incarcerated, they may apply for benefits prior to release. In some states and localities, offender programs work with these individuals prior to release to assist their obtaining benefits.
Because of the linkage between Medicaid eligibility and receipt of SSI assistance, incarceration also poses challenges with respect to securing Medicaid for individuals who have been incarcerated. Federal law prohibits states from making Medicaid payments for services furnished to incarcerated individuals. There also are issues concerning Medicaid eligibility when a person is released. If a person was eligible for Medicaid before being incarcerated, a state may suspend the person’s eligibility during the period of incarceration and reinstate it once the person is released (provided, of course, that the person meets applicable eligibility criteria). However, the practice in many states is to terminate eligibility outright when a person is incarcerated. In the case of individuals who receive SSI after release, Medicaid eligibility will be reinstated automatically once SSI benefits are authorized, but only in states where Medicaid eligibility is automatic for SSI beneficiaries. Elsewhere, and in the case of individuals who obtain Medicaid eligibility via other optional groups, securing Medicaid eligibility requires the person to reapply.
There are a variety of steps that states take to reconnect incarcerated persons to benefits as soon after release as possible. Some of these steps include jails and prisons entering into pre-release agreements with the Social Security Administration, continuing involvement with incarcerated individuals by community agencies and offender programs, and simplifying Medicaid eligibility determination processes.51
When a person with a serious mental illness is institutionalized, additional challenges can arise. Federal law governing the SSI program prohibits the payment of SSI benefits to “inmates of public institutions.” Under this policy, individuals between the ages of 22-64 in long-term stay status at state mental health facilities may not receive SSI benefits (however, SSDI beneficiaries continue to receive benefits in these facilities).52 SSI eligibility is unaffected in the case of persons who are served in other Medicaid-funded settings (e.g., nursing facilities), in some other types of residential settings, or when persons are institutionalized for short periods (up to three months). Once SSI benefits stop, the connection between receipt of SSI benefits and Medicaid can be disrupted. When a person is discharged from a facility, the steps necessary to reinstate both SSI payments and Medicaid eligibility are similar to those involved in securing benefits for incarcerated persons.
In the case of working-age adults with serious mental illnesses, the main pathway to Medicaid eligibility is via the SSI program, either by being a SSI cash assistance beneficiary or by meeting SSI-disability criteria and securing eligibility through another optional eligibility group (e.g., medically needy). Meeting SSI disability criteria is decisive (except for individuals who are medically improved in TWWIIA states that include such individuals). Because of the stringency of SSI/SSDI disability criteria, low-income individuals with serious mental illnesses who qualify for Medicaid through the “SSI pathway” have especially challenging impairments and, therefore, would benefit from the provision of rehabilitative and other services. The same is true of adults in TANF households who have serious mental illnesses, even though they might not meet SSI disability criteria.
Federal Medicaid law and policy give states important latitude in extending Medicaid eligibility beyond SSI cash assistance beneficiaries. In particular, individuals who are SSDI beneficiaries but do not receive SSI can be included in a state’s Medicaid program in various ways, including the 100 percent of poverty option or the medically needy option. These SSDI beneficiaries must meet the same disability tests as SSI beneficiaries. A large proportion of SSDI beneficiaries have mental disorders, including serious mental illnesses.
Medicaid’s overall role in meeting the needs of working-age adults with serious mental illnesses in any particular state hinges to a significant degree on a state’s policies concerning the coverage of people with disabilities. In states that have broadened Medicaid eligibility for people with disabilities, a greater proportion of individuals with serious mental illnesses are able to receive Medicaid-funded services. As a result, other resources can be used to meet the needs of a greater number of persons who do not qualify for Medicaid, and other investments can be made in community mental health services. To the extent that a state’s Medicaid eligibility policies also help overcome disincentives to work (either by invoking the options for workers with disabilities or the flexibility available under §1902(r)(2)), individuals can be encouraged to enter the workplace because they can maintain Medicaid coverage and thereby have ongoing access to Medicaid community mental health services.
For people who obtain Medicaid eligibility, a state may offer vital benefits that will assist their recovery and address other important needs. Chapter 4 describes the types of benefits that states may offer to individuals with serious mental illnesses.
Cinsavich, S. & Rado, G. (2002). Medicaid Buy-In: Concept and Implementation. Institute for Community Inclusion Policy Brief, 4(2).
This policy paper sheds light on the history leading up to the passage of TWWIIA in 1999 and describes the most important provisions of Medicaid buy-in policy. Current state policies and potential policy actions are also described. Available at communityinclusion.org/publications/text/pb9text.html
Hanes, P. & Folkman, J. (2003). State Medicaid Options that Support the Employment of Workers with Disabilities. Center for Health Care Strategies, Inc. (24 pages).
This paper describes the experiences of seven states in implementing Medicaid Buy-In for people with disabilities. The authors present a summary and history of the Medicaid Buy-In and then address several policy questions related to its implementation such as the intended scope of the Buy-In, its early signs of success/failure, and the role of both employers and employees in facilitating its implementation. Available at chcs.org/usr_doc/BuyIn.pdf
Jensen, A., Silverstein, R., Folkemer, D., & Straw, T. (2002). Policy Frameworks for Designing Medicaid Buy-In Programs and Related State Work Incentive Initiatives. U.S. Department of Health and Human Services. (45 pages).
This publication provides information for state policymakers and administrators in the design and implementation of Medicaid Buy-In and other work incentive programs for individuals with disabilities. It focuses on the issues of cost, enrollment, and the relationship between cash assistance programs (SSI, SSDI, and state supplements) and health care entitlement programs (Medicaid and Medicare). The report details experiences in nine states that were among the first to implement Medicaid Buy-In programs and outlines decision pathways that states can use to guide them through the buy-in design process. Available at aspe.hhs.gov/daltcp/reports/polframe.htm
Wiener, J. (2003). Medicaid and Work Incentives for People with Disabilities: Background and Issues. Washington, DC: The Urban Institute. (76 pages).
This paper explains in detail the relationship between SSI and Medicaid, as well as employment incentive programs, including the Balanced Budget Act of 1997, the Ticket to Work Act, and the 1619(b) provision of the Social Security Act. It offers examples of how states have implemented various employment incentives, and issues they have or may face, including horizontal equity, fiscal pressures and shortfalls, sufficient breadth and depth of coverages, and developing a reasonable and fair definition of disability. The paper includes several state-by-state charts with information about eligibility criteria, 1619(b) thresholds, and buy-in policies. Available at urban.org/UploadedPDF/410814_Medicaid_Incentives.pdf
This chapter is based in large part on the especially clear description of Medicaid eligibility authored by Letty Carpenter in Chapter 2 (“Financial Eligibility Rules and Options”) in Gary Smith, Janet O’Keeffe, Letty Carpenter, Pamela Doty, Gavin Kennedy, Brian Burwell, Roberta Mollica, and Loretta Williams (2000). Understanding Medicaid Home and Community Services: A Primer. George Washington University, Center for Healthy Policy Research. Available at http://aspe.hhs.gov/daltcp/reports/primer.htm (accessed February 22, 2005).
Based on: Andy Schneider, Risa Elias, and Rachel Garfield (2002). "Chapter 1: Medicaid Eligibility" in: Schneider, A., Elisa, R., Garfield, R., et al. (2002). The Medicaid Resource Book. Menlo Park CA: The Kaiser Commission on Medicaid and the Uninsured.
Legal immigrants who entered the U.S. before August 22, 1996 must also meet the definition of a "qualified immigrant" in order t be eligible for Medicaid. A qualified immigrant is one whose category of immigration status is (a) Legal Permanent Resident (LPR), (b) Refugee, (c) Asylee, or one of several other categories. Immigrants deemed "nonqualified" are not eligible for basic Medicaid services regardless of legal status. Non-qualified immigrants are either (a) a Person Residing Under Color of Law (PRUCOL), (b) undocumented or (c) a non-immigrant such as a student or foreign visitor. For more detailed information, please see the National Health Law Program paper Immigrant Access to Health Benefits: A Resource Manual, available at www.accessproject.org/downloads/Immigrant_Access.pdf
In particular, please see the following: (a) United States Government Accounting Office (2002). Welfare Reform: Outcomes for TANF Recipients with Impairments. (GAO-02-884); (b) National Council on Disability (2003). TANF and Disability -- Importance of Supports for Families with Disabilities in Welfare Reform; (c) Office of Inspector General, U.S. Department of Health and Human Services (2002). State Strategies for Working with Hard-to-Employ TANF Recipients. (OEII-02-00-00630); and, (d) Eileen P. Sweeney (2000). Recent Studies Indicate that Many Parents Who are Current or Former Welfare Recipients have Disabilities or Other Medical Conditions. Washington DC: Center on Budget and Policy Priorities. Some studies have found that the incidence of mental impairments among adults in TANF households ranges from 30 to 40 percent.
Federal law concerning the Supplemental Security Income program is in Title XVI of the Social Security Act.
The “Adult Listings” are contained in the Social Security Administration’s publication Disability Evaluation Under Social Security (also known as the Blue Book). The publication is available at ssa.gov/disability/professionals/bluebook. Mental disorders include mental retardation, organic brain disorders and mental illnesses, among others.
The Diagnostic and Statistical Manual (DSM) is updated periodically. The Listings of Mental Impairments parallels the DSM-III, which was used in the mid-1980’s. The current version used by mental health professionals is the DSM-IV.
Children (individuals under age 18) are not subject to the substantial gainful activity test. Instead, they are evaluated on the basis of whether their impairment(s) result in “marked and severe functional limitations.”
From 1982 through June 1999, the SGA standard remained unchanged at $500 per month. In July 1999, the standard was increased to $700 per month and indexed to the year-over-year change in the national average worker wage index. The SGA standard also applies to SSDI beneficiaries.
Federal law concerning the Social Security Disability Insurance program is in Title II of the Social Security Act.
Social Security Administration (2002). Annual Statistical Supplement. Table 7.F2.
Social Security Administration (2002). Annual Statistical Supplement. Table 3.C61.
Information here and elsewhere in this chapter about state policies concerning Medicaid eligibility for adults with disabilities, is generally based on information compiled by the National Association of State Medicaid Directors (NASMD) and available at nasmd.org/eligibility/. The NASMD information was compiled in 2001 but is updated periodically.
§1634 of the Social Security Act permits the Social Security Administration to enter into an agreement with a state for this purpose.
Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, and Virginia.
SSI payment amounts are adjusted annually in January based on changes in the consumer price index.
Unlike the FBR and SGA limits, the SSI resource limit is not indexed and has remained unchanged for many years.
Section 209(b) refers to the section of the Social Security Act Amendments of 1972 that gave states this option. This provision is contained in §1902(f) of the Social Security Act.
For example, SSI is based on whether a person’s disability will cause substantial impairment for at least 12 months. In Indiana and New Hampshire, the expected duration of the impairment must be at least 48 months.
See also: CMS/CMSO/Disabled and Elderly Health Programs Group (June 2002). “Groups Deemed to be Receiving SSI for Medicaid Purposes.” See also: Robert Bohlman, National Alliance for the Mentally Ill -- “Switch from SSI to SSDI Does Not Mean Loss of Medicaid” at nami.org/Content/ContentGroups/Enews/1996/December_1996/Switch_From_SSI_To_SSDI_Does_Not_Mean_Loss_Of_Medicaid.htm
There are three eligibility groups for whom Medicaid must continue after SSI is lost: (a) People who lost SSI when they received automatic cost-of-living adjustments (COLAs) in Social Security (sometimes nicknamed “Pickle people” after Congressman Pickle, one of the sponsors of the original COLA legislation); (b) “Adult children with disabilities” who lose SSI when they become entitled to Social Security benefits based on a parent’s Social Security entitlement. “Adult children with disabilities” are individuals who have a disability before age 22.
When such a person’s parent becomes disabled, retires or dies, the individual becomes eligible for SSDI. If an individual had an SSI benefit, then the SSDI benefit -- if sufficiently large -- completely replaces SSI. Federal law requires that these individuals continue to be considered SSI beneficiaries and receive Medicaid coverage; and, (c) Individuals ages 60-64 who lose SSI due to receipt of Social Security benefits for widows and widowers with disabilities.
The Employment Opportunities for Disabled Americans Act of 1986 (P.L. 99-643).
In January 2004, the Social Security Administration published proposed rules concerning the treatment of assets in determining SSI eligibility. These proposed rules would (a) exclude household goods and personal effects from countable resources and (b) remove the dollar value limit on a person’s personal vehicle. Federal Register, Vol. 69, No. 3, pp. 554-558 (January 6, 2004).
Also in the Employment Opportunities for Disabled Americans Act of 1986. The enactment of these provisions followed demonstrations that began in 1980. In 1982, these options moved to full implementation nationwide. However, it was not until 1986 that these provisions were made permanent.
Center for Workers with Disabilities (2002). Work Incentives Development Report Series: Section 1619(b) Operational Challenges and Selected State Remedies. Washington DC: National Association of State Medicaid Directors. This series of reports contains extensive information concerning Section 1619(b) eligibility and some of the problems encountered in its implementation. The series is available at nasmd.org/disabilities/pubs/special.asp
Social Security Administration. 2002 SSI Annual Report.
More detailed information concerning the latitude afforded states under §1902(r)(2) may be found in the following publications: (a) Center for Workers with Disabilities (2002). Building Work Incentives Using Section 1902(r)(2) of the Medicaid Statute. Washington, DC: National Association of State Medicaid Directors, available at nasmd.org/disabilities/pubs/special2.pdf; and, (b) CMS (2001) Medicaid Eligibility Groups and Less Restrictive Methods of Determining Countable Income and Resources: Questions and Answers. Available at cms.hhs.gov/medicaid/eligibility/elig0501.pdf
Federal Register, January 11, 2001, pps. 216-2322. These rules are located at 42 CFR Part 435.
The Federal Poverty Level is higher in Alaska and Hawaii. ($11,210 and $10,330, respectively, in 2004 for one person).
California, District of Columbia, Florida, Hawaii, Illinois, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, New Jersey, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Utah and Virginia.
For more information on the medically needy option, including the states that offer this option and the characteristics of their programs, please see: Jeff Crowley (2003). Medically Needy Programs: An Important Source of Medicaid Coverage. Washington DC: Kaiser Commission on Medicaid and the Uninsured, available at kff.org/medicaid/4096-index.cfm
For example, Louisiana has excluded mental health services as well as others; some states do not include prescribed drugs.
A 209(b) state may elect to use a different income or resource standard for the aged, blind and disabled than the standard that is used for AFDC-related individuals.
Typically this is every month. In some states, it is every six months. But in the latter case, the person must be able to spend-down an amount that equals six times their monthly “excess” income before becoming eligible.
A person’s share of cost obligation is reduced when the person has a spouse or other dependents.
States at their option may disregard a certain amount of income for waiver beneficiaries to support themselves and any dependents in the community. This amount is typically called a personal maintenance allowance. The amount of income remaining after subtracting the personal maintenance allowance and the allowance for dependents is the cost-sharing obligation. States vary in the amount of the maintenance allowance they allow, from $800 to $1,737 (the full 300 percent of SSI standard).
There is extensive information concerning these options at the CMS web site cms.hhs.gov/twwiia/default.asp. There also are considerable resources available on the Center for Workers with Disabilities web site: nasmd.org/disabilities/about/altdefault.asp
More information concerning state initiatives to promote employment for people with disabilities through Medicaid buy-in options and other strategies is available from the National Association of State Medicaid Directors Center for Workers with Disabilities at nasmd.org/disabilities/taskforces/altdefault.asp
More information concerning these grants is located at cms.hhs.gov/twwiia/infrastra.asp
Jean P. Hall and Michael H. Fox (2002). Working Healthy -- A Medicaid Buy-In for Kansas. Univesrity of Kansas Department of Health Policy and Management.
Jean P. Hall and Michael H. Fox (2003). Early Enrollment in Working Healthy: Program Features Make A Difference. Univesrity of Kansas Department of Health Policy and Management.
P.L. 106-170.
For a table comparing the features of BBA and TWWIIA (Basic and Medical Improvement), please see: cms.hhs.gov/twwiia/comchart.asp
Periodic continuing disability reviews assess whether individuals still meet SSI/SSDI eligibility criteria.
