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Mental health/substance abuse treatment mergers continue, with mixed feelings on substance abuse side

October 2, 2013
by Alison Knopf
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Mergers are always touted for their hoped-for cost savings and improvements in patient care and recent behavioral health mergers are no exception. Nationwide, mergers between state-level mental health and substance abuse administrations, as well as mergers between treatment providers and trade groups are changing the landscape of the field.

But the process isn’t always easy: culture clashes and turf battles are common.

A few notable mergers preceded the enactment of the Affordable Care Act (ACA), which has been a key driver of mergers and consolidations throughout healthcare. Since 2008, the federal Substance Abuse and Mental Health Services Administration (SAMHSA) has placed increasing focus on the integration of mental health and substance abuse treatment, settling on “behavioral” healthcare as the name for both. Under the rubric of co-occurring disorders, SAMHSA has encouraged treatment providers, whether they are licensed to treat mental illness or substance abuse, to adopt “no wrong door” policies, pledges to assist any patient who seeks care for any behavioral disorder.

Integration grants

In 2010, SAMHSA in coordination with the Health Resources and Services Administration, awarded a four-year, $5.3 million grant to the National Council for Behavioral Health to establish a national assistance center to integrate primary care, substance abuse, and mental health services. The assistance center was designed to help 56 treatment organizations that received integration grants from SAMHSA, as well as some of the HRSA-funded Federally Qualified Health Centers (FQHCs), which provide primary care services. One key integration strategy involves placing substance abuse and mental illness treatment within the FQHC.

In 2011, SAMHSA began a full-court press to focus on “behavioral health.” And, although a statutory change would be required by Congress before it could happen, the idea of “blending” the federal block grants for substance abuse and mental health continued to swirl, both in the offices of state directors of those funds and at SAMHSA. The substance abuse constituency was concerned, because it stood to lose the most – the substance abuse block grant is three times bigger than the mental health block grant, a reflection of the fact that publicly funded mental health services are largely covered by Medicaid, while substance abuse treatment services aren’t. Nevertheless, a flurry of mergers ensued, some of which are described below.

2011 state mergers

Louisiana’s Department of Health and Hospitals (DHH) merged the Office for Addictive Disorders with the Office of Mental Health, creating the new Office of Behavioral Health, which serves as a third-door administrator. In announcing the consolidation, DHH Secretary Bruce D. Greenstein said there is now a “no wrong door approach to serve individuals with mental illness and addictive disorders.”

Also in 2011, the New Jersey Division of Addiction Services (DAS) merged with the state’s Division of Mental Health Services (DMHS). For both Louisiana and New Jersey, the state goals were improving patient care and at the same time saving money.

That was also the year that New York Gov. Andrew M. Cuomo named the members of the Spending and Government Efficiency (SAGE) Commission that is redesigning the state’s government. It is not known yet whether there will be a merger between the Office of Mental Health (OMH) and the Office of Alcoholism and Substance Abuse Services (OASAS), but already there are huge changes in payment, with managed care for substance abuse treatment becoming a reality. The process has been transparent, according to providers and state officials, who have authorized the Office of Mental Health (OMH) and OASAS to contract with managed behavioral healthcare organizations.

South Dakota in 2011 abolished the former Division of Alcohol and Drug Abuse, and instead left mental health officials at the helm of the Department of Social Services, which became the home for both the mental health and drug alcohol divisions. The reorganization, which was announced by executive order of the governor, left mental health officials largely in place, placing the brunt of changes on the substance abuse treatment officials. Many demotions, firings, and resignations of key substance abuse treatment officials in the state.

2012 mergers

Last year, more states merged their mental health and substance abuse departments.

A merger of the Ohio Department of Alcohol and Drug Addiction Services (ODADAS) and the Ohio Department of Mental Health (ODMH) was proposed as a way to reduce costs.

In Maryland, a merger of Mental Hygiene Administration (MHA) and the Alcohol and Drug Abuse Administration (ADAA) to form a new Behavioral Health Administration was announced.

In Louisiana, where a merger had already taken place, the Louisiana Behavioral Health Partnership was formed. This program, managed by Magellan, administers funds from the Louisiana Office of Behavioral Health. The purpose is to reduce inpatient treatment and increase outpatient treatment.

In California, all publicly funded mental health and substance abuse treatment services were consolidated. The state’s 58 counties each became responsible for administering the funds. The state’s Department of Alcohol and Drug Programs was eliminated.

Trickle-down mergers

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