The NYSPA Report – Medicaid, Behavioral Healthcare, and the 2011 NYS Budget: Taking Stock

There can be no question that 2011 has been a tough budget year all around, including in New York State. The end of the legislative session provides an opportune time to take stock and see where we are. When our new governor, Andrew Cuomo, took office in January, New York State was facing a $10.5 billion short fall. Cuts were inevitable and the governor and legislature had to look to Medicaid, education, corrections and state workers’ salaries and pensions. In order to balance the budget, the governor and legislators had to turn to these sectors as the ones where the state’s biggest expenditures were to be found. By mid-April an on-time budget had been passed which included a 2-year Medicaid budget incorporating caps on that program’s global expenditure. Inpatient psychiatric costs were targeted and outpatient mental health clinic visit thresholds were established which incorporated decreased payments for visits exceeding those limits. Certainly, these changes were not what advocates for persons with mental illness wanted.

However, as with so many things in life, in order to know how one is doing one must view one’s position relative to others. From that perspective, NYS behavioral health providers and advocates must count themselves as relatively fortunate. A quick glance around the nation makes clear that due to the fiscal consequences of the recession, Medicaid, a large and rapidly growing part of most states’ expenditures, is under assault at state as well as at the federal level.

A brief tour of the states highlights why New Yorkers should feel relatively sanguine about how Medicaid has been dealt with in our state. Across the country governors from liberals such as Jerry Brown of California and Deval Patrick of Massachusetts to conservatives such as Jan Brewer of Arizona and Rick Scott of Florida are resorting to a wide array of approaches in their efforts to significantly reduce their state’s Medicaid budgets. Their strategies include capping Medicaid enrollment, taxing ‘unhealthy’ behaviors, rolling back reimbursement rates to levels below those which already discourage provider participation, eliminating non required services such as dental, vision, podiatric, and hospice, targeting women’s reproductive services, capping numbers of doctor visits, raising enrollee co-payments, and hastily enrolling eligibles into managed care plans in order to cap costs to the state. The above cited states are only a few of the many worthy of notice in their attack on Medicaid.

To some extent the current attacks on Medicaid has to do with the sun setting on July 1, 2011 of the 2-year, $90 billion dollar federal subsidy of Medicaid costs. As a result of that reduction as well as a political “ideological” antipathy to the program as currently constituted, 29 Republicans governors wrote a letter requesting radical changes to Medicaid which included their call for use of payment methodologies such as ‘block grants’ with the goal of capping state expenditures. The attacks on Medicaid seem especially problematic in view of recently published research by the National Bureau of Economic Research documenting the multidimensional benefits which accrue to enrollees in the areas of health, outlook, and their financial stability. On the other side, Senator Jay Rockefeller and 36 senate colleagues have written to the President commending him for his opposition to arbitrary “block grants” which would undermine the “fundamental guarantee of Mediciad coverage” to the program’s 68 million beneficiaries. The Obama administration is also pushing back by trying to maintain access by proposing rules which would make it more difficult for states to reduce reimbursement to doctors and hospitals by fulfilling the program’s mandate for access to care comparable to others. Unfortunately, it has been reported that the administration too may be willing to entertain steep reductions in funding for Medicaid as part of the negotiations related to raising the nation’s debt ceiling.

At this time, it is impossible to know how things will work out, especially as they are playing out against the multiyear phase in of the ‘Patient Protection and Affordable Care Act.’ However, for New Yorkers concerned about behavioral healthcare it seems that we are fortunate that our leaders approached their task thoughtfully and with balance. Certainly serious ‘hits’ have occurred, such as reduction in payments to institutions which treat a ‘disproportionate’ share of uninsured patients, reimbursement cuts which have led to the closing of many Continuing Day Treatment (CDT) programs and perhaps dooming those remaining, the creation of preferred drug lists for psychotropic medications and the ending of “physician prevails” in prescribing, continued reductions of numbers of beds in the state psychiatric centers, and payment thresholds for clinic level of care.

While we would have hoped for less severe reductions to CDT programs which for many fragile persons with serious and persistent mental illness (SPMI) represent a modern form of ‘asylum’ and for a continuation of “provider prevails” in prescribing in order to better protect our patients, from a ‘macro’ perspective, we appreciate that there will be no enrollment limitations and most core services have been reasonably preserved. Even where thresholds have been initiated, regulators have been able to preserve and extend access to services by counting multiple clinic visits on a given day as a single encounter for purposes of reaching threshold trigger points.

Indeed, it is possible that some of the items of concern in the 2011 budget may be revisited next year, such as the loss of the “provider prevails” requirement for prescribing within the Medicaid formulary. Furthermore, a 2-year transition has been established prior to the time when persons currently insured under the existing Medicaid fee for service arrangements will be mandated into joining managed care arrangements. The effort to create a more seamless system of care within regional behavioral networks while avoiding the depredations which have occurred too frequently when persons with SPMI have been forced into managed care plans will be overseen by the Behavioral Medicaid Redesign Taskforce. That group’s members represent a broad array of stakeholders from advocacy groups for persons with SPMI, their families, and provider organizations. Other interested parties, such as NYSPA, will also be watching the process closely and working to improve its outcome. It is the resort to a public process which will play out over time, rather than one which is rushed, secretive, and radical, which gives interested New Yorkers hope that the end result will be one that reasonably serves both those receiving and those providing services in our state. Advocates of all stripes will also need to closely monitor and vigorously advocate at the federal level to avoid draconian reductions which would inevitably adversely limit the preservation of adequate services in New York and other states.

Dr. Perlman is the Director of the Department of Psychiatry at Saint Joseph’s Medical Center, Yonkers, New York. He is the Legislative Chair and a Past President of the New York State Psychiatric Association. He is a past Chair, New York State Mental Health Services Council.

The NYSPA report was received on July 18, 2011. Dr. Perlman wants readers to know that there may be changes at the federal level as part of the efforts to raise the national debt ceiling which may significantly impact the picture he has presented.

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