SSDI beneficiaries whose earnings exceed the SGA standard enter what is termed a Trial Work Period. Once that Trial Work Period is completed and the person’s earnings continue to exceed the SGA standard, the person faces the potential termination of SSDI. SSDI does not have a provision similar to 1619(a) that benefits SSI beneficiaries.
Contained in §1931 of the Social Security Act.
In particular, please see the following: (a) United States Government Accounting Office (2002). Welfare Reform: Outcomes for TANF Recipients with Impairments. (GAO-02-884); (b) National Council on Disability (2003). TANF and Disability -- Importance of Supports for Families with Disabilities in Welfare Reform; (c) Office of Inspector General, U.S. Department of Health and Human Services (2002). State Strategies for Working with Hard-to-Employ TANF Recipients. (OEII-02-00-00630); and, (d) Eileen P. Sweeney (2000). Recent Studies Indicate that Many Parents Who are Current or Former Welfare Recipients have Disabilities or Other Medical Conditions. Washington DC: Center on Budget and Policy Priorities. Some studies have found that the incidence of mental impairments among adults in TANF households ranges from 30 to 40 percent.
Dee Mukherjee, National Association for the Mentally Ill. “New Law Denies SSI, SSDI to Those with Alcoholism and Drug Addictions.”
A complete discussion of the effects of incarceration on SSI, SSDI and Medicaid benefits is found in the following publication: Bazelon Center for Mental Health Law. Finding the Key to Successful Transition from Jail to the Community -- An Explanation of Federal Medicaid and Disability Program Rules. Washington, DC.
More information on the interplay between SSI, Medicaid, and incarceration can be found in the Bazelon Center for Mental Health Law publication, Arrested? What Happens to Your Benefits If You Go to Jail or Prison?, (2004). Washington, DC. Available at bazelon.org/issues/criminalization/publications/arrested/index.html
As an example, in November 2004 Utah allowed inmates to re-apply for Medicaid six weeks before their anticipated release date in order to facilitate a smooth transition into Medicaid services. In addition, Utah provides presumptive Medicaid eligibility to inmates who normally must wait until a 90-day disability evaluation is completed, if they were deemed disabled prior to being incarcerated. This covers a large number of individuals with serious mental illnesses.
Individuals in this age cohort are affected by the IMD exclusion, as discussed in Chapter 4.
| States may offer a wide range of services to Medicaid beneficiaries. Commonly, states employ certain Medicaid coverages to support working age adults with serious mental illnesses in the community. Other Medicaid coverages can also play a vital role in assisting individuals. This chapter provides basic information concerning Medicaid service coverages that are especially relevant for supporting persons with serious mental illnesses in the community. |
Medicaid’s role in supporting working age adults with serious mental illnesses hinges on the services that a state includes in its Medicaid program. Federal Medicaid law does not spell out a predefined set of distinct mental health services. Instead, mental health services may be furnished under several general coverage categories, some of which are mandatory and others optional. For example, psychiatrist services fall under the broad mandatory physician services category. Services such as Assertive Community Treatment may be furnished under the optional rehabilitative services coverage. Three optional Medicaid coverage categories -- clinic (outpatient) services, rehabilitative services, and targeted case management -- figure prominently in the provision of community mental health services. Other Medicaid coverages (e.g., prescribed drugs) also play vital roles in meeting the needs of individuals with serious mental illnesses.
This chapter begins with a brief discussion of Medicaid coverage policies. It then provides an overview of pertinent Medicaid coverages for supporting people with serious mental illnesses in the community. Next, it provides more detail concerning federal policies that apply to these coverages, including the types of services that may be furnished under them, as well as coverage requirements and limitations. Examples illustrate how individual states have employed these coverages. Chapter 5 further illustrates how states have fashioned their Medicaid coverages of community mental health services under the rehabilitative services and targeted case management options.
“Coverage” refers to the services that a state includes in its Medicaid state plan. The federal Medicaid statute (principally in §1905) lists the services for which federal financial participation is available. When a state covers a service in its Medicaid state plan, it commits to making that service available to all beneficiaries who require it.
The extent of federal policies concerning the coverage of specific services varies. In the case of certain coverages, Congress has enacted detailed requirements. For example, federal statutory and regulatory requirements regarding nursing facility services are quite detailed. In other cases, however, Medicaid law describes relatively broad coverage parameters and, thereby, states have considerable latitude in fashioning the services that they offer under these coverage categories. This is especially the case with respect to rehabilitative services where federal law and regulations spell out the essential features of the coverage but otherwise do not prescribe their exact scope.
As discussed in Chapter 2, there are certain fundamental federal statutory requirements (e.g., comparability and statewideness) that apply to Medicaid state plan services, regardless of type. Unless a state is operating services under a waiver authority (see Chapter 6), its Medicaid coverage must comply with these requirements in order for the state to obtain federal financial participation for the costs of services it furnishes to beneficiaries. These requirements are discussed here.
The federal Medicaid statute (along with federal regulations and, in some cases, additional CMS guidance) describes the intended purpose of each coverage. For example, in the case of targeted case management (TCM) services, the statute describes their purpose as “assist[ing] individuals eligible under the plan in gaining access to needed medical, social, educational, and other services.” In order for a state to gain CMS approval to offer TCM services, the specific services it intends to offer must comport with this expressed purpose. Because the TCM coverage is limited to assisting individuals to access various types of services, it may not be employed to furnish direct hands-on assistance to persons, conduct prior authorization activities, or determine eligibility. Such activities can be provided under other coverages or as a Medicaid administrative cost. Fundamentally, a state’s proposed coverage must align with the expressed statutory purpose. Sometimes, this causes a state to have to employ two or more coverages in order to furnish a desired array of services.
When a state proposes a coverage, CMS expects that a state will spell out the services it intends to offer in reasonable detail in its Medicaid plan or related policies and procedures. This detail includes the specific services that will be furnished under the coverage, provider qualifications, and the criteria that a state will use in determining the medical necessity of the service. For example, a state may not simply indicate that it will cover rehabilitative services. Instead, the state must spell out the specific components of rehabilitative services that it will offer. These services must be defined in sufficient detail to make it clear what will be furnished to individuals and under what conditions.
CMS review of a proposed coverage is based on whether the coverage comports with federal law and regulations rather than on judgments concerning the appropriateness of the coverage. For example, some observers question the value of “day treatment” services as a means of supporting working-age adults with serious mental illnesses. However, as long as a state’s coverage of such services meets the essential requirements, CMS is obliged to approve the coverage.
CMS review of proposed coverages considers each state’s proposal on its own merits. In this vein, the coverages approved by CMS in other states may provide useful information when fashioning a coverage. However, CMS officials caution that replicating an existing coverage from another state will not necessarily expedite CMS review and approval. Nonetheless, CMS has expressed a strong interest in working with and assisting states in fashioning coverages that embrace the principles of recovery and reflect “what works” in effectively meeting the needs of beneficiaries, including working-age adults with serious mental illnesses.
It is important to keep in mind that Medicaid functions as a source of funding for services that meet federal statutory requirements rather than as a defined “program.” It is up to each state to determine what it will include in its coverage and the practice standards it will adopt. For example, a state has the latitude to establish “clinical pathways” in order to ensure that the correct mix and sequence of services are furnished to individuals based on their assessed needs. It is up to each state to craft its coverage in the context of its own programmatic goals and objectives for mental health services.
As previously discussed, Medicaid operates within a “medical necessity” framework. That is, services must be necessary to address a beneficiary’s health condition or fulfill a rehabilitative purpose. With respect to many Medicaid services, states have latitude to establish medical necessity criteria and institute processes for determining when such criteria are met. One way that states define medical necessity is to establish what are sometimes termed “service eligibility” criteria. For example, in the case of ACT (Assertive Community Treatment) services, service criteria often include a history of frequent psychiatric emergencies. For other mental health services, service eligibility criteria may include particular diagnoses, treatment history (e.g., frequent hospitalization), whether an individual’s assessed needs and level of functioning meet a predefined threshold level, and others. Service eligibility criteria are a means for states to assure that individuals receive appropriate services and to manage utilization.
In a somewhat similar vein, medical necessity criteria also may include what are termed “step-downs.” That is, an individual might be approved to receive especially intensive services for a limited period of time and then shift to a lesser intensity service once his or her condition is stabilized and/or improved.
A state also can establish various processes to determine medical necessity. These processes may include prior authorization and utilization review by the state itself or a contracted third party entity. In some cases, states permit a service to be furnished for a limited period of time or a fixed number of units without prior authorization, but require review for service continuation once the initial period is up or the unit limitation has been reached. In other cases, the provision of intensive services (e.g., those that constitute ACT) may be subjected to periodic review and reauthorization. Again, the rationale for these processes is to assure that individuals are receiving appropriate and necessary services.
Medical necessity is also frequently assessed in the context of the review and approval of an overall treatment plan developed by mental health professionals. In other words, the services that are furnished to the individual must be shown to address assessed needs identified during the treatment planning process.
Related to but distinct from medical necessity criteria are limits that a state may impose on the benefits that it offers. Federal law requires that each service that a state covers in its Medicaid program must be “sufficient in amount, duration and scope to reasonably achieve its purpose.” However, there is no specific federal standard defining this requirement. Some states impose limitations on the amount, duration and scope of services, including the number of times that a beneficiary can be seen by a physician in a month or the number of drugs that may be prescribed and paid for a person each month.
For mental health services, states often impose limits on the number of outpatient visits or how many units of a service a person may receive each month or over a more extended period. However, states must provide a mechanism for individuals to seek additional care when needed over and above any limits. The imposition of such limits has been the subject of considerable litigation over the years and often is controversial. Such limits frequently are used as cost-containment devices. Some argue they can be counterproductive when they prevent an individual from obtaining vital services and contribute to preventable hospitalization or other negative outcomes. Effective utilization review techniques usually are more effective methods for ensuring that services are cost-effective.
Medicaid is a beneficiary-centered program and the services that a state offers must be furnished for the direct benefit of the beneficiary. For example, Medicaid state plan personal assistance services cannot be furnished for the sole purpose of providing respite to family caregivers. While family caregivers might benefit when personal assistance is furnished, the provision of this assistance must be based on the beneficiary’s needs rather than those of the family caregivers. In mental health services, this requirement must be taken into account when a state offers family psychosocial education, as discussed in Chapter 5.
Finally, in proposing a coverage, a state must specify the providers of the service and their required qualifications. Especially with respect to rehabilitative services, states have substantial latitude in establishing provider qualifications.1 A state may require that providers possess and demonstrate critical competencies and capabilities by establishing provider standards and certification processes. Such standards obviously must comport with state law, and at the same time, be reasonably related to the requirements of the service itself, and must not arbitrarily disqualify otherwise qualified providers and individuals. For example, in the case of rehabilitative services, it is not permissible for a state to limit the providers of these services to community mental health centers or organizations that also receive funding from the state mental health authority. Any entity or individual who meets a state’s criteria and is willing to furnish Medicaid services must be allowed to become a provider.
As previously noted, federal Medicaid law does not specifically spell out a predefined set of community mental health services that a state may offer. States cover community mental health services under broad Medicaid coverage categories, none of which are reserved exclusively for community mental health services. Many types of services fit under these broad coverage categories. Table 4-1 on the following page links mental health and related services that states furnish to adults with serious mental illnesses to their typical Medicaid coverage categories.
It is useful to keep in mind that, in the Medicaid program (as with most types of health insurance), general practice physicians and other health care professionals frequently address the mental health care needs of beneficiaries apart from the “mental health system.” This care is not insignificant and plays an important role in addressing mental illnesses; however, it is not the primary focus of this Handbook. Basic coverages, such as psychiatrist services under the mandatory “physician services” category and psychologist services under the “other practitioners” category, can play an important role in supporting individuals with serious mental illnesses (e.g., medication management that requires the services of a health care professional). In the following sections, attention focuses on coverages that are most relevant in supporting working age adults with serious mental illnesses in the community: the rehab and clinic options, case management, prescribed drugs, inpatient hospital, and personal assistance. Substance abuse treatment services (for persons with co-occurring disorders) are discussed in detail in Chapter 5.
Not included in the list are institutional services. Federal law specifically prohibits Medicaid payment for ser-vices to individuals age 22 to 64 who reside in large mental health treatment facilities (labeled “Institutions for Mental Diseases” or IMDs) regardless of their length of stay in such settings. The “IMD exclusion” is described in more detail on the following page.
Medicaid will pay for services for individuals age 21 or younger who are served in psychiatric hospitals or psychiatric residential treatment facil-ities.
Many individuals with serious mental illnesses reside in nursing facilities, and there are federal regulations concerning the services that must be furnished to them. These are discussed in Chapter 7.
A significant number of Medicaid beneficiaries are dually eligible for Medicare. Though Medicare and Medicaid are distinct programs, they intersect in their coverage of certain benefits for dual eligibles. In some instances, both Medicare and Medicaid cover the same services, but Medicare does not cover mental health services furnished outside a hospital, clinic or practitioner’s office and does not cover rehabilitative or case management services.
| TABLE 4-1: Mental Health Servcies and Medicaid Coverage Categories | |||
|---|---|---|---|
| Service | Coverage Category | Mandatory | Optional |
| Psychiatrist | Physician Services | X | |
| Psychologist | Other Practitioners' Services | X | |
| Clinical Social Work | Other Practitioners' Services | X | |
| Hospitalization (Under age 65 with specific exceptions) |
Inpatient Hospital | X | |
| Medications | Prescribed Drugs | X | |
| Personal Assistance | Personal Care | X | |
| Diagnosis | Diagnostic, screening, rehabilitative and preventive services | X | |
| Outpatient Mental Health Services | Outpatient hospital services | X | |
| Clinic Services ("Clinic option") | |||
| Community Support Services | Diagnostic, screening, rehabilitative and preventive services ("Rehab option") | X | |
| Substance abuse treatment | Clinic Services | X | |
| Diagnostic, screening, rehabilitative and preventive services | |||
| Service Coordination/Case Management | Targeted case management | X | |
Medicare mental health benefits have not been updated for a considerable period of time and cover only limited mental health services, which are described below.
Medicare beneficiaries who are not eligible for Medicaid are subject to Part A deductible and co-insurance requirements for inpatient services.
For Medicare outpatient mental health services, beneficiaries must pay a co-insurance of 50 percent (as opposed to the 20 percent co-insurance that applies to all other Part B benefits). Medicaid pays the deductibles and co-insurance for dual eligibles -- those Medicare beneficiaries who are also eligible for Medicaid.
