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Medicaid's mental health emergency

A private psychiatric hospital in Washington says its participation in a new federal demonstration project already is helping alleviate the burden of the most acutely mentally ill on emergency departments in the nation's capital.

Since July 2012, the Psychiatric Institute of Washington has stabilized and treated 150 patients with acutely chronic and serious mental health conditions under the Medicaid Emergency Psychiatric Demonstration project. Roughly two-thirds of these patients came from local emergency departments. By responding quickly to their needs, “we have been very helpful to those organizations and helping them unclog their emergency rooms,” said Howard Hoffman, MD, the institute's executive medical director. The hospital stabilizes, evaluates and treats these patients either through therapy or medication, and then provides them with aftercare programs when they're discharged.

The type of care provided by the institute is not new. What is new under this demo is that Medicaid, which previously had not covered care through private, freestanding psychiatric facilities, now is paying the bills.

The initiative, which was authorized by the Affordable Care Act, is gaining steam at a timely moment. Mental health policy issues have gained the attention of lawmakers and the public in the wake of recent shootings, including the Sandy Hook Elementary School massacre in Newtown, Conn., in which psychiatric problems were suspected. “We should be able to talk as a society about mental illness,” Health and Human Services Secretary Kathleen Sebelius said during the American Medical Association National Advocacy Conference in February in Washington.

With this issue prominent on the policy radar, the Obama administration has taken several recent steps to strengthen mental health services, such as moving to finalize regulations of the Mental Health Parity and Addiction Equity Act of 2008, and clarifying in a letter to state health officials the scope of mental health services that Medicaid plans should cover. In her address to the AMA conference, Sebelius discussed another initiative with Education Secretary Arne Duncan that would involve the community in promoting emotional health, and she urged physicians to get involved.

For some low-income and disabled Medicaid beneficiaries with the most acute psychiatric needs, pervasive holes exist in the Medicaid system and have kept needed care out of their reach, said Mark Covall, president and CEO of the National Assn. of Psychiatric Health Systems.

Medicaid is the single-largest payer for mental health services. Yet “there is an access issue with respect to Medicaid, so even though on paper there may be benefits, actually finding clinicians to deliver the services is difficult,” Covall said. As a result, many of these acutely ill patients end up in emergency departments. “They may not be regularly seeing a psychiatrist or other type of professional medical person, and their illness starts getting worse and exacerbates, and then they go into crisis and then they have to go to the ED,” he said.

Hospitals are required to stabilize these patients under provisions of the Emergency Medical Treatment and Labor Act. But many don't have the resources to care for them adequately. “Boarding these patients in the ED just adds to their stress and can jeopardize safety of other patients and staff,” said Barbara Tomar, federal affairs director with the American College of Emergency Physicians. Coordination between acute care hospitals and longer-term rehabilitation services also has been ineffective, Covall said.

Further exacerbating the problem is the fact that Medicaid does not pay for non-elderly adults to receive inpatient care at freestanding psychiatric institutions, such as private psychiatric hospitals and state mental hospitals. This is known as the “institutions for mental disease” or IMD exclusion.

“If they go to these facilities, Medicaid doesn't pay for them if they're between the ages of 21 to 64. So what we've seen over the years is a decline in number of inpatient psychiatric beds across all the inpatient hospital settings,” including state mental hospitals and psychiatric units within general hospitals, Covall said. The inpatient capacity has shrunk at the same time that demand is increasing.

It's also important to note that the mental health parity law doesn't broadly apply to all Medicaid coverage, he said.

The Medicaid Emergency Psychiatric Demonstration, or IMD demo, aims to test whether the care of these acutely mentally ill patients would improve by paying hospitals that haven't been receiving Medicaid dollars to treat them. At least $75 million in federal matching funds were made available to private psychiatric hospitals in 11 states and the District of Columbia for the purposes of conducting this three-year demo. The demo placed a specific focus on private facilities because they are required to provide around-the-clock emergency care but also are subject to the IMD exclusion.

