Using Medicaid to Support Working Age Adults with Serious Mental Illnesses in the Community: A Handbook. Purpose and Organization of the Handbook


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.

Preparation of the Handbook

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.

Organization of the Handbook

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.

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