Under Medicaid’s third-party liability requirements, Medicare certified providers are obligated to seek Medicare payment for services furnished to dual eligibles when the service is covered by Medicare. The amount that Medicare does not reimburse may then be billed to Medicaid. It is advantageous for states to secure Medicare payment for mental health services for dual eligibles because it lowers their costs. However, it causes problems for providers because of the length of time it takes to be reimbursed for their charges by both programs.
| The IMD Exclusion3 | |
| When the
Medicaid program was launched in 1965, Congress intentionally excluded
federal payment for services furnished to residents of large mental health
facilities (termed "Institutions for Mental Disease" - IMDs), except, at state
option, individuals age 65 and older with mental disorders.4 An IMD is defined as a
hospital, nursing facility or other institution that is primarily
engaged in providing diagnosis, treatment, or care of persons with "mental
diseases," including medical attention, nursing care, and related
services.5 The "IMD
exclusion" stemmed from the longstanding view that the states - rather than the
federal government - should have principal responsibility for the funding of
specialized mental health hospital services.6 Congress also was concerned that permitting
states to capture Medicaid dollars to underwrite the costs of their mental
health facilities would lead immediately to higher federal Medicaid
outlays.7 In 1972, federal law was changed to permit states to cover inpatient psychiatric hospital services (including residential treatment facilities) for children and youth under age 21.8 In 1988, federal law was again modified to define an IMD as a facility that had more than 16 beds.9 This change permitted individuals with mental illnesses who reside in smaller specialized mental health facilities and residences to receive Medicaid services, including mental health services. In sum, federal law does not allow Medicaid payment for services of any type furnished to any individual under age 65 who resides in an IMD, except for persons under age 21 who are served in a psychiatric hospital or private residential treatment facility. The IMD exclusion applies not only to the mental health services rendered by the IMD but also all other Medicaid services (including health care) for which individuals would be eligible if they were not in an IMD. The classification of a facility as an IMD includes assessing the character and purpose of the facility, its size and the make-up of its resident population. A facility (including a nursing facility) is deemed to be an IMD if more than 50 percent of its residents have mental disorders.10 While federal law prohibits Medicaid payment for the direct services furnished to IMD patients, states may make Medicaid disproportionate share hospital (DSH) payments to IMDs. These are lump sum payments rather than payments for services rendered to specific IMD residents. Between 1997 and 2002, DSH payments to IMDs averaged approximately $3.3 billion annually.11 These payments are subject to federal ceilings and flow principally to public (state and local) IMDs. In the past, CMS permitted states to purchase services from IMDs through Medicaid managed care waiver programs. However, CMS now is requiring these states to end such payments when these waiver programs are renewed because of the IMD exclusion. The IMD exclusion has several implications over and above removing IMDs as a setting where Medicaid reimbursable services may be furnished. One effect is that Medicaid payments for the hospitalization of working age adults are limited to short-stay acute care services furnished in inpatient psychiatric units of general hospitals, so long as such units themselves are not IMDs. Larger state or locally-operated mental health facilities cannot receive Medicaid payment when they furnish similar services to individuals because of the IMD exclusion. Of possibly greater importance is that the IMD exclusion limits states' ability to make use of the Medicaid 1915(c) HCBS waiver authority as a means of underwriting services and supports for working age adults with serious mental illnesses. The §1915(c) waiver authority permits a state to offer home and community services to persons who otherwise would qualify for services in a Medicaid-covered institutional setting (a nursing facility, ICF/MR, or hospital). As a consequence of the IMD exclusion, it is not possible for a state to operate an HCBS waiver program to serve as an alternative to mental health institutional services for working age adults with serious mental illnesses. As discussed in Chapter 6, the use of the HCBS waiver authority can be employed to support adults with serious mental illnesses who meet nursing facility level of care criteria. The HCBS waiver authority has been used more extensively to furnish home and community services to children and youth with severe emotional disturbances12 because Medicaid payment is allowable for services furnished to children and youth in inpatient psychiatric hospitals. |
This section describes in detail federal policies that apply to the principal coverage categories through which community mental health services are furnished to working age adults with serious mental illnesses. It includes information on applicable federal law, regulations, and other CMS guidance concerning each coverage category. State examples are also provided.
As a general matter, a full-featured, comprehensive approach to employing Medicaid funding in support of working-age adults in the community could include: (a) a robust rehabilitative services benefit; (b) targeted case management services; (c) ready access to prescribed drugs associated with the treatment of mental illnesses; (d) inpatient hospital services as necessary; and, (e) personal assistance services to address dimensions of community living that are outside the scope of the rehabilitative services benefit. The linchpin of a full-featured Medicaid mental health services strategy is the rehabilitative services option.
The main Medicaid coverages that states employ to furnish community mental health services are (a) clinic services (often referred to as the “clinic option” and (b) rehabilitative services (the “rehab option”). Each is described in more detail below. Here, these two coverages are compared and contrasted. While either option can serve as a vehicle for securing Medicaid funding for mental health treatment, there are important differences between the coverages, as summarized in the insert below. It is worth noting that services which can be provided under the clinic option also may be furnished under the rehab option but not necessarily vice versa.
One of the main differences between the options is the location of services. Except for services furnished to homeless individuals, clinic services must be furnished on-site at the clinic. Under the rehab option, services may be furnished to individuals in their own home, a community living arrangement and other community locations as well as at fixed mental health program sites or locations. It is for this reason that the rehab option is regarded as more congruent with the principles of Community Support Services (CSS) and recovery.
| Clinic v. Rehab Option13 | |
|---|---|
| Clinic Option | Rehabilitative Services Option |
| Medical model | Recovery model |
| Stabilization | Active treatment and participation |
| Clinic based | Community based |
| Licensed and higher degreed professionals | Professionals, mental health technicians, and peer specialists |
| Organized clinics/outpatient programs | Organizations that provide one or more covered services |
Also, the clinic option requires a high level of direct physician (e.g., psychiatrist) involvement in the provision of services, either by direct service provision or close supervision of staff-furnished services. Under the rehab option, licensed medical and mental health professionals play important roles (through the development and monitoring of individual program plans and the provision of services reserved to them under state law), but they need not always be directly involved in day-to-day service delivery, which may be carried out by a variety of qualified personnel, including Qualified Mental Health Professionals (QMHPs), appropri-ately qualified community workers, and peer specialists. Under the rehab option, a state can draw from a larger provider pool, thereby improv-ing consumer choice and overall system capabilities.
Finally, the clinic option is more or less confined to the provision of a relatively narrow array of psychiatric services and, thereby, is often portrayed as a “medical model.” In contrast, the rehabilitative services option spans a broader range of services and supports, including psychosocial rehabilitation and other key components often associated with recovery.
Federal law does not dictate that a state must choose between the clinic and rehabilitative services options. The two can and do operate side-by-side in many states. Many states reserve the provision of rehabilitative services for individuals with serious mental illnesses while making clinic services more broadly available to Medicaid beneficiaries whose mental health treatment needs can be addressed on an outpatient basis. Alternatively, some states (e.g., Georgia) have elected to unify their coverage of mental health services under the rehab option.
In the past, many states used either the optional clinic coverage or the mandatory outpatient hospital coverage, or both, as their main vehicle(s) to qualify outpatient mental health services for Medicaid payment. Many states retain the clinic option, but several have dropped it in favor of the more comprehensive and flexible rehabilitative services option.14 The clinic option is a broad Medicaid coverage. It is not reserved solely for mental health services. Other health care services may be furnished under the clinic option as well, including ambulatory services, surgical care, and substance abuse treatment.
| Clinic Services | |
| Social Security Act: §1905(a)(9) "clinic services [are those] furnished by or under the direction of a physician, without regard to whether the clinic itself is administered by a phys-ician, including such services furnished outside the clinic by clinic personnel to an eligible individual who does not reside in a permanent dwelling or does not have a fixed home or mailing address." |
The primary distinction between the mandatory outpatient hospital coverage15 and the optional clin-ic coverage16 relates to the nature of a provider entity. Outpatient hospital services are operated as an adjunct to an inpatient hospital. A typical outpatient service is partial hospitalization. Clinics, on the other hand, are freestanding entities. States commonly employ the clinic option to provide outpatient mental health services, often through their network of community mental health centers and/or other similar organizations.
CMS has issued guidance (in the State Medicaid Manual -- included in Appendix A) concerning the provision of “outpatient psychiatric services” that applies equally to services furnished under the out-patient hospital coverage and the clinic option coverage. This guidance clarifies that
This CMS guidance makes it clear that outpatient psychiatric services are limited to the provision of treatment for the person’s psychiatric disorder rather than to support broader rehabilitative purposes.
Treatment services provided under the clinic option (e.g., therapeutic services) must be performed directly or supervised by qualified professionals, and federal rules require that ultimate responsibility for services provided lies with a licensed physician. Virginia, for example, requires that services be rendered or supervised by (a) licensed physicians who have completed three years of post-graduate residency training in psychiatry; or (b) licensed clinical psychologists, clinical social workers, licensed professional counselors and clinical nurses with a psychiatric specialty. Unlicensed personnel may furnish services but must be supervised by qualified professionals.
Virginia’s coverage of mental health clinic services illustrates how this coverage is often fashioned.17 (Virginia also covers an array of community rehabilitative services for persons with serious mental illnesses.) In particular:
Virginia’s mental health clinic services coverage is roughly similar to mental health services offered under commercial health insurance plans. Parallel requirements attach to services provided by freestanding mental health practitioners (e.g., psychiatrists) who are not associated with a clinic. Virginia’s coverage of clinic services is a basic mental health benefit. The state’s rehab option is designed to serve individuals who require more intensive services. Outpatient mental health/ psychiatric services are frequently needed to treat individuals with serious mental illnesses. The main drawback to using the clinic option to provide them is the limited scope of services that may be furnished, and the inability to provide them in a wide range of home and community settings.
The coverage of rehabilitative services is the most important Medicaid option for working-age adults with serious mental illnesses. This coverage (§1905(a)(13) of the Social Security Act; 42 CFR 440.130(d)) permits a state to offer a wide range of services throughout the community. In many states, this coverage is reserved for and underwrites community support services for individuals with serious mental illnesses who require especially intensive supports to aid their recovery. Mental health rehabilitative services generally are not employed in support of individuals whose needs can be met through the provision of basic counseling and psychotherapy services.
| Rehabilitative Services | |
| Social Security Act: §1905(a)(13) "Other diagnostic, screening, preventive, and rehab-ilitative services, including any medical or remedial services (provided in a facility, a home, or other setting) recommended by a physician or other licensed practitioner of the healing arts within the scope of their practice under State law, for the maximum reduction of physical or mental disability and restoration of an individual to the best possible functional level." |
A full-featured, comprehensive coverage of rehabilitative services for individuals with serious mental illnesses will include:
In Chapter 5, more information is provided concerning many of these key components of comprehensive coverage. This array of rehabilitative services should be complemented by other Medicaid services: i.e., inpatient hospital as needed, case management/service coordination, substance abuse treatment, and access to prescribed drugs used in the treatment of mental illnesses (as well as medication management). Providing a comprehensive array of mental health rehabilitative services equips a system with wide-ranging capabilities that can be tailored to meet the specific needs of each individual. Individualized assessment and planning identify the specific rehabilitative services (along with other Medicaid and non-Medicaid supports) that will best address the needs of each person.
The Medicaid statute does not limit the coverage of rehabilitative services solely to mental health services. States offer other types of rehabilitative services in their Medicaid programs, including substance abuse treatment and physical rehabilitation services (e.g., occupational therapy and physical therapy.) However, the coverage of mental health services is among the most common uses of the rehabilitative services coverage. Today, nearly every state employs the rehabilitative services option to underwrite services and supports for individuals with mental illnesses. However, states vary in the scope of services that they offer under the rehab option.
The statutory and parallel regulatory provisions regarding rehabilitative services are brief. They have the following practical meanings:
To date, CMS has not published additional guidance in the form of a State Medicaid Manual transmittal concerning the coverage of mental health rehabilitative services. However, it has issued other guidance.
In 1992, the Director of the HCFA Medicaid Bureau (now CMS) issued an information memorandum to Regional Administers concerning services for persons with mental illnesses that could be included under the “optional rehabilitation benefit.” (This letter is included in Appendix A).
The main points made in this memorandum include the following.
Although more than a decade old, this memorandum is the last official broad federal policy guidance issued concerning rehabilitative services coverage of mental health services. It remains in effect and continues to reflect fundamental CMS policy concerning the coverage of mental health services as rehabilitative services.
There are several facets of the coverage of rehabilitative services that warrant additional discussion. In particular:
Fundamentally, the rehabilitative services coverage option gives states considerable flexibility in aligning Medicaid-funded mental health services with system goals in supporting working age adults with serious mental illnesses. Among the states, there is considerable variety in the services offered under this coverage option; this variety is evidence of the flexibility of the coverage. There are no major federal policy obstacles to states employing the rehabilitative services coverage as a vehicle for promoting recovery or underwriting evidence-based practices.
This coverage option -- like any other -- has its limitations. It does not include services that are not rehabilitative in nature. But, it may be used to combine services that have similar elements or goals (e.g., individual and group therapies, peer supports, medication management). Like any other Medicaid coverage, payment for services is subject to generic Medicaid requirements, including documentation and fee-for-service billing.
The following two pages illustrate how Georgia and Minnesota have crafted their rehabilitative services coverage.
Federal Medicaid law permits a state to obtain federal financial participation in the cost of two distinct types of case management services. One type is “targeted case management” which is used to assist beneficiaries to access both Medicaid and non-Medicaid services, as well as to coordinate and monitor service provision. Targeted case management is a separately coverable service under a state’s Medicaid plan.
The other type can be termed “services case management,” since it involves the internal coordination of the delivery of Medicaid health care services to meet an individual’s needs. Care management activities may also be conducted during the course of furnishing a covered service. For example, ACT features close coordination of a skilled, multi-disciplinary team in support of an individual. Such coordination is reimbursable as part of the provision of ACT. Similarly, the coordination by a mental health professional of mental health rehabilitative services is reimburs-able as a rehabilitative service since it is integral to the provision of such services.
Targeted case management is distinguished from “services case management” mainly in its scope and focus (assisting individuals to obtain and access a wide variety of services). CMS guidance concerning Medicaid case management services is spelled out in the State Medicaid Manual (included in Appendix A). The Manual describes the scope and purpose of targeted case management and also the circumstances when case management may be furnished as a component service under another coverage category. The Manual also discusses claiming case management costs as an administrative expense. In mental health, this is not a common practice.
| Georgia’s Coverage of Mental Health Rehabilitative Services | |
| Until
2001, Georgia relied on a very limited rehabilitative services option to obtain
federal Medicaid funding for community mental health services. In order to
bolster funding for such services as well as adopt a recovery framework across its community mental health
service system, Georgia enhanced its coverage. Georgia's rehabilitative
services coverage is comprehensive. It spans mental health services for persons
of all ages and includes substance abuse services (which may be furnished to
individuals who have a mental illness as well as those who do not). The
coverage allows for the provision of services to individuals who have serious
mental illnesses (or, in the case of children, a severe emotional disturbance)
as well as individuals who need less intensive mental health services. A copy
of Georgia's plan - including its service definitions may be found in
Appendix B. The following services may be furnished to adults with mental illnesses.21
Georgia also fashioned its provider qualifications so that some services may only be furnished by and through "comprehensive community mental health centers" that have the capacity to offer wide-ranging services; other services (e.g., peer support) may be furnished by other mental health providers. Georgia has also provided for step-downs in its plan. ACT is furnished to individuals who require especially intensive services; when ACT is no longer required, a person may receive community support. This use of step-downs assures that necessary services can be furnished in a cost-effective manner to individuals once they no longer require such intensive services. If a person's situation changes and more intensive services are once again necessary, ACT can be reinstated. Georgia mandates the authorization of all rehabilitative services and employs APS Healthcare as its external review organization to conduct authorization and utilization review/management on its behalf. The state's Medicaid Community Mental Health Center Program Manual provides extensive information about the services that Georgia offers under the rehabilitative services option, including provider requirements and utilization management guidelines.22 Georgia's rehabilitative services coverage is an example of a state's pulling together all its community mental health services together under a single, unified Medicaid coverage that features a broad array of services and relies on service eligibility criteria, pre-authorization, and utilization management to ensure that such services are appropriate and cost-effective. |
| Minnesota's Coverage of Mental Health Rehabilitative Services23 | |
| Until
recently, Minnesota confined its community mental health rehabilitative
services coverage to day treatment for adults. Like some other states,
Minnesota funded community support services for individuals with serious and
persistent mental illnesses principally through state-funded grants to its
network of county mental health organizations. In 2001, the Minnesota
legislature authorized the expansion of Medicaid services to cover a broader
array of rehabilitative services in order to increase the resources available
to support people in the community. This was the first step in a multi-year
strategy to expand and enhance community services so that they would be more
flexible and less site-based. It was estimated that approximately 15,000
Minnesotans would receive expanded services and an additional 5,000 individuals
would be able to receive services for the first time as a result of this
change. Under the rehab option, somewhat broader eligibility criteria are
employed than the state's definition of serious and persistent mental
illnesses. Minnesota structured this expansion so that its added costs would be
borne by state rather than county-funds. This freed up state grant funds to
serve individuals not eligible for Medicaid who needed the same types of
services, thus avoiding the emergence of a two-tiered system. Under its amended 2001 rehabilitative services coverage option (in addition to day treatment and the state's general purpose outpatient mental health services coverage), Minnesota added the following services for individuals age 18 and older who have a "substantial disability and functional impairment" in three or more areas:24
These rehabilitative services may be furnished by either county-operated or non-county operated mental health entities certified by the state. Previously, Minnesota relied exclusively on county-operated entities to serve people with serious and persistent mental illnesses. Regardless of type, each certified entity must demonstrate the capacity to deliver the full array of rehabilitative mental health services and meet legislatively established standards concerning staff, program responsiveness to individual needs, coordination with other providers and quality assurance. In 2003, the Legislature approved the second stage of the state's planned expansion of rehabilitative services to include community residential services and Assertive Community Treatment. It also modified county matching requirements to require increased county funding when a person is institutionalized. The aim of this change is to provide incentives to counties to employ non-institutional settings. |
Until 1986, the only practical avenue available for a state to secure Medicaid funding for freestanding case management services was through the HCBS waiver program. In 1986, Congress -- by enacting §1915(g) of the Social Security Act -- gave states the option to cover what were termed “targeted case management” services under their Medicaid plans.25
| Targeted Case Management | |
| Social Security Act: §1915(g): (1) A State may provide, as medical assistance, case management services under the plan without regard to the requirements of section 1902(a)(1) [statewideness] and section 1902(a)(10)(B) [comp-arability]. The provision of case management ser-vices under this subsection shall not restrict the choice of the individual to receive medical assistance in violation of section 1902(a)(23) …. The State may limit the case managers available with respect to case management services for eligible individuals with developmental disabilities or with chronic mental illness in order to ensure that the case managers for such individuals are capable of ensuring that such individuals receive needed services. (2) For purposes of this subsection, the term "case management services" means services which will assist individuals eligible under the plan in gaining access to needed medical, social, educational, and other services. |
The expressed statutory purpose of targeted case management is to assist Medicaid recipients in “gaining access to needed medical, social, educational and other services.” This option is unique among Medicaid state plan coverages because it is not subject to the comparability requirement that services must be available to all beneficiaries. A state may limit its coverage of targeted case management services to a specified group of Medicaid recipients (hence the term targeted). These groups may be defined by condition or diagnosis (e.g., individuals with developmental disabilities) or their situation (e.g., persons who are homeless). A state may also offer these services on a less-than-statewide basis. Targeted case management is the sole Medicaid service that is exempt from the statutory comparability and statewideness requirements without a state’s having to obtain a federal waiver.
