Providers in New Jersey are optimistic about state senate bill S2180, which would no longer allow managed care organizations to apply utilization management to behavioral healthcare services. It’s an extreme measure. If passed, it would be the first statute to require insurers to cover treatment without prior approval or fail-first protocols.
In other words, if a licensed provider recommends five weeks of residential treatment, for example, the patient’s insurance company would automatically be obligated to cover it out of medical necessity.
As might be expected, the proposal has promise, but there could be far more aspects working against it. The bill is broad, which tends to be troublesome in policymaking, and right now, it doesn’t have any cost-saving offsets, which could ultimately prevent S2180 from progressing any further.
But the proposed policy is in the early phases, so all these hurdles can potentially be addressed in future iterations.
What advocates might have going for them now is strong bipartisan support in New Jersey for solutions with the potential to tackle the state’s growing opioid epidemic. Governor Chris Christie, a Republican, has been supportive of the recovery community and has indicated he wants to see an increase in the number of treatment beds in the state.
New Jersey has a Democrat-controlled state legislature, and the political will to make improvements in behavioral health access could be there as well. Lawmakers are increasingly hearing concerns from constituents whose loved ones are dying from substance use disorders at an alarming rate. Heroin and opioid overdoses claimed the lives of 750 people in New Jersey last year.
Bill S2180 recently passed the New Jersey Senate Commerce Committee with a vote of 4-to-2 and has now moved on to a budget committee that must attach savings numbers to the proposal.
Seabrook House Vice President of Business Operations Matthew Wolf, who attended the Commerce Committee hearing on S2180, says the entire debate was dominated by the discussion of cost. Wolf says he was struck by testimony from stakeholders in the healthcare industry who highlighted the price of treatment rather than the fact that patients are dying because they aren’t getting the help they need to recover from addiction.
That kind of response only increases the stigma around mental health and substance-use disorders, he says.
“It was clear that this is not viewed as an illness,” Wolf says. “It’s as if it’s a behavioral failure or a moral failure, and that behavioral health providers can’t be trusted.”
Observers are also comparing S2180 to Pennsylvania’s Act 106 of 1989. However, Act 106 is distinctly different in that it quantifies minimum benefits, such as seven days of detox treatment per year, for example, and also limits who qualifies as a prescriber. By comparison, New Jersey’s S2180 is much broader, essentially leaving treatment benefits open-ended. In fact, one managed care organization at the hearing called the bill “a blank check” for providers, according to Wolf.
Payers say they need prior authorization and fail-first strategies to drive providers toward the low-cost treatment options, while the providers say they need to remove barriers to deliver the most effective care possible. It’s a polarizing debate.
However, Wolf says there is a way to meet in the middle even under S2180’s broad coverage policy.
“Allow providers to guide treatment, but as we already do now, set up a simple audit system where any insurer can come in and audit any record at any time to make sure that facilities are doing best practices,” he says. “That would be a wonderful middle ground that would ensure compliance with National Committee for Quality Assurance. That’s something that facilities have been used to for many years.”
And the advent of EHRs has only made the audit task easier, he says.
Ultimately, Wolf is optimistic that S2180 will become a statute in New Jersey, but he says, it will take some time to get there.
“It’s not even close to being law yet,” he says.