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Remaking behavioral healthcare

June 1, 2010
by Brian Albright
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How five challenges of healthcare reform will shape our future

“Instead of being on the outside, we're part of the system in a way we've never been before…”

With the passage of the Patient Protection and Affordable Care Act, the U.S. Congress swept aside a nearly 80-year-old legislative logjam, fundamentally altered the insurance industry, and left providers across the healthcare spectrum scrambling to understand and respond.

“This will totally transform the way the industry functions over the course of the next several years,” says Dick Dougherty, CEO of DMA Health Strategies, a Lexington, Mass.-based consulting firm.

“Instead of being on the outside, we're part of the system in a way we've never been before,” adds Ron Manderscheid, executive director of the National Association of County Behavioral Health and Developmental Disabilities Directors (NACBHDD). “We have to adjust ourselves to that new role.”

Adjustment is a central theme for the behavioral healthcare industry, which has barely had time to adjust to the changes wrought by the long-awaited passage of the Mental Health Parity and Addiction Equity Act (MHPAEA), whose provisions were written in as baseline requirements for the newer healthcare reform legislation. Passage of healthcare reform means that MHPAEA's parity definitions will soon apply to virtually all Americans, even as Medicaid is expanded, new health insurance exchanges are established, and new coverage mandates and penalties are created for employers and individuals.

As broader reforms make behavioral healthcare “part of the system,” providers will be expected to work more closely than ever with hospitals, primary care physicians, and other medical specialists to function in the collaborative, evidence-based, prevention-focused world envisioned by reformers. And, while building their identity as a recognized (but relatively pint-sized) subspecialty in the larger medical world, behavioral health professionals will have to adapt to new, insurance-driven funding sources as the majority of states continue to slash budgets in response to major tax shortfalls resulting from the recent, deep recession.

“Behavioral health is just a little piece of the healthcare puzzle,” says Kris Ericson, executive director of the College for Behavioral Health Leadership (ACHMA). “A lot of our services will likely get wrapped into primary care and other types of organizations, and that makes people incredibly nervous. They fear there won't be enough resources for behavioral health. We have to figure out how to create partnerships and collaboration so we're making the best use of the money we have.”

Reform will mark a massive shift away from state funding and block grants, and toward private insurance and Medicaid.

“There is a sense that hope is on the horizon, but we have to be able to bail water out of the sinking system so we can make it until then,” says Chuck Ingoglia, vice president of public policy at the National Council.

The first glimmer of reform's new day is already in sight. This year, family insurance coverage has been extended to dependent adults up to age 26 while insurance exclusions for pre-existing conditions are being eliminated for children. Small businesses have access to new tax credits to help provide insurance to employees, and several states are already creating high-risk insurance pools. The District of Columbia has asked permission to expand its Medicaid program (allowed under the bill) in a move that will shift some 35,000 individuals away from a current, city-run program. Connecticut has submitted a similar plan, and a handful of other states are considering doing the same.

Challenge 1: Understand reform's impact

Many of the new law's effects on the behavioral healthcare industry are still vague-dozens of government agencies have yet to draft regulations, and many of the requirements of the bill don't kick in until 2014 or later. Industry associations are organizing educational efforts for consumers, and providers and are lining up to help influence the new regulations so that mental health and substance abuse treatment are given due consideration as reform is implemented.

“The first challenge we confront is getting accurate information out to people in the field so they can appropriately understand what national health reform is and what it is not,” says Manderscheid. “There's a high level of anxiety because we don't have information and we don't have a tactical plan. In each of these areas, we need to know what we're doing, know the pros and cons, and determine our capacities. Today, I don't think any of this has been worked on in the context of health reform.”

“A lot of our services will likely get wrapped into primary care and other types of organizations, and that makes people incredibly nervous. They fear there won't be enough resources for behavioral health…”

Challenge 2: Manage capacity and workforce expansion

When the new health insurance exchanges (HIEs) are established by states in 2014, the insurance plans offered through those exchanges will have to offer as-yet-undefined “essential health benefits,” with parity coverage of substance abuse and mental health treatment. Although there will likely be a heated debate about what exactly to include in those benefit packages (designated Platinum, Gold, Silver, and Bronze in reform legislation), more patients with behavioral healthcare needs will be utilizing private insurance, rather than grant-funded programs, for coverage of their conditions and needs.

“The vision is that assertive community treatment would be a service covered by insurance companies under health reform,” Dougherty says. “Right now, the vast majority of community treatment is at least partly funded through state grants and other sources. That's an uphill battle that's going to be fought around benefit plan design.”