States are free to define the groups of Medicaid beneficiaries to whom they will provide targeted case management services and there is no limit on the number of groups that may be served under distinct coverages of targeted case management. For example, a state may have a distinct coverage for Medicaid beneficiaries with mental illnesses, and another for individuals with AIDS or HIV-related disorders. It is not uncommon for states to have multiple targeted case management coverages. A state may define a target population broadly (e.g., all Medicaid-eligible individuals with a mental illness) or more narrowly (e.g., Medicaid-eligible individuals with serious and persistent mental illnesses). As with other state plan services, once a state establishes its target population, case management services must be furnished to all beneficiaries who require them. A state may not limit the number of eligible individuals who may receive these services.
States have the option of limiting the entities that may furnish targeted case management services to individuals with developmental disabilities or mental illnesses. This provision permits a state to link these services to its “single point of entry” system, so that states can maintain a unified approach to service delivery. For example, Minnesota limits the providers of targeted case management services to its county human services agencies; however, they are authorized to contract with other qualified providers.
The services a state offers under targeted case management can be described as “planning, linking, and monitoring” direct services and supports obtained from various sources (the Medicaid program itself, other public programs, and private sources) -- making their scope potentially very broad. As cited by CMS, services and supports that case managers may assist a person to obtain include food stamps, energy assistance, emergency housing, and legal services. As noted above, this type of assistance may not be furnished under the rehabilitative services option.
Permissible targeted case management activities also may include facilitating service/support planning (including assessment), and monitoring the delivery of direct services and supports to ensure they meet the person’s needs. In the mental health arena, targeted case management activities frequently include:
South Dakota’s coverage of targeted case management services on behalf persons with serious mental illnesses spans many of these activities.
Targeted case management activities may be conducted “face-to-face” with the individual (e.g., visiting the person to conduct an interview), over the telephone with the person, and/or on a collateral contact basis (e.g., arranging for an appointment for the person with a local housing program or contacting providers who serve the person to obtain current information about her/his progress). Case manager activities must be specific to the individual beneficiary in order to qualify for Medicaid payment. As with other Medicaid services, individuals have the choice of accepting or rejecting targeted case management services.
| Example: South Dakota | |
South
Dakota furnishes targeted case management (TCM) services to adults age 18 and
older who are severely and persistently mentally ill (as defined by the state.)
The services that may be furnished to individuals in this target population
include:
|
Although a wide range of activities on behalf of beneficiaries may be included within the scope of targeted case management (at state discretion), some cannot. In particular:
Targeted case management services may not be provided to individuals who reside in Medicaid-funded institutional settings (e.g., a nursing facility or an ICF/MR) except that they are reimbursable when furnished -- for up to 180 days in advance of discharge -- in order to facilitate a person’s return to the community. This restriction on targeted case management services arises because: (a) federal regulations concerning Medicaid institutional services require that facilities themselves provide care coordination services to residents, and (b) Medicaid prohibits duplicate payments for the same service. The exception to this policy was specifically spelled out by CMS in 2000 as part of its initiatives to facilitate the community placement of institutionalized persons.26
Targeted case management services are not eligible for federal financial participation when furnished to individuals served in an IMD (because no services furnished to such persons may be claimed while the person is in an IMD). However, as in the case of other institutional settings such as hospitals, such services are eligible for federal financial participation when furnished up to 180 days prior to the discharge of a Medicaid beneficiary from an IMD. In this scenario, federal financial participation may only be claimed once the discharge has taken place. Targeted case management services may be furnished to Medicaid beneficiaries who are homeless or reside in homeless shelters. They may also be furnished to residents of community residential living arrangements that are not IMDs.
Because successfully supporting working age adults with serious mental illnesses in the community often involves not only addressing their treatment needs but also assisting them in other areas (e.g., finding affordable housing or securing employment), the coverage of targeted case management services is a means to support linkages to other services, as well as to monitor the well-being of individuals and assist them to address problems that they might encounter in community living.
Services case management is an integral part of other services in a state’s rehabilitative services coverage, albeit not as a separate, distinct coverage. It is typically delivered in conjunction with service/treatment planning, periodic review of treatment plans, coordination and referral, monitoring, and/or advocacy. Again, it is important to keep in mind that, while these types of case management activities are eligible for federal financial participation since they are integral to the delivery of many services, their scope is limited to the management and coordination of activities and benefits covered as rehabilitative services. When the aim is to obtain or coordinate with other community resources, including non-Medicaid services, federal financial participation is only available under the targeted case management option.
Medications frequently play an important role in addressing mental illnesses. When individuals have appropriate medications, they are less likely to require other costly services. While prescribed drugs are an optional Medicaid benefit, they are covered by all states because they play such a critical role in contemporary health care, including mental health.27
| Medicare Coverage of Prescribed Drugs | |
| In 2003,
Congress enacted the Medicare Prescription Drug, Improvement, and Modernization
Act (P.L. 108-173). This legislation provides for Medicare coverage of
prescribed drugs, starting January 1, 2006. The law also shifts the coverage of
prescribed drugs for Medicare/Medicaid dual eligibles
from Medicaid to Medicare, also effective in 2006. Once the law takes effect,
states may no longer claim federal financial par-ticipation in the costs of
furnishing prescribed drugs to dual eligibles. Dual eligibles must obtain their
medica-tions through Medicare "Part D" plans.28 This change has substantial potential ramifications for dual eligibles. Within federal parameters, each Part D plan may establish its own coverage policies. It remains to be seen whether Part D plans will offer more or less extensive coverage of medications (in comparison to Medicaid coverages) that are critical for persons with serious mental illnesses. |
While Medicaid coverage of prescribed drugs is “optional,” there are important statutory requirements that states must observe in choosing to provide this benefit. Congress enacted provisions in 1990 specifically intended to ensure access to necessary medications by Medicaid beneficiaries, including a requirement that states include in their formularies all prescribed drugs produced by manufacturers that sign “rebate agreements.” Congress also allowed states to exercise some control over prescribed drug formularies through implementation of prior approval/prior authorizations processes and generic substitutions. How-ever, states may not keep a completely closed formulary. Medicaid beneficiaries must be permitted to obtain necessary medications.
In 1998, the Centers for Medicare and Medicaid Services sent a letter to state Medicaid Directors urging states to update their formularies to include the new atypical antipsychotics because they have fewer side effects, thereby increasing treatment compliance. Mental health advocacy organizations (e.g., NAMI and NMHA) have adopted policy positions urging states to maintain open access to these new medications.
There is clinical evidence that individuals with certain mental illnesses do not respond to some medications but will respond to others. As a consequence, an open formulary approach that permits trials using various medications is important for finding the right drug for a person. Additionally, the use of some types of medications must be accompanied by periodic testing. Medicaid payment for such testing is available through the mandatory laboratory and x-ray services benefit. Services such as medication education and medication management may be covered under either the rehabilitative services or clinic services options. Chapter 5 discusses effective practices that combine medication and other treatments.
In recent years, state Medicaid expenditures for all prescribed drugs have risen. State expenditures for medications related to the treatment of mental illness have also climbed rapidly during this period. In response to upwardly spiraling pre-scribed drug spending, states have resorted to a variety of cost containment and utilization manage-ment measures, including caps on the number of drugs that a beneficiary may receive, prior approval processes, fail-first policies,29 dosage and refill limits, the imposition of co-payments, the use of “preferred drug lists” and formularies, and mandatory substitution of generic for brand-name drugs when available.30 Because some of these strategies can be problematic, many states grant exceptions from them. For example, when states employ preferred drugs lists and formularies, non-listed medications remain available, although they may require prior authorization or approval. While states may establish prior authorization and other utilization management processes, their effect cannot be to deny medically necessary medications to beneficiaries. Additional strategies that states are employing (i.e., medication algorithms) are discussed in Chapter 5.
While a number of these strategies have been somewhat effective in containing prescribed drug costs, they can have the unintentional adverse effect of driving up health care costs through increased emergency room utilization. An October 2003 Bazelon Center survey of changes to state prescribed psychiatric drug policies indicates that many states are utilizing a variety of cost containment strategies whose impact is not yet fully known.31
Given the rapidly changing landscape of state prescribed drug policies, it is difficult to pin down the exact effects they have had on access to and the availability of critical medications for individuals with serious mental illnesses. In a few states, some classes of individuals have been exempted from prior authorization or other pharmaceutical restrictions. For example, Colorado’s generic substitution rule exempts medications used to treat mental illnesses with biological bases. New Mexico is implementing a preferred drug list that exempts atypical and typical antipsychotics for individuals with serious mental illnesses.
The Medicaid program provides access to critical medications for individuals with mental illnesses. In general, states may not refuse to reimburse for medications except for non-indicated uses or when an equally efficacious, but lower cost substitute is available. Many states have adopted the sound policy of providing unrestricted access to more efficacious second-generation antipsychotic medi-cations with favorable safety and side effect profiles, even though these medications can be substantially more costly than conventional antipsychotics.
A central goal of community mental health services is preventing institutionalization or hospitalization. The provision of effective rehabilitative and other services can help to avoid hospitalization. For example, ACT is designed specifically with this aim in mind. In many cases, states have structured their managed behavioral health plans to create financial incentives to reduce hospitalization. However, under some circumstances, individuals may need to be treated in a hospital setting.
Medicaid payment is not available for the services furnished to individuals age 22 to 64 in IMDs, but is available for inpatient hospital services furnished to individuals who are admitted to general hospitals as a result of a psychiatric condition, including the psychiatric units of such hospitals, as long as they are not classifiable as IMDs. The coverage of psychiatric inpatient hospitalization falls under the mandatory Medicaid inpatient hospital benefit rather than as a distinct coverage category. States have the option of covering inpatient psychiatric services for children and youth under age 22 as a distinct coverage category.32
As with other hospital services, states can manage the utilization of inpatient hospital services through prior approval processes, including requiring admission approval. In addition, it is common for states to limit length of stay and/or restrict how many times an individual may be admitted. A state may also require continued stay review. In general, states require that individuals be discharged once they have stabilized. In most instances, state policies concerning inpatient psychiatric hospitali-zation more or less parallel their policies for other types of hospitalization.
Personal care services include the performance of daily tasks that individuals without disabilities can perform on their own but individuals with disabilities cannot as a result of functional impairments. Daily tasks include activities of daily living (ADLs) such as bathing, dressing, eating, toileting, and transferring from a bed to a chair, and instrumental activities of daily living (IADLs) such as cooking, grocery shopping, and medication management. Personal assistance may also include supervision and oversight.
| Personal Care/Assistance | |
| Social Security Act: §1905(a)(24) Personal care services furnished to an individual who is not an inpatient or resident of a hospital, nursing facility, [ICF/MR], or [IMD] that are (A) authorized for the individual by a physician in accordance with a plan of treatment or (at the option of the State) otherwise authorized for the individual in accordance with a service plan approved by the State, (B) provided by an individual who is qualified to provide such services and who is not a member of the individual's family, and (C) furnished in a home or other location |
Since the mid-1970s, states have had the option to offer personal care services under the Medicaid state plan, making these services one of the longest standing Medicaid home and community benefits. This option was first established administratively under the Secretary’s authority to add coverages over and above those spelled out in §1905 of the Social Security Act, if such services would further the Act’s purposes.33 In 1993, Congress formally added personal care to the list of services spelled out in the Medicaid statute.
When the option for states to offer personal care was created, it had a decidedly medical orientation. The services had to be prescribed by a physician, supervised by a registered nurse, and delivered in accordance with a care plan. Moreover, they could be provided only in the person’s place of residence. Generally, the personal care services that a state offered included assisting individuals with ADLs. Other forms of assistance, such as laundry and housekeeping were offered on a limited basis, i.e., only when they were incidental to ADL assistance.
Starting in the late 1980s, some states sought to broaden the scope of personal care services, providing them outside the individual’s home in order to enable beneficiaries to participate in community life. In 1993, Congress not only formally incorporated personal care services into federal Medicaid law but also authorized their provision outside the individual’s home. Congress went a step further in 1994, allowing states to: (1) use means other than nurse supervision to oversee the provision of personal care services, and (2) establish means other than physician prescription for authorizing such services. In November 1997, CMS issued new regulations concerning optional Medicaid state plan personal care services to reflect these statutory changes.
Personal care/assistance services are most commonly provided to individuals with physical disabilities. Federal Medicaid policy concerning personal care/assistance services does not forbid their provision to persons with serious mental illnesses, but states do not usually provide them. Some individuals with serious mental illnesses have difficulty performing certain types of activities of daily living and may benefit from the provision of personal care/assistance. When such assistance is needed, it cannot be covered under the rehabilitative services option. Under that option, individuals may be taught -- if needed -- basic life skills so that they are able to be more independent. However, performing or assisting the individual to perform essential life tasks falls outside the boundary of rehabilitative services.
In January 1999, CMS released a State Medicaid Manual Transmittal (included in Appendix A) that significantly revised and updated the Agency’s guidelines concerning the coverage of personal care services. This guidance made it clear that personal care services may span the provision of assistance not only with ADLs but also with instrumental activities of daily living (IADLs), such as personal hygiene, light housework, laundry, meal preparation, transportation, grocery shopping, using the telephone, medication management, and money management.
The guidance further clarified that, for persons with cognitive impairments (including persons with mental illnesses as well as persons who have Alzheimer’s disease or other dementias), personal care may include “cueing along with supervision to ensure the individual performs the task properly.” In other words, a person might be able to physically perform a task but has limitations in actually performing the task because of his/her mental condition. The guidance also explicitly recognized consumer direction of personal care services.
A little more than one-half of the states offer personal care/assistance under their Medicaid state plans. In recent years, states have tended to employ the Medicaid HCBS waiver program rather than Medicaid state plan coverage of personal assistance to expand the availability of personal assistance for individuals of all ages with various disabilities. Personal assistance is a common feature of HCBS waiver programs. Individuals with mental illnesses are not precluded from participating in HCBS waiver programs. However, they can only receive waiver services if they meet the state’s institutional eligibility criteria for hospital, nursing facility, or ICF/MR services.
