$94 Million in Overtime or Universal Access to Mental Health Care?  You Choose

Andrew Malekoff

New York Nonprofit Press - May, 2014

For three decades New York State has been systematically marginalizing middle class and working poor families who have children with serious mental health problems. This is a truth that the public is unaware of unless you have a child who is refusing to go to school, cutting herself, paralyzed by anxiety, deeply depressed or suicidal. Because mental illness is stigmatized, the reality of the State’s neglect has been obscured from view.

We continue to treat illnesses above the neck differently than those below the neck.  People with mental health problems, and their families, often feel a sense of shame and suffer in silence, while people with physical health problems evoke the sympathy, support and comfort of others.

 

In 1991, New York State implemented a plan to use Medicaid dollars to fund outpatient community-based mental health services. That approach, also known as Medicaiding-the-system, is gone.

Medicaiding-the-system was a combination of a base Medicaid rate applied for each outpatient community-based mental health clinic visit for Medicaid recipients only and supplemental dollars paid on top of each base payment to subsidize non-Medicaid consumers (known as Comprehensive Outpatient Funding or COPS). This approach to support community-based agencies was developed to replace local assistance or deficit-financing.

Local assistance was a simple and sensible public-private financing partnership. The partners were the State and County governments (through government funding), mental health consumers (through third party and fee-for-service revenue) and the local community (through fund-raising that was a part of the local assistance government contract). Local assistance funding insured that all stakeholders chipped in their fair share to support an essential community-based service.

In 2009, New York State announced that the Medicaid-bankrolled COPS approach of financing community-based clinics had the inadvertent affect of propping up commercial insurers who were paying substandard rates. Having uncovered that festering wound, OMH got to work on creating a new financing plan that they referred to as clinic restructuring or clinic reform.

The clinic reform plan raised the Medicaid-base rate, added new rates for previously unfunded or underfunded services (known as Ambulatory Patient Groups or APGs), and phased out the supplemental COPS Medicaid rate over a four-year-period that recently came to an end. The Medicaid base-rate and APGs now apply only to those families who have straight Medicaid and Medicaid managed care insurance.

In my discussions with New York State officials about the devastating consequences of the clinic reform plan for middle class and working poor families who do not have Medicaid insurance, I was advised that community-based mental health centers must re-negotiate rates with commercial insurers. That is nothing new. It is common practice. The state officials advised me that if the commercial insurers do not raise their rates to sufficient levels that will help to cover the cost of the services provided, then we should terminate our contracts with them.

Community-based providers routinely re-negotiate rates with the managed-care companies which represent private health insurers. However, they rarely agree to rates that come close to covering the cost of service. As one managed-care representative told me, “C’mon, we’re hurting too.” And, he said it with a straight face, despite record profits. State officials told me that community-based agencies like North Shore Child and Family Guidance Center, a specialty children’s outpatient clinic where I have worked for 37 years, should change their payor-mix. Payor-mix is a euphemism for terminating contracts with private health insurers and, consequently, denying service to thousands of children who need us.

When I pressed him on this, his response was that “the marketplace will take care of it,” referring to private practitioners. But mental health providers know that private child psychiatrists and other private behavioral health practitioners will not accept substandard rates or take on the labor-intensive work required to address the needs of children with serious mental illness (e.g. collateral contacts, crisis intervention, etc.) Nevertheless, commercial health insurers must by license demonstrate “network adequacy.”

Network adequacy refers to a health plan's ability to deliver the benefits promised by providing reasonable access to a sufficient number of in-network primary care and specialty physicians, as well as all health care services included under the terms of the contract. The truth is that many health insurers do not have adequate mental health care networks despite the voluminous number of names on their rosters. But tell me, really, what private citizen or community-based nonprofit can be successful in advocating for the revocation of licenses of private health insurers with the millions of lobbying dollars backing them up? Good luck!

The truth is that for many families, when it comes to seeking mental health care for their children, the process of finding help is a shell game aided and abetted by New York State. New York State claims that they cannot provide additional local assistance funding to help to subsidize universal mental health care in community-based clinics, which must also raise funds by contract, to support these vital services. Consequently many clinics are turning away all but Medicaid applicants for their services. But, is it true that New York State cannot offer local assistance support?

In a recent report issued by NYS Comptroller Thomas DiNapoli, it was revealed that the New York State Office of Mental Health runs up annual overtime expenses of $94 million a year. And, this is happening at the same time that the state is footing the bill for nonprofit community-based mental health clinics to enroll in state-sponsored efficiency classes that are a part of the State Office of Mental Health’s Clinical Technical Assistance Center (CTAC) initiative.

The goal of the efficiency classes is to improve the bottom-line by implementing centralized scheduling, open access and collaborative documentation. Fair enough. However, CTAC trainers have joined the state officials’ chorus about marginalizing the middle class and working poor. One CTAC trainer told me, during a recent webinar when I raised the question about the discrepancy in reimbursement rates, “You must change your payor-mix.”

Can you imagine how much savings there would be if OMH took the efficiency classes and were just a little bit more efficient with their use of overtime; and, how much of that savings could go towards supporting universal community-based outpatient mental health care for children?

And, keep in mind that that OMH’s excessive annual overtime expenditures presents New York taxpayers with a pay now and pay later scenario. We pay today for overtime and we will pay later for elevated pension benefits for State employees, a number of whom have left the Office of Mental Health to take on lucrative administrative positions with large conglomerates that state officials encourage smaller clinics to “merge with”; a euphemism for “be taken over by”.

To sum up, the State claims that there is no additional local assistance funding for community-based clinics to provide universal mental health care; clinics are then “encouraged” to take State-funded efficiency classes to reduce their cost of service by dropping underinsured middle class and working poor clients; The New York State Office of Mental Health generates overtime expenses of $94 million per year (plus increased employee pension benefits in perpetuity, at taxpayer expense); private health insurance companies present only the illusion of network adequacy and hide behind lobbying payoffs; community-based mental health clinics are closing or turning away all but Medicaid applicants or are being taken over by conglomerates administered by ex-OMH officials who are collecting overtime-time inflated State pensions on top of lucrative salaries from the takeover institutions; and kids and families who don’t have Medicaid insurance are being turned away from community-based care.

If New York State will not support essential community-based mental health services for the most vulnerable members of our communities – our children – then who will?

 

Andrew Malekoff, executive director and CEO of North Shore Child and Family Guidance Center in Roslyn Heights, NY. amalekoff@northshorechildguidance.org