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How will heathcare reform impact your behavioral health organization?

March 23, 2010
by Terry L. Stawar, Ed.D.
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Starting in 2014, the newly passed healthcare law will extend Medicaid benefits to people who make 133 percent of the federal poverty level. At present my state provides Medicaid to uninsured adults who are at approximately 23 percent of the federal poverty level ($5,071 for a family of four).

This change should make a huge dent in the 32 million uninsured Americans and reduce the number of patients that community behavioral health organizations see, who are self-pays.

Currently our center collects about 30 cents on every dollar billed to self-pays, while the Medicaid blended collection rate is approximately 64 cents on the dollar.

The state wide charity care ratio for CMHCs is about 16% and this, in theory, would help offset some of these millions of dollars in uncompensated care.

Tragically as the federal Medicaid eligibility criteria widens, our state has proposed a state plan amendment to CMS that would greatly restrict patient eligibility, limit service provision, and lower payment rates to such an extent that it undermines the whole business model upon which the CMHC infrastructure is based.

Having been burned in a federal audit a few years ago, the state decided, rather than simply policing the abusing entities better, to created an audit-proof Rube Goldberg bureaucratic nightmare. The lipstick on his pig is recovery model language and promises of access to clubhouse services, as it undermines decades of work building an accessible statewide system of care.

These changes ironically threaten to undermine any benefits of healthcare reform and undo any financial help from the stimulus package’s Federal Medicaid Assistance Program (FMAP).

Of course that’s only my opinion.

What is the perspective on the healthcare reform bill elsewhere?


Terry Stawar

President/CEO (LifeSpring, Inc.)

Terry Stawar


Terry L. Stawar, EdD, is President and CEO of LifeSpring Health Systems, a community behavioral...

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