Relatively few states furnish personal care/assist-ance routinely to support significant numbers of individuals with mental illnesses. Like other Medicaid services, a state may not discriminate on the basis of disability when it offers a service under the state plan. Consequently, a state may not deny personal care/assistance services to individuals who have mental illnesses but otherwise meet the state’s criteria for such services. At the same time, a state may not reserve personal care/assistance solely for such individuals. Personal care/assistance services cannot be targeted by specific type of disability.
Often, there are impediments to obtaining personal care/assistance for people with serious mental illnesses. Despite the changes in federal policy during the 1990s that permitted states to “de-medicalize” these services, some states have not changed their policies. Also, in many states, the threshold “service eligibility” criteria for personal care/assistance continue to focus on difficulties in performing activities of daily living, giving lesser weight to IADL needs. Additionally, some states continue to circumscribe the scope of personal care/assistance services by limiting it to the provision of services in the individual’s living arrangement. Finally, securing personal care services on behalf of individuals with mental illnesses requires coordination between “systems of care” because personal care services are managed through different networks and programs than those that provide mental health services.
| West Virginia's Personal Assistance State Plan Amendment | |
In 2002,
West Virginia amended its Medicaid state plan coverage of personal assistance
to provide that such services could be (a) furnished outside the beneficiary's
home and (b) used in support of individuals to obtain and retain competitive
employment. In particular, West Virginia's coverage specifies that
|
In a few states, personal care funding has been used to partly underwrite the costs of community residences, including residences that support individuals with mental illnesses. Personal care funding was employed extensively by Michigan in the late 1980s as a means of financing community residential services for persons with mental illnesses and developmental disabilities. Michigan’s approach recognized that many of the supports that people receive in residential settings included personal care and that Medicaid funding could be employed to pay for a portion of the costs of operating such residences. In some states, personal care funding pays for some of the costs of operating domiciliary-type residential settings where individuals with mental illnesses may reside. However, in many instances, these settings do not furnish mental health services and supports for such individuals.
Recently, a few states have started to use personal assistance services to support the employment of individuals with disabilities. This development has been spurred on by the passage of the federal Ticket to Work and Work Incentives Improvement Act, Medicaid “buy-in” eligibility options (as discussed in Chapter 3), and CMS Medicaid Infrastructure Grants, which include a requirement for states to assess and strengthen personal assistance services to support people with disabilities who work.
At least three states -- California, West Virginia34 and Utah -- have augmented their existing Medicaid state plan coverage of personal assistance services specifically to support people with disabilities who work, including individuals with serious mental illnesses.35 In each instance, the state plan amend-ments take advantage of the 1993 amendments that allow for the provision of personal assistance outside the person’s home to include the provision of employment-related personal assistance.
In 2003, California amended its Medicaid state plan to give individuals the option of receiving personal care services in the workplace to the same extent they are provided in the home.36 Utah has recently added innovative employment-related personal care coverage, which is discussed in more detail in Chapter 5.
Personal care/assistance potentially offers an avenue for underwriting non-treatment supports for individuals with serious mental illnesses, including those that support employment. Not all states offer personal care and, in some that do, individuals may not qualify for services based on the state’s eligibility criteria, or there may be other barriers to obtaining these services.
The Medicaid program provides states with a means to obtain federal financial participation in the costs of supporting working-age adults with serious mental illnesses in the community. The principal option available to states for mental health services is the rehabilitative services option. This option is flexible and can span a wide range of services in the community, at a state’s discretion. It is the option that aligns best with recovery as the central philosophy in supporting individuals with mental illnesses. Targeted case management can be an important adjunct to rehabilitative services. While the personal assistance coverage also might make important contributions in supporting individuals in the community, employing such services hinges on whether a state has included personal assistance in its state plan and the parameters of its coverage.
O’Brien, J., Lanahan, P., and Jackson, E. (2003). Recovery in the Community: Volume II: Program and Reimbursement Strategies for Mental Health Rehabilitative Approaches Under Medicaid. Washington, DC: Bazelon Center for Mental Health Law. Available for purchase from the Bazelon Center: bazelon.org
This joint Technical Assistance Collaborative and Baz-elon Center report contains a wealth of very useful information concerning provider qualifications for rehabilitative services.
Rosenbaum, S., Teitelbaum, J., & Mauery, D.R. (2002). An Analysis of the Medicaid IMD Exclusion. Washington, DC: Center for Health Services Research and Policy, Department of Health Policy, George Washington University School of Public Health and Health Services. (18 pages).
This report discusses the IMD exclusion in considerable detail.
Kaiser Commission on Medicaid and the Uninsured (2004). Implications of the New Medicare Law for Dual Eligibles: 10 Key Questions and Answers. (Author) Washington, DC. Available at kff.org/medicaid/4160.cfm
This issue brief provides a more detailed explanation of the new Medicare drug coverage policy and its implications for dual eligibles.
See O’Brien, J., Lanahan, P., and Jackson, E. (2003). Recovery in the Community: Volume II: Program and Reimbursement Strategies for Mental Health Rehabilitative Approaches Under Medicaid. Washington, DC: Bazelon Center for Mental Health Law. Available for purchase from the Bazelon Center: bazelon.org.
Partial hospitalization is a structured program of active treatment. The program may be furnished in hospital out-patient settings or by community mental health centers. A physician or therapist must certify that partial hospitalization is necessary in order to avoid more costly inpatient hospitalization.
Federal policies and guidance concerning the IMD exclusion is contained in the State Medicaid Manual, Part 4 (Services), Sections 4390-4390.1.
The exclusion is located ni §1905(a) (paragraph B) of the Social Security Act. The authority for a state to furnish services to residents age 65 and older in an IMD is in §1905(a)(14) of the Act.
§1905(i) of the Act; 42 CFR 435.1009
Prior to the enactment of Medicaid, the Social Security Act had excluded payments for services furnished to state mental health facility residents.
At the time Medicaid was enacted, state mental health facility outlays exceeded the estimated initial costs of the Medicaid program.
P.L. 92-603; §1905(a)(16) of the Social Security Act.
P.L. 100-360, §1905(i) of the Social Security Act.
State Medicaid Manual, op. cit.
Burwell, B., Sredl, K., & Eikan, J. (2003). Medicaid long-term care expenditures in FY 2002. Cambridge, MA: The MEDSTAT Group, Inc.
Five states now operate HCBS waiver programs for children with serious emotional disturbances.
This table was developed by Steve Day at the Technical Assistance Collaborative.
CFR Outpatient services: 42 CFR 440.20(a). Clinic services : 42 CFR 440.130(d).
§1905(a)(2)(A) of the Social Security Act.
§1905(a)(9) of the Social Security Act.
Virginia Department of Medical Assistance Services (June 2000). Mental Health Clinic Manual.
Ibid. Beneficiary must meet all of the following criteria: “(1) Requires treatment in order to sustain behavioral or emotional gains or to restore cognitive functional levels which have been impaired; (2) Exhibits deficits in peer relations, deficits in dealing with authority, hyperactivity, poor impulse control, clinical depression, or demonstrates other dysfunctional symptoms having an adverse impact on attention and concentration, the ability to learn, or the ability to participate in employment, educational, or social activities; (3) Is at risk for developing or requires treatment for maladaptive coping strategies; and (4) Presents a reduction in individual adaptive and coping mechanism or demonstrates extreme increase in personal distress.”
Peer support is a component rehabilitative service that is just beginning to be included in state plans. While it is a recommended part of comprehensive coverage, states must be sure they work closely with CMS in obtaining coverage approval. See the description of Georgia’s approved coverage of peer support in Chapter 5.
O’Brien et al. (2003), op. cit.
Several of these services are also available to children with SED (severe emotional disturbance).
Available at www2.state.ga.us/departments/dhr/mhmrsa/pdf/Provider-ManFY04.pdf
Based in part on personal communication from Sharon Autio, Minnesota Department of Human Services. Information about mental health services in Minnesota is at dhs.state.mn.us/Contcare/mentalhealth/default.htm Information concerning the rehab option is at dhs.state.mn.us/main/groups/disabilities/documents/pub/dhs_id_004956.hcsp
Minnesota does not have a close-ended list of areas, but provides examples such as "interpersonal communication skills, community resource utilization and integration skills, crisis assistance, relapse prevention skills, health care directives, budgeting and shopping skills, healthy lifestyle skills and practices, cooking and nutrition skills, transportation skills, medication education and monitoring, mental illness symptom management skills, household management skills, employment-related skills, and transition to community living services."
P.L. 99-272
CMS Letter to State Medicaid Directors: July 25, 2000. Olmstead Update #3. Available at cms.hhs.gov/states/letters/smd725a0.asp
42 CFR 440.120(a).
For a discussion of the potential implications of this change, Please see: Jeffrey S. Crowley (2004). The New Medicare Prescription Drug Law: Issues for Dual Eligibles with Disabilities and Serious Conditions. Washington DC: Kaiser Commission on Medicaid and the Uninsured. Available at kff.org/medicaid/7119.cfm.
Fail-first policies require that certain medications only be available if alternative, lower cost medications are found ineffective.
For information on the measures that states have taken to slow down prescribed drug spending, see: Crowley, J, Ashner, D., and Elam, L. (2003) Medicaid Outpatient Prescription Drug Benefits: Findings from a National Survey, 2003. Kaiser Commission on Medicaid and the Uninsured: Washington DC.
Bazelon Center for Mental Health Law (October 2003). Medicaid Policies on Outpatient Prescription Psychiatric Drugs: A Survey.
42 CFR 440.10.
42 CFR 440.167.
The description of West Virginia’s plan amendment is based on the National Association of State Medicaid Directors’ Center for Workers with Disabilities Project Directors’ Alert (April 2002). “WV Wins PAS State Plan Approval.”
A state may not cover personal assistance in its Medicaid program for the sole purpose of supporting the employment of individuals. Hence, this type of change is limited to states that already offer personal assistance.
In particular, California provides that “Services in support of work are only available to the extent that service hours used at work are included in the total personal care service hours authorized for the recipient based on the recipient’s need for services in the home. Authorized personal care services utilized by a recipient for work shall be services that are relevant and necessary in supporting and maintaining employment and shall not supplant any reasonable accommodations required under the Americans with Disabilities Act or other legal entitlements or third-party obligations.”
| Finding the fit between Medicaid coverage options and effective community services for working-age adults with serious mental illnesses involves aligning a state's goals and objectives for community support with Medicaid coverage requirements. This chapter describes how several states have used Medicaid to underwrite components of community support services for adults with serious mental illnesses, focusing on the rehabilitative services option. |
So far, the Handbook has described the essential features of community support, and the general federal policy parameters that affect how states can use Medicaid to support working-age adults with serious mental illnesses. This has included a description of evidence-based practices and the components of the community support system, along with an in-depth discussion of Medicaid eligibility and coverage options. This chapter illustrates how states have crafted coverages to secure Medicaid funding for important components of community support. As noted in Chapter 4, states have considerable latitude in shaping mental health services under the rehabilitative services and other Medicaid coverage options. Examining actual state coverages provides useful information about practical and realistic applications of Medicaid to underwrite the costs of community mental health services.
Finding the fit between the mental health services that a state wishes to offer and Medicaid coverage requirements can be challenging. Mental health practices and treatment approaches frequently (and appropriately) are described in terms that may not readily lend themselves to translation into Medicaid coverage. Important concepts such as recovery involve supports that are individualized, consumer-driven, and geared toward helping individuals live successfully in the community. Promoting a recovery-oriented system of services and supports through Medicaid involves selecting services that promote independence and focus on assisting individuals to take progressively greater control over their lives (e.g., skill building, illness management and peer services). Service planning approaches that focus on the individual and stress rehabilitation are also ways of promoting recovery.
Translating mental health practices, approaches, and concepts into covered Medicaid services requires states to fashion benefits in the context of the Medicaid coverage framework depicted on the next page. This framework requires a state to answer in concrete, practical operational terms several questions about the services it intends to offer. Mental health approaches and practices must be described in coverage terms in order to secure Medicaid funding.
As noted in Chapter 4, there is no pre-established, federally defined array of Medicaid community mental health benefits that a state must include in its coverage. Federal policy defines the terms under which federal payments flow to the states and a state must conform to those terms. But, it is up to each state to decide how to meld Medicaid funding into its mental health system, taking into account coverage requirements and limitations on what Medicaid will pay for. Fundamentally, a state's overarching goals and objectives for supporting its citizens with serious mental illnesses should serve as the basis for deciding which Medicaid services it will offer. In this context, Medicaid is properly regarded as a tool for advancing important state policy aims by enabling a state to leverage and amplify its own financial resources.
| Stressing Recovery in Service Planning | |
| Maine stresses rehabilitation and recovery in its coverage of
community support services for persons with severe and disabling mental
illnesses. Maine's rules concerning the rehabilitation/service plan provide
that1 "An individualized rehabilitation/service plan is developed for and with a person receiving community support services by a designated community supports provider.… An individualized rehabilitation/service plan
|
"Finding the fit" starts with a state's identifying the service capabilities it wants to establish, and sorting out which services can be underwritten in whole or in part by Medicaid. At the same time, a state must recognize that there may be service capacities or components that have to be underwritten with other non-Medicaid funds, or secured through other public programs. It is also important to recognize that coverage design is multi-dimensional and necessitates decisions about provider qualifications, services eligibility criteria, medical necessity criteria, and other dimensions. Coverage should be approached holistically, identifying how each component will work in tandem with others. For example, securing coverage of Assertive Community Treatment (ACT) under the rehabilitative services option has proven to be relatively straightforward for states. However, ACT is but one component of an overall system of supports, many of which are needed to effectively support individuals when they no longer require intensive ACT services.
Because Medicaid has distinctive requirements, an important consideration for states is to avoid the creation of a two-tiered service system where Medicaid-funded services differ markedly from the services that a state offers to non-Medicaid eligible individuals who are members of the same priority population. Medicaid eligibility limitations can result in a portion of the priority population of individuals with serious mental illnesses not qualifying for Medicaid even though they may have relatively low incomes. A more seamless system for serving individuals in the priority population is achieved when a state's Medicaid coverages are derived from and mesh with a state's design of its service system. To the extent possible, this result is advanced when Medicaid and state funding streams employ:
The latitude afforded states in designing Medicaid coverages and managing Medicaid services means that the use of Medicaid financing need not lead to a bifurcated approach to serving individuals with serious mental illness.
| Medicaid Coverage Framework | |
|
In deciding whether to cover services through Medicaid, many factors need to be weighed beyond the technical feasibility of securing Medicaid. One factor, for example, can be the "readiness" of service providers to furnish a service, especially for an entirely new service, or imposing a higher standard of care on an existing service. In some respects, securing Medicaid funding for evidence-based practices is less a problem of the technical feasibility of covering them (since most fall well within Medicaid coverage boundaries) than a question of the capabilities of providers to meet the high standards that such practices envision. In addition, the initiation of a new service may need to be accompanied by technical assistance and training. Obviously, another practical but, nonetheless, critical factor is whether the state has the necessary matching dollars to underwrite the costs of adding a new service.
In addition, there is no doubt that the management of Medicaid services is demanding in its own right, especially when a state plans to employ prior authorization and active utilization review/management to ensure the appropriateness and effectiveness of services. Hence, managerial readiness also is a factor that may need to be weighed in deciding when to cover a service under Medicaid.
This chapter illustrates how states have employed Medicaid to cover several important components of community support. These examples are not presented as "ideal" or "model" coverages. Instead, they are intended to show the feasible range of services that can be covered through Medicaid, especially under the rehabilitative services option. The types of service capabilities/ capacities that are illustrated include:
States routinely employ Medicaid to cover many other types of community mental health services, including individual and group psychiatric therapy, and counseling. These essential core treatment services are included in nearly every state's Medicaid program. Service coordination/case management also plays a vital role in the provision of community mental health services. As discussed in Chapter 4, states most commonly cover case management by employing the targeted case management coverage option.