Covall said the money was distributed based on the states' proposals and their assumptions regarding the demand for these services. The Centers for Medicare & Medicaid Services made a certain allotment for each state.

“CMS will be monitoring in real time the actual payouts per state and can redirect funds from one state to another if one state is above their allotment and another state is below their allotment,” he said. Participating hospitals had to have 17 or more inpatient beds and the ability to provide inpatient care to adults with acute psychiatric needs. The states' role in the project is to evaluate whether these special payments to the psychiatric hospitals help lower Medicaid costs while improving care for patients.

The demo began in the summer of 2012, with a few of the sites starting their work in October or November, Covall said. Of the 28 facilities participating in the demo, 19 are NAPHS members. “There were some wrinkles as it unfolded, which you would expect, but those are being addressed very effectively, and we're confident that the demo can be very effective in determining whether adding those facilities would improve the care system overall for these facilities,” he said.

One of the participating states is Maine, which is partnering with two private psychiatric hospitals, Spring Harbor Hospital in Portland and Acadia Hospital in Bangor. Both are working with their area emergency departments to treat patients with acute mental health issues, to stabilize them and then work with community health care professionals so the patients can transition smoothly to the outside world.

The patients first are identified by health professionals in the ED, said Joyce Cotton, DNP, an advanced practice registered nurse and Spring Harbor's chief clinical and nursing officer. In addition to the requirement that the adults qualify for the state's Medicaid program, MaineCare, the diagnostic criteria must include that they pose a danger to themselves or others. “They could be suicidal, homicidal or so psychotic they may be putting themselves in danger. Maybe they're not managing diabetes well, and their acute mental illness is getting in the way of taking care of themselves,” Cotton said.

Under the terms of the demo, the facility must develop a plan to stabilize the patient by the third day of hospitalization, although there is no time limit on the days that actually are required to achieve stabilization. Cotton said this gives Spring Harbor three days to try to work with the patient under the IMD grant. Appropriate treatment may involve medication, therapy or adjusting current medication dosages.

“If they need to stay longer, we would just keep them here in our hospital until they're ready for discharge,” she said. “And most need to stay longer than the three days.”

Various areas of the medical community have reacted with cautious optimism to the nascent project. The IMD exclusion has never made much sense, said Bob Cabaj, MD, a practicing psychiatrist and chair of the American Psychiatric Assn. Council on Advocacy and Government Relations. “One of the hopes is this would show that there is some cost savings and real benefits to our clients, and that might lead to a lifting of IMD exclusion over time.”

Emergency physicians also remain positive about the demo, ACEP's Tomar said. “Albeit it's on a very small scale, but our hope is that the problem gets congressional recognition — highlighted now due to the mental health focus as part of gun violence and the recent mass shootings — and that the law will be changed to allow Medicaid payment to private psych hospitals everywhere.”

American Medical Association policy has supported psychiatrist-supervised mental health care homes, while encouraging states to place more of an emphasis on community-based outpatient psychiatric services. The Association plans to monitor the IMD demo's progress to see if it's consistent with AMA policy on treating substance abuse disorders and improving access to psychiatric care.

Some physicians not involved in the demo project suggested that more was needed on the front end of the clinical process to prevent mental health-related hospitalizations. While he applauded the demo's goals, Reid B. Blackwelder, MD, said: “A better solution is not to let this happen so much in the first place if we can. Prevention and emphasizing the role of primary care is really the way to alter the course of these problems.” He is president-elect of the American Academy of Family Physicians from Kingsport, Tenn.

Mental health problems rarely arise suddenly, Dr. Blackwelder said. Schizophrenia, for example, usually starts presenting itself during late adolescence or early adulthood, a situation that a family physician would be able to detect, provided that the doctor has been following the patient throughout his or her life, he said.

The ACA directs the HHS secretary at the completion of the demonstration to report to Congress and recommend whether the project should be expanded nationally. “I am very confident that this will show a very positive impact in the areas we want to try to address. Over the next several years, I think that states and the federal government will make this more of a national policy and allow these freestanding psychiatric hospitals to get paid for taking care of this population,” Covall said.

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