Early Intervention Financing and Resources: Final Report. 4. Policy Implications and Lesssons Learned


The following observations emanate from the site visits and conversations with RAISE investigators and staff:

Each site has developed a creative solution to financing NAVIGATE services. As expected, each site used health insurance to pay for each of the NAVIGATE services for insured participants, other than SEE, which was only partly covered for those individuals who were Medicaid beneficiaries. For participants who were uninsured, the sites used other public resources to cover all NAVIGATE services. These tactics will generalize to locations with some of the same characteristics for behavioral health care financing. While the tactics are somewhat idiosyncratic, they do offer lessons for other future sites who wish to offer early intervention services to emulate.

Some specific observations:

  • The site at the Mental Health Center of Denver has a capitated Medicaid arrangement to pay for all behavioral health services, which the site uses to pay for the full range of RAISE NAVIGATE services and treatments. This arrangement began in the 1990's throughout the State of Colorado, and covers all Medicaid mental health services, not just those for treating first-episode psychosis.

  • The PeaceHealth site in Eugene, OR is affiliated directly with an FQHC. The revenues for any behavioral health encounter at the FQHC are generous enough that the costs of care are covered and even permit a cross-subsidy for individuals whose coverage does not include the full cost of their care and treatment.

  • The St. Clare's Health System site in Denville, NJ has sufficient funds from state and local behavioral health services grants and annual contracts to cover the costs of NAVIGATE services.

  • The Burrell Center in Springfield, MO also funds the NAVIGATE services with state behavioral health funds through a contract with the Department of Mental Health. For those who qualify, Medicaid funds were matched to state funds in a Purchase-of-Service arrangement that covers some services, such as supported employment, which has very limited availability in Missouri.

  • The site at the three-county Community Mental Health Authority in Lansing, MI uses Medicaid to pay for many of the behavioral health services for those who are qualified, and many of the participants remain on their parents' health insurance, which is easier and lasts up to age 26 because of the ACA provisions. Many of the services are not covered by private insurance plans, and even Medicaid does not cover all services, so the site uses state and local behavioral health funds for "bad debt" to cover some services. Michigan also has an evidence-based practices implementation initiative, which covers supported employment services.

  • The Michigan site also took advantage of "presumptive eligibility" for Medicaid. Beginning January 1, 2014, states can allow Medicaid-participating hospitals to conduct presumptive eligibility determinations for any Medicaid-eligible populations regardless of whether the state is using presumptive eligibility in any other setting or for any other populations in the state (ACA, 2011). Until online applications are sufficiently linked to state and federal databases so that individuals or families will no longer need to document their income, citizenship, and other information, presumptive eligibility seems to be a "best practice", particularly for patients who need immediate care and support services such as, people with first-episode psychosis (Sebastian, 2011).

Other future sites wishing to offer services to individuals during a first episode of psychosis could use these tactics, where available, to supplement insurance payments for more traditional medically-oriented services such as medications, medical management visits, and psychotherapy. Tactics include capitation financing arrangements, affiliation with a FQHC, or Medicaid coverage of innovative home and community-based behavioral health services. Implementing such financing tactics might require some technical assistance to community sites to learn to take advantage of local opportunities. It might also be enhanced by technical assistance to states to develop some of these options, such as Medicaid state plan amendments (SPAs) using Section 1915(i), use of FQHCs, or use of managed care contracts with capitated financing and/or flexible benefits options.

These lessons would best generalize to sites that also have a small number of participants and would like to add first-episode clients to existing staff caseloads. Some RAISE NAVIGATE sites have a small number of early psychosis patients (fewer than ten), and the small numbers makes it possible to cross-subsidize the care of these participants from a variety of funding sources. This tactic would work for other sites that admitted a small number of clients but would be more difficult for sites that had more clients and wished to form a specific team to serve primarily first-episode clients, primarily because of the start-up costs and the costs of caring for a large number of participants with limited resources or insurance. This will change to some extent with full implementation of the ACA, although not all NAVIGATE services will be covered in exchange insurance plans (e.g., supported employment) nor in some state Medicaid plans.

The provisions of the ACA already in place have assisted individuals experiencing a first episode of psychosis by permitting some to remain on parents' insurance plans until age 26 years and not lose eligibility for private insurance because of a pre-existing condition. The ACA Medicaid expansion will also provide coverage for many individuals who no longer have to wait until they qualify for SSI before becoming eligible for Medicaid. It is particularly important for promoting recovery from a psychotic illness to provide the types of intensive therapies more often available through Medicaid early in the progression of these diseases in light of some indications of lasting ill effects of these conditions and expected positive effects of early intervention.

Some policy lessons:

  • The sites have been very creative in using available financial resources above-and-beyond what is provided by the NIMH contract for supported employment. (Each of the RAISE sites receives funds from the NIMH RAISE contract to support five hours of time per week for an employment specialist.)

  • Sites were encouraged to file claims with public and private health insurance in cases where a participant had such coverage and when the service was covered by the insurance plan, as the site might ordinarily do for their clients who are not part of RAISE. Of course, some of the participants have no insurance, and some of the key services are not covered by insurance or only partially covered, such as supported employment and supported education, as well as case management and non-face-to-face meetings of staff team members.

  • Medicaid is the health insurance financing mechanism that is most likely to cover RAISE NAVIGATE services. However, there is considerable variation from state-to-state in terms of behavioral health benefits. Furthermore, many of the participants would not currently qualify for Medicaid unless they were low-income parents themselves, dependent children in low-income families, or disabled -- or the state offers a state-only Medicaid program for individuals who are "medically indigent". Most individuals who qualify for first-episode services are too early in the course of their psychotic illness and thus lack the substantial functional impairments necessary to qualify for SSI (and thus Medicaid) on the basis of disability, unless they have impairments other than psychosis that would disable them.

  • The Medicaid expansion of the ACA will change that eligibility limitation dramatically. Many individuals with first episode of psychosis, who are not disabled, will be able to qualify for Medicaid without qualifying for SSI. Medicaid has a benefit package in many states that is more likely to cover relevant behavioral health services when compared with typical insurance plans. The new expansion population will not necessarily receive the regular Medicaid benefits since states can base the benefit package on various benchmarks including the largest health maintenance organization and state employee benefits. However, some states may opt to offer the regular Medicaid benefits to the expansion population for administrative simplicity and some of the individuals in the expansion group may qualify for regular Medicaid as individuals with disabilities or special needs. In addition, the Centers for Medicare and Medicaid Services has indicated that states can develop special benefit packages for targeted groups among the expansion population. This points to continued need for state, local and/or federal Substance Abuse and Mental Health Services Administration block grant funds to cover early intervention services. The ACA also permits states to include early intervention services, such as case management, ACT, and psychosocial rehabilitation, under the so-called Medicaid 1915(i) provisions, which do not require a waiver and instead may be established with a Medicaid SPA. The 1915(i) benefits can also be targeted to specific subpopulations (e.g., those with first-episode psychosis and/or the expansion population). An important objective of treatment and services in first-episode psychosis is to prevent disability, and disability status under the SSI program will no longer be required to become eligible for Medicaid. This is particularly important for promoting recovery from a psychotic illness by encouraging affected individuals to participate in supported employment and work and not to apply for SSI prematurely, which might discourage a working and productive life.

  • The ACA has been helpful already in that some of the participants are able to pay for some services by remaining on their parents' health insurance up to age 26. They also will not be disqualified from obtaining private insurance due to a pre-existing condition, which happened frequently to individuals with a history of psychosis before the ACA.

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