In this chapter, the focus is on coverages that can promote successful community living for working age adults with serious mental illnesses. These coverages prevent or reduce hospitalization and contribute to recovery. Additional information about these and other types of services that states offer may be found in Recovery in the Community, a Bazelon Center for Mental Health publication that includes extensive information on the full range of services that states principally cover under the rehabilitative services option.2
| Crisis services are designed to meet the immediate needs of individuals experiencing a mental health emergency. They are flexible, mobile, and available 24 hours a day, 7 days a week. The need for crisis services may arise from a change in a person's living situation, emotional state, medication side effects, or a host of other reasons. Crisis services can range from telephone support to dispatching an on-site emergency team and following up with stabilization services. |
Crisis intervention is a critical component of the Community Support System and is covered under Medicaid in some form by every state. Effective crisis intervention is vital to the well-being of individuals with serious mental illnesses, who, in its absence, potentially face dislocation, institutionalization, and even more tragic outcomes. Effective crisis intervention reduces strains on a state's other health care resources, and can prevent unnecessary confinement. There is ample evidence demonstrating that the availability of crisis services reduces costly emergency hospitalization,3 making this coverage an especially wise, cost-effective investment for states. Crisis services may be provided under either the clinic or rehabilitative services options, but, as emphasized in Chapter 4, covering them as a rehabilitative service offers greater flexibility in responding to individual needs. Given the nature of mental health crises, crisis services should be available at any time and any place, and this capability is severely constricted under the clinic option, especially with respect to follow-up crisis stabilization services.
Thirty states cover crisis management/intervention as a distinct service under the rehabilitative services option.4 In addition, crisis services are frequently included as a component of other services (e.g., Assertive Community Treatment, where the ACT team is expected to respond round-the-clock to emergencies experienced by individuals whom the team supports). Where a state offers distinct coverage of crisis intervention but also includes crisis intervention as a component of other services, only one coverage may be billed for each intervention.5 Many states also assign case managers the responsibility to arrange for crisis intervention services in their coverage of targeted case management services.
Typically, crisis services usually have three components: assessment/first response, stabilization/ follow-up, and crisis residential services. Assessment/first response is the rapid, initial response to an individual who is experiencing a crisis, both to assess the nature of the crisis and identify next steps to address the crisis. Crisis stabilization occurs after assessment and involves the development of an individual crisis treatment plan that includes short-term goals and identifies the immediate services needed to achieve those goals. These services may be offered either at a mental health clinic or furnished by a mobile treatment team. For example, under its rehabilitative services coverage, Georgia provides for both "clinic-based crisis management" and "out of clinic crisis management," depending on where the crisis can be addressed most appropriately and effectively. Finally, crisis residential services are furnished when the crisis is sufficiently acute to require round-the-clock support in order to stabilize the person. Crisis residential services are time-limited and may span a variety of interventions, depending on the needs of the individual. Crisis residential services may mean providing a bed in a small group home or a facility with significant nursing and other medical coverage.
States that elect to use the rehabilitative services option to cover crisis services can incorporate all these elements and have the freedom to deliver all components of the service through mobile teams and in a variety of settings throughout the community. Crisis teams may include a peer specialist. West Virginia (below) and Minnesota (next page) provide examples of state coverage of crisis services under the rehabilitative services option.
| Assertive Community Treatment (ACT) is a mobile program of services that supports individuals who have especially intensive needs. ACT services are delivered by an interdisciplinary team that supports a limited number of individuals in any setting conducive to the individual. ACT services include monitoring, medication management, service referral, crisis intervention, short-term counseling and other interventions. ACT is provided under the rehabilitative services option. |
Many states have used the rehabilitative services option to cover the provision of (P)ACT services (Program of Assertive Community Treatment). As described in Chapter 1, ACT is a mobile, holistic, interdisciplinary approach to supporting people in the community who require especially intensive services. ACT is an evidence-based practice that is an integral component of the Community Support System and has demonstrated cost-effectiveness.6 The goal of ACT is to increase community tenure and reduce the incidence of crisis and hospitalization, enabling the individual to achieve greater integration and stability. ACT programs go by different names in different states (e.g., Intensive Community Treatment) but all are characterized by mobile, 24 hour a day, 7 day a week coverage9 and feature comprehensive treatment planning/ response, continuity of staff, one-on-one services and small caseloads. ACT sometimes is described as a form of case management.10 However, ACT teams are responsible for providing a full range of coordinated services to individuals, including crisis intervention, medication management, skill building and illness management. As of 2003, 18 states furnished ACT under the rehabilitative services option. However, it is challenging to fully cover all ACT services through Medicaid, and, as a result, ACT programs usually are supplemented with state-only dollars. In general, Medicaid funds finance 40-90 percent of the costs of ACT services.11
| West Virginia's Coverage of Crisis Services7 | |
| West
Virginia covers both crisis intervention and stabilization. It also provides
crisis support in small community residential settings to support individuals
who require a structured setting. West Virginia's crisis coverage is as
follows: Crisis Services are based on a continuum of care ranging from the less restrictive setting (e.g., crisis intervention in the home/community) to a more restrictive setting (treatment in a residential facility).
|
| Minnesota's Coverage of Crisis Services8 | |
| Minnesota's coverage of crisis services addresses three phases:
crisis assessment, intervention, and stabilization. A crisis treatment plan
must be prepared as soon as practical. The first two phases are provided to all
persons; stabilization is provided as required. In Minnesota, county mental
health programs or providers contracted by counties furnish crisis response
services. Crisis response team members must complete at least 30 hours of
crisis response training every two years. The following is excerpted from the
Minnesota Medicaid state plan: Crisis Assessment is an immediate face-to-face appraisal by a physician, mental health professional, or a mental health practitioner under the clinical supervision of a mental health professional, following a determination that suggests the recipient may be experiencing a mental health crisis. The crisis assessment evaluates any immediate needs for which emergency services are necessary and, as time permits, the recipient's life situation, sources of stress, mental health problems and symptoms, strengths, cultural considerations, support network, vulnerabilities, and current functioning. Crisis Intervention is a face-to-face, short-term intensive service provided during a mental health crisis to help a recipient cope with immediate stressors, identify and utilize available resources and strengths, and begin to return to the recipient's baseline level of functioning. Crisis intervention must be available 24 hours a day, 7 days a week.
|
ACT is a high-end, intensive service that states reserve (via services eligibility and medical necessity criteria) for individuals with serious mental illnesses. It was originally developed specifically for individuals with schizophrenia or other psychotic disorders who exhibit a particularly high degree of functional impairment (e.g., inability to perform necessary tasks of daily living and/or incapacity to maintain a safe environment or avoid dangerous situations). ACT also is targeted to individuals who have a history of admissions to crisis residential, inpatient psychiatric, or other acute settings, and for whom less intensive mental health services have proven ineffective. ACT can also help to facilitate the transition of individuals from inpatient and other institutional settings to the community. Frequently, individuals who receive ACT have co-occurring disorders (mental illness and substance abuse) and thereby benefit from the integrated mental health/ substance abuse services.
ACT teams maintain frequent, consistent contact with the individuals they support, varying the frequency and duration of services based on the person's progress and needs.12 The composition of an ACT team includes a clinical/administrative team leader, a psychiatrist, registered nurses, a consumer/peer counselor, a qualified mental health professional (e.g., clinical social worker, licensed professional counselor), vocational specialist, and other qualified staff. This multi-disciplinary composition enables the team to address the full range of an individual's needs. ACT teams operate with a staff to consumer ratio in the range of 1:10 to 1:12. Extensive materials concerning (P)ACT are available from the National Alliance for the Mentally Ill.13
The mobile nature of ACT means that, if a state intends to offer ACT in its Medicaid program, the rehabilitative services coverage must be employed. Since ACT teams furnish the full-range of services required by each individual, other mental health services usually are not provided concurrently. Also, the provision of ACT is usually subject to prior authorization and reauthorization.
ACT has been covered under Medicaid by some states for several years. Examples of states with extensive ACT team provider networks include Wisconsin and Michigan. In 1999, HCFA (now CMS) issued a letter to state Medicaid directors (included in Appendix A) explicitly recommending that states seriously consider including ACT as a part of their community-based mental health services based on solid research concerning its efficacy. The letter urged that
"States should consider this recommendation in their plans for comprehensive approaches to community-based mental health services. Programs based on ACT principles can be supported under existing Medicaid policies, and a number of States currently include ACT services as a component of their mental health service package. Consumer participation in program design and the development of operational policies is especially key in the successful implementation of ACT programs."14
While several states now cover ACT in their Medicaid programs, many others have ACT teams that are not covered under the state's rehabilitative services option. In total, 28 states offer ACT in at least part of their state, regardless of funding source.15
Because ACT is interdisciplinary and teams furnish a wide range of services, payment for ACT services is sometimes misunderstood to require the billing of each specific service furnished by the team (e.g., separately billing for nursing services or skill build-ing). However, states are not required to un-bundle ACT services for billing purposes. Instead, ACT services may be billed by time unit (e.g., 15 minute units), provided that the services furnished by a team member are documented as falling under the scope of the state's ACT coverage.
Because ACT teams are operated by provider organizations, it is also not necessary that the billing be submitted by individual team members. The District of Columbia provides an example of a state that covers ACT. An in-depth profile of the operational features of Georgia's ACT coverage are provided in attachment A to this chapter.
| ACT Coverage Example: District of Columbia | |
The
District specifically spells out the amount and scope of ACT services directly
in its state plan, providing that "The consumer's ACT Team shall complete a
comprehensive or supplemental assessment and develop a self care-oriented
Individualized Service Specific Plan (ISSP) (if a current and effective one
does not already exist). Services offered by the ACT team shall include:
|
Some states cover a somewhat less exhaustive team-delivered service than ACT that is sometimes called "intensive case management" (ICM) (which should not be confused with targeted case management). ICM programs are structured similarly to ACT but are of a lower intensity, although there are similarities in the profiles of individuals served and the use of a team-based approach to service delivery. Making both ACT and ICM available can be a useful strategy for accommodating the diversity of the seriously mentally ill population as well as the changing needs of a given individual over time. Maine is an example of a state that offers both ICM and ACT under its rehabilitative services coverage. In Maine, ICM teams furnish "intensive interventions and supports to clients who otherwise might not be engaged in more traditional mental health services." ICM is also covered by some states that do not offer a standalone ACT program under Medicaid.
ICM (which can also go by other names such as mobile treatment teams) usually furnish services similar to ACT but often with higher consumer to staff ratios and more limited service availability (i.e., they may not be available around the clock). Services and supports are available wherever they are needed within the community. As is the case with ACT, ICM providers are expected to furnish a full range of services.
| Missouri's Coverage of Intensive Case Management | |
| Missouri's "Intensive Community Psychiatric Rehabilitation" provides
an example of Intensive Case Management (ICM). There are many similarities
between Missouri's ICM coverage and ACT; however, the ICM program is
time-limited and does not have the same staffing ratio and requirements of
ACT.17 Missouri's
coverage is as follows: Intensive community psychiatric rehabilitation is a level of support designed to help recipients who are experiencing an acute psychiatric condition to be served in the community, thereby alleviating or eliminating the need to admit them into a psychiatric hospital or residential setting. It is a comprehensive, time limited, community-based service delivered to recipients who are exhibiting symptoms that interfere with individual or family life in a highly disabling manner. Intensive community psychiatric rehabilitation is intended for the following recipients:
A treatment team comprising individuals required to provide specific services identified on the Individualized Treatment Plan (ITP) delivers this level of service to recipients who meet the community psychiatric rehabilitation (CPR) eligibility criteria. |
| Illness management, an important evidence-based practice, involves educating the consumer to improve coping strategies, utilize medications more effectively, and reduce relapses and hospitalization. |
The ability to understand and self-manage one's own mental illness is central to recovery. Illness/ disability management is a recognized evidence-based practice. Individuals can be successfully educated about their own warning signs of relapse and can develop relapse prevention plans and strategies to guard against its occurrence.18 Illness management is sometimes referred to as disability or symptom management. The main thrust of illness management is to equip individuals with skills to help them manage all aspect of their illness and its impact on their lives. Its ultimate goal is to allow individuals to progressively take greater command of their own lives and recovery. The skills imparted include day-to-day coping skills, anticipating the need for services, evaluating treatment and clinical options, symptom management skills, and others needed to manage one's illness. Illness management can be covered under the rehabilitative services option.
Twenty-four states cover illness management under Medicaid for individuals with serious mental illnesses. New Hampshire provides an example of a state that offers illness management as a core community mental health service covering many dimensions of community support (e.g., skill development and psychotherapeutic interventions) and, hence, serves more ends than strictly illness management. However, the overall thrust of the coverage is illness management and recovery.
| New Hampshire's Coverage of Illness Management Services | |
| New
Hampshire stresses recovery-oriented illness management services. New Hampshire
added Mental Illness Management Services (MIMS) to its Medicaid program in
1992. MIMS consists of a menu of services delivered in the community that are
designed to enhance individuals' ability to manage their mental illness and
live independently in the community. In 2002, over 900 adults received MIMS.
The coverage spans several dimensions, including educating the person about
coping mechanisms when symptoms emerge, developing skills to handle daily tasks
and social/ professional/medical interactions, and assisting the person to
develop stronger communication and conflict resolution skills. Individuals may
receive one or several of these services depending on their needs and can
receive them in either a clinic setting, the home, or work
environment.19 New
Hampshire's rules define MIMS as follows:20 MIMS shall be face-to-face interventions, and include the following elements and objectives:
|
| Peer support and peer-delivered services are central to the recovery movement and can cross a variety of service categories. Peer support services are delivered from consumer to consumer. Several states provide that individuals who have experienced a mental illness may qualify to furnish services such as community support and skills training. |
Because peer support is a hallmark of the recovery movement and an essential element of community support, more states are incorporating peer support and peer-delivered services into community mental health services. Peer support stresses that individuals -- with the assistance of peers -- should play an active and direct role in their own recovery, thereby promoting hope and empowerment and enhancing their own ability to live successfully in the community. Moreover, enlisting trained individuals who themselves have experienced serious mental illnesses to support their peers brings the consumer perspective to the front lines of recovery. Peers may furnish clubhouse-style peer counseling to support consumers in managing their illness, telephone support to ensure consumers are ready and on-time for work, on-site crisis management, and other relevant recovery supports. This support can greatly assist individuals by increasing their ability to self-manage their symptoms, advocate for themselves, and utilize effective coping skills to avert potential crisis situations.21`
Essentially, there are two avenues for covering peer support and peer-delivered services. Peer support may be covered as a distinct rehabilitative services benefit. States can also weave peer-delivered services into other covered rehabilitative services, such as living skills training or social support, by enabling individuals who have experienced a mental illness to qualify as practitioners. As previously noted (see Box p. 78), New Hampshire's MIMS coverage provides for qualified peers to furnish some services. In the case of ACT, program standards require that a peer be a member of the ACT team.
| "Studies show that consumer-run services and consumer-providers can broaden access to peer support, engage more individuals in traditional mental health services, and serve as a resource in the recovery of people with a psychiatric diagnosis. Because of their experiences, consumer-providers bring different attitudes, motivations, insights, and behavioral qualities to the treatment encounter."22 |
Currently, eleven states23 offer peer support services in some form, mostly by providing for peers to qualify as practitioners of rehabilitative services. Iowa provides an example of a state that enlists peers in the provision of services. At this point, only two states (Georgia and South Carolina24) have implemented a distinct Medicaid peer support coverage under the rehabilitative services option. Georgia's precedent setting coverage is described in Attachment B to this Chapter. Georgia also has incorporated peer-delivered services into many of its other rehabilitative services.
| Many working-age adults with serious mental illnesses require skills restoration training to overcome the functional limitations that accompany their illness and live in the most integrated setting possible. This training is a vital component of recovery-oriented services and promotes independence. Services such as targeted case management also can play an important role in assisting individuals to secure stable housing. |
The fundamental purpose of Medicaid rehabilitative services coverage is the restoration of func tioning. Serious mental illness is accompanied by significant functional limitations in areas such as basic living and social skills. Furnishing rehabilitative services that address these limitations and equip individuals to function more independently is an essential ingredient in promoting successful community living for working age adults with serious mental illnesses. In order to qualify as a rehabilitative service, services furnished to improve living skills must have a restorative focus.
| Peer Support Counselors in Iowa25 | |
| Iowa has integrated peer-delivered services into the package of services it offers under the rehabilitative services option by providing that some services may be furnished by peer support counselors. A peer support counselor is defined as "a person who has been diagnosed with a chronic mental illness, who provides counseling and support services to other adults with the same or a similar diagnosed mental illness."26 A peer support counselor must meet five requirements: (1) Successfully complete training that is supervised by an LPHA (Licensed Professional of the Healing Arts - an MD or licensed psychologist); (2) Abide by professional ethics adopted by National Board of Certified Counselors that bind licensed mental health counselors; (3) Provide qualified services that are aligned with the rehabilitative portion of an individual's treatment plan, and that are supervised by an approved professional;(4) Demonstrate competency in service delivery as determined by meeting professional standards of a national organization overseeing that particular service area; and (5) Provide services through employment or by a contract with a Medicaid-approved provider.27 Peer support is not defined as a distinct service but is woven into other rehabilitative services, including (1) community living skills training; (2) employment-related services; and (3) day program services for skills training and development. |
A substantial majority of states cover the restoration of basic or daily living skills as a rehabilitative service. These services assist individuals to live more independently by enabling them to do more for themselves. Such services can include "training, guiding, supervising, cueing or reminding, or techniques to teach how to overcome barriers by changing how the person interacts with his/her environment."28 The span of basic or daily living skills addressed through these services can be quite wide-ranging, including IADLs such as food preparation, money management, grocery shopping, personal hygiene, medication self-administration and housekeeping. As discussed in Chapter 4, the actual performance of daily activities (e.g., meal preparation) for a person requires alternate coverage under the personal care/ assistance category. Iowa (below) and Minnesota (following page) provide examples of the coverage of basic living skills.
