Aug 25, 2013

No Medicaid Health Homes for Ohio

Ohio is backing off plans to add primary care clinics to its network of community mental health centers. The plan for so-called Medicaid Health Homes failed because it adds unrecoverable expense to a system where every single dollar is already tied up.

This should not come as much of a surprise for people familiar with Ohio Medicaid payment issues. I’ve served on the governing board of a neighborhood health clinic, a Federally Qualified Health Center (FQHC). Even with the enhanced payments we received under this program, we could never find a way to add mental health or addiction treatment to our standard menu of primary care services. I attended workshops and seminars to learn how to parse primary care organization billing codes, but what we found is that the system won’t support what actually works. When a person comes in for a primary care visit, the clinic can't bill for a mental health visit the same day. 

Ohio mental health organizations have a different set of technical problems. Years ago, the state obtained a federal waiver that carved out mental health from mainstream Medicaid. This made Ohio mental health and addiction services operate on a pre-allocated cost-reimbursement basis, not fee-for-service. Every dollar within an agency budget is tagged for service delivery based on service capacity estimates. The main management dynamic is utilization of the Medicaid budget allocation. Unspent dollars are reclaimed through an audit process, so there is no margin left over for success or experimentation. Because every dollar within an agency is already allocated, every new service requires new funding.

This provider funding dynamic prizes stability, not innovation. Competition is suppressed. Ohio Medicaid mental health contracts are no-bid contracts. In many communities there’s an undercurrent of cronyism. Provider executives get cozy with local politicians and mental health board members to make sure their agencies stay in the game. Agencies that provide a service at lower cost don’t win, and new providers are frozen out.

Adding primary care to mental health agencies also requires service efficiencies the population served makes difficult to sustain. Ohio Medicaid primary care is organized around fee-for-service reimbursement based on procedural billing codes. The codes provide about enough money for each encounter if the staff ratios are figured correctly, but the medical team must keep to a fast schedule, and every patient must have Medicaid or another insurance coverage. Unfortunately, people with mental illness usually take more time to serve. This makes it impossible to maintain the brisk pace that generates enough revenue to sustain the primary care effort long-term.

Link to news report:

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