About one third of clients being served by behavioral health care are “dual eligibles,” people who are eligible for Medicaid due to low incomes, and Medicare, primarily due to disability, says Chuck Ingoglia, senior vice president for public policy with the National Council for Behavioral Health. However, these numerous clients account for just 10 percent of overall behavioral health provider revenue. Why? The reasons have to do with differences between Medicaid and Medicare plan benefits, as well as distinctions in terms of which providers can submit claims to these programs.
When Medicare was created in 1965, it was modeled on the predominant insurance model, which was a Blue Cross/Blue Shield commercial (albeit nonprofit) model. This model covers medication management, individual and some group therapy, and inpatient psychiatric hospitalization – and that’s all. Providers who can file claims are limited to physicians, clinical psychologists, and clinical social workers.
Medicaid, on the other hand, has a fairly broad mental health benefit in most states, and in some states also has an addiction benefit. It covers much more than Medicare for behavioral healthcare, including case management, psychiatric rehabilitation, and sometimes services by peers. In addition, each state Medicaid program determines what providers can be reimbursed. “In most cases the list of individuals is broad, or Medicaid credentials organizations like community mental health centers to provide the care,” says Ingoglia. However, Medicaid also has the IMD (Institutions for Mental Diseases) exclusion, which won’t allow for paying for patients in institutions with more than 16 beds.
Medicaid is clearly the more favorable payer from the perspective of community mental health centers. But the rule is that Medicaid is a payer of last resort, which means providers have to bill Medicare first, and get a denial, before they can bill Medicaid.
States interpret this rule differently. Sometimes there’s an agreement that if a service is not covered by Medicare, and the provider is not payable by Medicare, a claim can go directly to Medicaid. But not always.
There is a chance that this situation could be changed through implementation of the Affordable Care Act, says Ingoglia. “There’s been a long-time policy concern about the need to coordinate benefits between Medicaid and Medicare,” said Ingoglia. The rationale for the creation of the duals office was some kind of resolution of the disjointed benefits for both. But there is a long way to go toward reconciliation.
Health care reform is changing the scenario, but the cost to providers is the increasing power of managed care, depending on the state. Under the ACA, there is a plan to incentivize states to coordinate both the benefit and the payment for services for dual-eligibles, says Ingoglia. This could occur in two possible ways: one is through a capitated arrangement, and the second is through managed fee for service. Either way, expect to see a greater involvement of managed care organizations in states that participate in demonstrations (pilots) to serve dual-eligibles.
Most people with behavioral health conditions who are eligible for Medicare are young people with serious mental illness – a disability – and also qualify for Medicaid because they’re poor, says Ingoglia.
Generally, people who are disabled need access to the medications which are paid for by Medicare Part D for dual eligibles, but they also need medication management, case management, and other services which are paid for by Medicaid.
A pilot project under the ACA has the potential to shift the responsibility for how to manage care, with the burden moving to the provider. Many states that are participating are bringing in managed care vendors. Currently, providers are not losing money by treating dual eligibles, but as different managed care organizations become involved, the dynamic could change, says Ingoglia. If a provider is operating in a capitated environment, depending on how many services the state includes in the Medicaid benefit, other services could be squeezed – even if those services are included in the benefit too, he said. Does the capitation (per member) fee include long-term care and pharmaceuticals, for example? Let’s say a provider gets a set fee per member per month – and the provider has to assume the risk of care for everyone. That’s a lot more difficult, in terms of reimbursement, than just getting paid for every service the provider renders (fee for service).
And patient advocates have expressed concern about the appeals and grievance process when it comes to managed care. Medicaid and Medicare, both government programs, have certain transparency requirements which are a step removed when a commercial insurance company is the intermediary – even if taxpayers are still paying the bill. What providers – and patient advocates – would like to see is more patient protections when insurance companies deny claims or require utilization review.