In a similar vein, the restoration of social and interpersonal skills focuses on developing interpersonal relationships, solving problems and resolving conflicts. Most states cover the restoration of these skills as a rehabilitative service.
Keeping in mind the broad goal of achieving maximum community integration, functioning, and recovery, sixteen states offer elements of social and recreational supports under the rehabilitative services option. States may provide certain services that facilitate the development of social networks, increase environmental adaptability, and ultimately strengthen an individual's ability to live independently. These services are aimed at employing recreational activities that focus on reducing isolation and withdrawal and that support goals identified in an individual's treatment plan. For example, Missouri's psychosocial rehabilitation coverage includes "participation in informal and organized group activities to help reduce stress and improve coping, which are normative to the community, such as exercise, self-education, sports, hobbies, supportive social networks, etc."29 However, social/recreational activities not aimed at recovery-related or therapeutic objectives may not be covered under Medicaid.
Some states have distinct coverages of services for the restoration of basic living skills, social, interpersonal and other skills; elsewhere, states combine these services with others.
Supporting Individuals in Community Living Arrangements
Promoting successful community living for working age adults with serious mental illnesses involves not only meeting their service needs but also aiding them to secure housing. Having a stable living arrangement is extremely important. There is a strong correlation between homelessness and mental illness -- 46 percent of U.S. adults who experience homelessness at least once in a given year have also had a mental health problem during that year.30 The importance of stable housing was underscored by the President's New Freedom Commission on Mental Health, which asserted that "The lack of decent, safe, affordable, and integrated housing is one of the most significant barriers to full participation in community life for people with serious mental illnesses."31
Medicaid and especially rehabilitative services can contribute significantly to successful community living by underwriting services and supports in a person's living arrangement. But, other resources must be tapped in order to secure housing for individuals who cannot afford it. Except in the case of Medicaid-funded institutional services (e.g., nursing facilities), Medicaid dollars cannot be used to pay for housing or other living expenses ("room and board") of Medicaid beneficiaries. This policy encompasses all types of Medicaid community services for people with disabilities. As in the case of some other services (e.g., employment) that contribute to recovery, successful community living strategies cannot rely solely on Medicaid funding. Tapping federal, state, local and private housing resources -- along with a person's own resources -- is critical to help individuals maintain stable housing. Medicaid funding can then be employed to bring services and supports into their living arrangements.
| Iowa's Coverage of Services for Restoration of Basic Living Skills | |
| Iowa offers a good example of a typical state's coverage, offering "services [that] are age-appropriate skills training or supportive interventions that focus on the improvement of communication skills, appropriate interpersonal behaviors, and other skills necessary for independent living or, when age-appropriate, for functioning effectively with family, peers, and teachers. Training for independent living may include, but is not limited to, skills related to personal hygiene, household tasks, transportation use, money management, the development of natural supports, access to needed services in the community (e.g., medical care, dental care, legal services), living accommodations, and social skills (e.g., communicating one's needs and making appropriate choices for the use of leisure time)."32 |
| Minnesota's Coverage of Services for `Living and Social Skills33 | |
| Minnesota ties together training in living and social skills in its
"Mental Health Basic Living and Social Skills" coverage: ARMHS [Adult Rehabilitative Mental Health Services] Basic Living and Social Skills are activities that restore a client's skills essential for managing his or her illness, treatment, and the requirements of everyday independent living. These skills need to be restored if recipients are to be able to leave inpatient or residential programs and live independently in the community. If these abilities are not developed clients may require inpatient or other intensive services. [Services are furnished to] Instruct, assist, and support a recipient in areas such as:
|
Community living is best exemplified through a supportive housing model, which assists individuals to live in community-integrated living arrangements. Supportive housing programs adhere to four basic tenets: permanence and affordability, safety and comfort, accessibility and stability, and empowerment and independence.35 Supportive housing for persons with serious mental illnesses includes several fundamental components -- assistance to tenants to help them understand and meet the requirements of tenancy, comprehensive assessment, coordination of psychiatric services, medication management, crisis services, connections to other community resources, and staff training.36 Several of these components (e.g., basic living/social skills training, assessment services/targeted case management, medication management, and crisis intervention) can be covered under Medicaid. It is estimated that Medicaid can underwrite anywhere from 25 to 80 percent of the services that fall under the "supportive housing" umbrella.37 The rehabilitative services option provides a means to fund many services that are integral to supportive housing. Assisting individuals to access housing support programs and/or locate affordable housing is Medicaid reimbursable through targeted case management. More information on the role that Medicaid can play in supportive housing is found at the Corporation for Supportive Housing web site.38
| Impact of Community Housing | |
| A 2003 survey by the Tennessee Department of Mental Health and Developmental Disabilities (TDMHDD) found that individuals with mental illnesses who were provided a community residential placement experienced a sharp reduction in their admissions to psychiatric hospitals. In the two years after relocating into homes, a sample of 105 individuals experienced a total of 10 hospital admissions, compared to 154 before placement. The state's Creating Homes Initiative, a targeted, grassroots, local community, multi-agency collaborative operated by the TDMHDD Office of Housing Planning and Development has spearheaded the department's efforts to develop and expand permanent housing options (including group homes, apartments, and home ownership) and services for people with mental illness and co-occurring disorders.34 |
The rehabilitative services option permits states to furnish therapeutic support services in the person's living arrangement. Such living arrangements can include the person's own home, his or her family's home if that is where the individual lives, and other living arrangements (e.g., supervised apartments, group homes, and other congregate arrangements) operated by mental health service providers. With respect to the latter, Medicaid services furnished at such sites are reimbursable as long as the living arrangement does not run afoul of the IMD exclusion (i.e., do not have more than 16 beds), and the services furnished have a rehabilitative purpose. The types of services and supports furnished at a person's living arrangement cover a wide array of typical rehabilitation services, including basic living skills training, medication management, illness management, and other therapeutic interventions.
State approaches to the provision of services and supports to people in their living arrangement vary. In some instances, states simply provide that rehabilitative services may be delivered in any community location, including a person's private residence. Some states explicitly cover rehabilitative services in licensed community residences as "residential services" or distinctly provide for their delivery in a variety of living arrangements. Often, the use of licensed community residences is reserved for individuals who require some level of continuous oversight and a more structured setting. Nebraska's residential services coverage provides an example of how a state can employ supervised community residences as a bridge to more independent living arrangements. Maine's coverage of "in-home support" (following page) illustrates another approach by furnishing services not only in licensed community settings but also a person's own home.
While Medicaid funding is not available to pay for housing and other everyday living expenses, the rehabilitative services option can be employed to bring critical services into a wide variety of community living arrangements. As pointed out by the President's Commission, the aim should be to create "flexible, mobile, and individualized support services…to support and sustain consumers in their housing."39
| Employment-related services that support entry into or maintenance of employment may be furnished under Medicaid. They can include onsite crisis supports, symptom management and others. Job searching services and job training and coaching are not eligible for Medicaid reimbursement. |
For individuals with serious mental illnesses, securing employment is an important step in their recovery and their living successfully in the community. Many adults with serious mental illnesses strongly desire to work, yet very few are in fact working. According to the President's New Freedom Commission, there is a 90 percent unemployment rate among this population.40 Anecdotal evidence of the importance of employment as a consumer service abounds. Each year, the Georgia Mental Health Consumer Network asks individuals about their top priorities, and the answer consistently is "wanting jobs … better jobs."42
| Nebraska's Residential Services Coverage | |
The
Psychiatric Residential Rehabilitation Program is designed to
Program Components: The program provides
Staffing Requirements: The program must have appropriate staff coverage to provide services for clients needing to remain in the residence during the day. Bed Limitation: The maximum capacity for this facility shall not exceed eight beds. Waivers for a maximum of ten beds may be granted when it is determined to be in the best interests of clients. Supportive Services: The program provides the following supportive services for all active clients: referrals, problem identification/solution, and coordination of the Residential Rehabilitation program with other services.41 |
| Maine's Coverage of In-Home Support | |
| In
Maine, community support rehabilitative services are furnished to individuals
who have a "severe and disabling mental illness." In-home support is furnished
to individuals who require some measure of personal supervision in addition to
therapeutic supports services. The following description of in-home support is
excerpted from the Maine Medical Assistance Manual: In-home support is personal supervision and therapeutic support services provided to an adult with major mental illness in his or her home or temporary living situation pursuant to an individual support plan (ISP). These services are provided in order to allow a person to maintain the highest level of independence possible. To the degree possible, persons using this service will participate in the hiring and training of the support worker. In-home support has two levels of service as indicated in A and B below.
|
Chapter 3 outlined the options available to states that permit individuals with disabilities to maintain Medicaid eligibility after they are successfully employed. State adoption of the Medicaid "buy-in" option is an important step in overcoming an important barrier to employment -- namely, the loss of Medicaid eligibility due to excess earnings. Many working-age adults with serious mental illnesses need supports in order to secure and maintain employment. Supported employment is a recognized evidence-based practice. Furnishing supports to individuals that lead to their employment can result in reductions in their utilization of mental health services and promotion of their self-esteem and recovery. In order to secure and maintain employment, individuals may need basic or daily skill development services along with other relevant skill training to function successfully in the work place (sometimes called social and interpersonal skills.) Illness management services can also help an individual to maintain employment. Additionally, peer supports can also be very helpful in aiding and encouraging individuals to work. Targeted case management services also can be useful in connecting individuals to employment services, including vocational rehabilitation.
Another dimension of employment is job-specific training. Federal Medicaid policy, however, prohibits the use of Medicaid funds to pay for "vocational" services (including sheltered workshops), except under limited circumstances.43 As a consequence, it is not possible to employ the rehabilitative services option to underwrite the costs of job-specific training (e.g., job coaches) in order to craft full-featured supported employment services. Consequently, when it is a state's aim to promote employment, it is necessary to complement the supports that fit under the rehabilitative services option by tapping other resources to secure job-specific training services for individuals. Those resources can include vocational rehabilitation services or funding, jobs programs, or other non-Medicaid state and local funds. Depending on the funding source, it can be especially important to coordinate mental health and vocational services.
Irrespective of funding source, at least 43 states provide some type of supported employment service to consumers with mental illness. In the context of the rehabilitative services option, however, about 30 states include employment-related services in their programs. Some states break these services out separately while others include them in other skills-related service coverages. Texas and Kansas provide examples of states that have specifically broken out employment-related services under the rehabilitative services option. Iowa's coverage qualifies supported employment providers to furnish these services in addition to mental health agencies.
Using Personal Care Services In the Work Place
As noted in Chapter 4, Utah (as well as other states) recently added the coverage of "employment-related personal care/assistance services. This coverage is available to support individuals with serious mental illnesses who are returning to work. Utah is working with a major mental health agency to employ personal care to support individuals in the Salt Lake City area, illustrating that supporting people with serious mental illness in their return to work need not necessarily be confined to the use of the rehabilitative services option. This effort is described on the following page.
| Family psychosocial education and therapy services include educating the family about the nature of a person's mental illness and training family members how to support the person and to problem solve. |
Educating family members and significant others about the nature of an individual's mental illness and enlisting their active participation as members of the treatment team in support of the individual is an essential component of the Community Support System and a recognized evidence-based practice. According to SAMHSA, individuals whose families actively participate in a psychoeducation program show a significant decline in relapse rates and re-hospitalizations. In some cases, these rates can decrease by as much as 50 percent over the course of a year.44 As noted in Chapter 2, a substantial percentage of working-age adults with serious mental illnesses live with their families. Medicaid can play an important role in underwriting family-education. So long as these services focus on addressing the needs of the Medicaid beneficiary, they are eligible for Medicaid funding. For example, Ohio stipulates that these services must be "directed exclusively to the well-being and benefit of the person served and are assistive to maintaining independent living in the community."45 A wide range of family education activities meet this test.
Thirty-one states offer some type of family education services. In general, family support/ education includes educating the family about the nature of the individual's illness, resolving confusion about the family member's treatment plan and its goals, equipping the family with skills to help the person in managing his or her illness (e.g., symptom and medication management) and dealing with crises, and problem-solving. Family education services are only furnished when the individual agrees that the family member or significant other may participate.
| Texas' Coverage of Employment-Related Services | |
| Texas offers employment-related services that provide "age appropriate training and supports that are not job specific, and have as their focus the development of skills to reduce or overcome the symptoms of mental illness that interfere with the individual's ability to make vocational choices, attain, or retain employment. Included are activities such as skills training related to task focus, maintaining concentration, task completion, planning and managing activities to achieve outcomes, personal hygiene, grooming, communication, and skills training related to securing appropriate clothing, developing natural supports, and arranging transportation. Also included are supportive contacts in school, or on-or-off the work-site, to reduce or manage behaviors or symptoms related to the individual's mental illness that interfere with job performance, or progress toward the development of skills that would enable the individual to obtain or retain employment."46 |
| Kansas' Coverage of Employment-Related Services | |
| Kansas defines employment-related services as: "Assistance which shall have as its objective the development and implementation of a plan for assuring appropriate consumer community integration and the provision of both supportive counseling and problem-focused interventions in whatever setting is required to enable consumers to manage the symptoms of their illness. Services provided at the worksite must be focused on assisting the individual to manage the symptom of mental illness, and not to learn job tasks. These interventions will fall primarily in the areas of achieving the required level of concentration and task orientation, and facilitating the establishment and maintenance of effective communications with employers, supervisors and co-workers."47 |
| Utah's Coverage of Employment-Related Personal Assistance | |
| In 2003,
Utah received CMS approval to furnish employment-related personal care
services. Valley Mental Health - the behavioral health contractor for the Salt
Lake City area - and the Utah Medicaid program are collaborating to employ this
benefit to furnish people with mental illnesses a short-term personal care
assistant to facilitate their return to work. Utilization data has shown that
individuals with serious mental illnesses who do manage to secure
employment often experience an immediate spike in their symptoms due to
increased stress and anxiety, frequently leading to a rapid loss of employment,
which thrusts them full-time back into high-intensity services. In an effort to
combat this, the Utah Medicaid program is working through Valley to arrange for
"frontloaded" personal assistance for individuals with serious mental illnesses
to re-enter the job market. During the first 90 days of employment, consumers
would receive intensive personal care services to help them ease into the new
situation. As their stress level decreases and they become more accustomed to
the job, personal care hours would taper off until the individual no longer
requires them. The hope is that not only will the consumer be more likely to
retain employment, but also that the use of crisis and other intensive services
can be avoided.48 In addition to assistance with ADLs and IADLs, the Utah coverage provides for transportation to and from the workplace, case management support to access and coordinate services and supports available at the work site, and coordination of employment-related personal care with other Medicaid state plan services. These include home-based personal care and services "designed to assist an individual with a disability to perform daily activities on and off the job that the individual would typically perform if they did not have a disability." Employment-related personal care services are available through agencies or through individual personal assistants who are employed by the beneficiary. Utah requires that, for this arrangement, the beneficiary use the services of an approved intermediary to coordinate claims submittal and payments (including tax payments). |
Vermont offers "collateral contact" to family members or other significant individuals, which includes "meeting, counseling, training or consultation" services. The type of services needed are left up to the discretion of the family.49 Maine, in its rehabilitative services coverage, provides for "family education and consultation, if desired by a person receiving community support services and his or her family, in order to help family members develop support systems and help the person manage his or her mental illness."50
Family education is distinguishable from the "family therapy" psychiatric therapeutic treatment modality because it envisions an active role for the family in aiding the person's recovery.
| Medication management is a body of practice that stresses the selection of appropriate medications for individuals, along with continuing review and the provision of additional services that reinforce individuals' adherence their medication regimen. |
The emergence of evidence-based practices is beginning to influence state coverages of certain types of services. For example, states frequently cover medication management and education under Medicaid. As discussed in Chapter 4, medications can play an important role in the treatment of serious mental illnesses. The typical focus of medication management is to make sure that individuals follow their medication regimen and are educated about the importance of adhering to the regimen. Medication management as an evidence-based practice, however, envisions a more intensive course of treatment that is now beginning to be reflected in some state coverages. The District of Columbia (following page) provides an example of an especially comprehensive coverage of medication management services.
Medication "algorithms" have also emerged as an important medication management practice; at least 21 states utilize some type of algorithm in part or all of their state.51 A medication algorithm is a set of best-practice clinical procedures that physicians are encouraged to follow in treating consumers. Medication algorithms focus on specific types or classes of medications (i.e., newer atypical anti-psychotics) and also include other best practice procedures such as patient and family education. One state that has developed a noteworthy Medicaid medication algorithm program is Texas. The Texas Medication Algorithm Project (TMAP) began in 1996 and focuses on the implementation of public services, as well as to promote the cost-effective provision of services. Specifically, TMAP focuses on adults with schizophrenia, bipolar disorder, and major depressive disorder, and comprises four distinct parts:
| District of Columbia: Medication Management Coverage | |
| In the
District of Columbia, medication treatment and management are combined.
Medication/Somatic Treatment services encompass a full range of services
related to the prescription and monitoring of the effects of medications as
well as medication education. In particular: "Medication/Somatic Treatment services are medical interventions including physical examinations; prescription, supervision or administration of mental health-related medications; monitoring and interpreting results of laboratory diagnostic procedures related to mental health-related medications; and, medical interventions needed for effective mental health treatment provided as either an individual or group intervention. Medication/Somatic Treatment services include monitoring the side effects and interactions of medications and the adverse reactions a consumer may experience, and providing education and direction for symptom and medication self-management. Group Medication/Somatic Treatment shall be therapeutic, educational and interactive, with a strong emphasis on group member selection, facilitated therapeutic peer interaction and support.52" |
TMAP stresses the importance of a global approach that enlists providers, physicians, consumers, and family members in maximizing treatment effectiveness and reducing inefficiencies in the service delivery system. According to state officials, adults who participated in TMAP fared better than those who did not in areas such as symptomatology, cognition, and need for hospitalization.
Missouri is currently implementing a program that is similar to TMAP but focuses specifically on a physician education approach to medication management. The Missouri Department of Mental Health and the Division of Medical Services (the state's Medicaid agency) have joined forces to pilot a privately-funded physician education/algorithm approach to Medicaid psychiatric drug management. The goals of the Collaborative Behavioral Health Project are to: (a) improve the quality and consistency of medication prescribing practice based on national best practice guidelines; (b) improve adherence to medication plans; and, (c) lower prescribed drug outlays.
Through the project, physicians are provided reports based on Medicaid claims data that profile and compare their practices to best practice guidelines and include: (a) psychiatric medications prescribed by a physician for each Medicaid beneficiary during a given month; (b) any other Medicaid psychiatric prescriptions filled by any beneficiaries on the provider's list (i.e., medications prescribed by another physician); and (c) indicators where the physician's prescriptions were not in accordance with clinical best practices (e.g., prescribing an outdated antipsychotic medication). This feedback is purely informative -- providers are not "punished" for their prescription habits. The aim is to give physicians a complete picture of their prescribing practices and prompt changes in accordance with best practices. Since these reports are generated monthly, the state can see whether or not changes are actually occurring.
This program began in January 2003 and each month, between one-third and one-half of providers are reported to be altering their prescription practices based on information they receive. In addition, physician feedback about the program has been overwhelmingly positive. While specific figures are unavailable, Missouri estimates that the program has provided a substantial cost-savings.53
| Individuals with co-occurring disorders can pose a variety of service delivery challenges. This section provides information concerning services for individuals with co-occurring substance abuse disorders and co-occurring developmental disabilities. It describes efforts to effectively meet the needs of these individuals. |
A significant number of individuals with serious mental illnesses also have a co-occurring disorder.54 Substance abuse is a frequently co-occurring disorder among working-age adults with serious mental illnesses. There are also a significant number of individuals with developmental disabilities who have a co-occurring serious mental illness. Effectively supporting individuals with co-occurring disorders poses three principal challenges:
Surmounting these challenges often requires pursuing multiple strategies, including disseminating information about effective treatment strategies, cross-training provider staff, re-aligning service delivery system structures and policies, and promoting effective collaboration at the local level.
Federal Medicaid policies, of course, most directly bear on the question of financing services for individuals with co-occurring conditions. The following sections describe policies affecting services for persons with serious mental illnesses with co-occurring substance abuse disorders and developmental disabilities. Examples of how various states support these individuals using Medicaid dollars are provided.
Services for Individuals with Co-Occurring Substance Abuse Disorders
In 2001, an estimated 20 percent of adults with serious mental illnesses were dependent on or abused alcohol or illicit drugs.55 An estimated 3 million adults had both a serious mental illness and a substance abuse disorder.56 It also is estimated that more than one-half of all individuals with serious mental illnesses served through the public mental health system have co-occurring substance abuse disorders. There is a growing recognition that co-occurring substance abuse disorders are the "expectation, not an exception" among individuals with serious mental illnesses.57
Individuals with mental and substance abuse disorders pose major challenges for public systems. They experience high rates of homelessness, hospitalization, and criminal justice system involvement. The costs of serving these individuals are estimated to be about twice as great as persons with a single disorder. However, only about 19 percent of individuals with serious mental illnesses who have a co-occurring substance abuse disorder are treated for both disorders and many are not treated for either.58 When individuals with co-occurring disorders receive effective services, they experience substantially better outcomes, and the high costs associated with frequent hospitalization and incarceration are significantly reduced.
A consensus exists that integrated treatment, which combines mental health and substance abuse services within the same, multidisciplinary system of care, is the most effective approach to successfully serving persons with co-occurring substance abuse disorders. As noted in Chapter 1, "Integrated Dual Disorder Treatment" is a recognized body of evidence-based practice that leads to demonstrably higher rates of dual recovery and thereby reduced costs. In 2001, the majority of states were implementing this practice statewide or in some parts of their states.59
Several barriers have been identified to effectively serving individuals with co-occurring mental illnesses and substance abuse disorders. Two major barriers are:
Several states have taken steps to address these problems. In about one-half of the states, a single state agency (often termed a "behavioral health" authority) administers both mental health and substance abuse services; many states have carried consolidation of service delivery down to the regional or local level.60 For example, New Mexico created a behavioral health authority in 1997 and, since, has taken several additional steps aimed specifically at improving services for individuals with co-occurring disorders, including integrating such services at the regional level.61
Elsewhere, state mental health and substance abuse authorities are collaborating to strengthen services for individuals with co-occurring disorders, including implementing "no wrong door" policies. In 2003, for example, the Texas Department of Mental Health and Mental Retardation (TDMHMR) and the Texas Commission on Alcoholism and Drug Abuse concurrently issued rules specifically to ensure that individuals with co-occurring psychiatric and substance abuse disorders are not denied services in their respective systems because of a co-occurring disorder. The TDMHMR rules include standards to "ensure the effective and coordinated provision of services to individuals who require specialized support or treatment due to co-occurring psychiatric and substance abuse disorders." These standards apply to community mental health services underwritten with Medicaid and other funds. They spell out both knowledge and technical competencies that provider staff must possess, as well as standards of care.62
In a similar vein, the Missouri Department of Mental Health's Divisions of Comprehensive Psychiatric Services and Alcohol and Drug Abuse jointly developed and implemented "Core Rules for Psychiatric and Substance Abuse Programs" that identify common treatment principles, outcomes and administrative standards.63 The Divisions also have promulgated practice guidelines for the treatment of individuals with the most severe co-occurring disorders.64
States are also implementing innovative strategies for financing integrated services for individuals with co-occurring disorders, blending together state and local tax dollars, mental health and substance abuse block grant funds, and Medicaid dollars.65
Effectively supporting people with co-occurring substance abuse disorders frequently requires states to pursue strategies that fall outside the direct purview of federal Medicaid policy. In this arena, states must often invest dollars to create new system capabilities by financing services' start-up costs. Many states have used federal mental health and substance abuse block grant dollars to do so, as well as to underwrite necessary provider training.66
Federal Medicaid Policies Affecting Services for Persons with Co-Occurring Substance Abuse Disorders
States may offer substance abuse treatment services under the Medicaid clinic and/or rehabilitative services coverage categories. Federal policies concerning Medicaid coverage of substance abuse services are not different from those that apply to the coverage of mental health services. Under the rehabilitative services option, for example, states may elect to cover treatment services, counseling and other services that promote the recovery of persons who have a substance abuse disorder.
In general, states make markedly less extensive use of Medicaid to underwrite substance abuse services than mental health services.67 Only about one-half the states offer substance abuse services under the Medicaid rehabilitative services option and several of these cover only limited outpatient services. There are several states that do not cover substance abuse services for adults at all under either the clinic or rehabilitative services options. At the same time, many states have implemented more robust coverages of substance abuse services. For example, Minnesota's coverage spans a wide-array of substance abuse rehabilitation services.68
In the case of individuals who have co-occurring disorders, assorted problems have arisen in integrating Medicaid substance abuse treatment with mental health treatment. One problem stems from the practice of targeting services by "primary" disorder. For example, individuals who have "primary" mental disorders might be prevented from receiving substance abuse services when services eligibility criteria limit services to persons who have a "primary" substance abuse disorder (and vice versa). As services for individuals with co-occurring disorders have evolved, limiting services by "primary" disorder has given way to the recognition that there is no hierarchy of disorders because both exist independently. Along these lines, state policy changes, such as those made in Texas and Missouri, aid in avoiding this problem. Another problem often arises in the arena of provider qualifications. When provider qualifications that apply to substance abuse and mental health services differ significantly, it can be difficult for a provider in one system of care to employ Medicaid dollars that are tied to the other system of care that has different provider qualifications. In order to integrate services within one system or the other, states should consider strategies to cross-certify providers to furnish services. The foregoing problems, of course, parallel some of the generic challenges previously described in serving individuals with co-occurring disorders. Federal Medicaid policy does not dictate that the coverage of mental health and substance abuse services must be constructed in a silo-like fashion (i.e., the coverage of substance abuse services must be completely distinct from the coverage of mental health services). Some states have crafted interlocking rehabilitative option coverages of mental health and substance abuse services. For example, Georgia's rehabilitative services coverage (see Appendix B) spans both mental health and substance abuse services. Some of the services included in Georgia's coverage (e.g., ACT) are available for persons who have a mental illness, a substance abuse disorder, and/or co-occurring disorders. Defining services in this fashion avoids creating silos. As one would expect, some services that Georgia offers are specific to the treatment of substance abuse or mental illnesses (because not everyone who has a substance abuse disorder also has a mental illness, and vice versa.) In addition, Georgia's provider specifications require that community agencies have the capability to serve both populations, another means of avoiding silos.
Missouri's substance abuse rehabilitative services coverage (Comprehensive Substance Abuse and Rehabilitation -- CSTAR) specifically incorporates services for individuals with co-occurring disorders. Services include individual and group counseling, psychosocial education, residential support, family therapy and co-dependency counseling. CSTAR provides for the management of co-occurring disorders and mental health services.69 It builds on the previously described steps that Missouri has taken to adopt common principles for the treatment of substance abuse and mental health services. In Missouri, providers who meet applicable requirements can be cross-certified to furnish both mental health and substance abuse services.
When a state has elected not to cover substance abuse treatment services as a distinct coverage under its state plan, it may still provide for their provision as components of the rehabilitative services that it furnishes to individuals with serious mental illnesses. Many states have incorporated substance abuse/addictive services into their coverage of mental health rehabilitative services and, thereby, created a framework for furnishing integrated treatment for individuals with co-occurring disorders through a single treatment team, or a program using a single service plan.70 For example, ACT teams must have the capacity to address the needs of individuals who also have a substance abuse disorder.
State coverages of ACT services include the treatment of both disorders, employing an integrated, multidisciplinary approach. Even when a state separately covers substance abuse services, these services still may be incorporated into mental health rehabilitative services provided there is no duplicate billing for services. In addition, if a state's coverage of substance abuse services provides only for limited outpatient benefits, additional services can be incorporated into the coverage of mental health services (e.g., furnishing substance abuse counseling as part of illness management services).
In some states where Medicaid mental health services are furnished through a 1915(b) or 1115 waiver program, the program encompasses both mental health and substance abuse services. For example, as discussed in Chapter 6, Iowa elected to pull together both types of services together under a single 1915(b) waiver program rather than continue to operate each type of service under a distinct waiver program. While spanning both categories of services in a waiver program does not necessarily resolve all the problems associated with integrating services for persons with co-occurring disorders, it offers the potential for avoiding or mitigating funding silo problems.
Federal coverage policies do not preclude the integration of mental health and substance abuse services for persons with co-occurring disorders. States may craft rehabilitative services coverages that provide for such integration. More challenging for states may be creating and expanding the capacity to deliver integrated treatment services for individuals with these co-occurring disorders.
Services for Individuals with Co-Occurring Developmental Disabilities
Depending on the definition of mental illness used, there are varying estimates of the number of persons who have both a serious mental illness and a developmental disability such as mental retardation (sometimes referred to as persons with a "dual diagnosis").71 Some state administrators estimate that the rate of occurrence of major mental illness in individuals with a developmental disability is similar to the rate in the general population.72 In other words, probably between 5 to 7 percent of adults with developmental disabilities also have a major mental illness. Although in absolute terms the number of working-age adults who have a developmental disability and a major mental illness is relatively small, frequently they consume a disproportionate share of service system resources.
Serving individuals who have both a serious mental illness and a developmental disability is garnering increased attention. Such individuals frequently pose significant service delivery challenges. Problems arise in the arena of diagnosis, with mental illness sometimes misidentified as maladaptive behavior. Diagnosis is also more challenging among individuals with more severe mental retardation. Since this is a very low incidence population, and treatment can be complex, there are a limited number of providers and professional practitioners (especially psychiatrists) who have the requisite capabilities to serve these individuals.
For persons who have a both a mental illness and a developmental disability, systems issues frequently arise at both the state and local levels, stemming from lack of coordination between the mental health and developmental disabilities services sys-tems. As with substance abuse, these issues often revolve around questions concerning "primary diagnosis." In some states, a significant number of individuals with a co-occurring developmental disability have been institutionalized in state IMDs.73 In addition, these individuals frequently experience high rates of community hospitalization. Sometimes, they bounce between the mental health and developmental disabilities systems or unfortunately, fall between the cracks. These persons also experience involvement in the criminal justice system.
Several states have taken active steps to improve services for persons with serious mental illnesses and developmental disabilities. In 2002, the National Association of State Directors of Developmental Disabilities Services (NASDDDS) and the National Association of State Mental Health Program Directors (NASMHPD) surveyed state MRDD and mental health directors to identify elements important for effectively serving individuals with these co-occurring disorders. Department directors identified strategies that they regard to be important, including entering into written interagency agreements, creating interagency task forces, coordination of services and payments, cross-system provider training, and joint involvement in hospital discharge planning.74 In about one-third of the states, the administration of mental health and developmental disabilities services is located in the same state agency, a step that can potentially facilitate the delivery of services to individuals with these co-occurring conditions.
The Ohio Departments of Mental Health and the