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MEDICAID RATE CHANGES COULD LEAVE ADDICTS, MENTALLY ILL WITHOUT CONSISTENT CARE
LILO H. STAINTON | APRIL 29, 2016
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Many programs should see generous boosts in funding, but others -- like day programs for psychiatric outpatients -- could see cuts

When Gov. Chris Christie announced in January that he would invest an extra $127 million in the Medicaid program to boost reimbursement rates for behavioral healthcare, advocates welcomed the news for its potential to expand treatment options for poor and disabled patients in New Jersey.

But details released by state officials over the months that followed Christie’s State of the State have sparked growing concerns for organizations that provide these mental health and substance abuse-treatment to Medicaid patients.

Advocates for these caregivers said the proposed changes could result in budget and financial chaos as the state overhauls a 30-year-old payment system during the next 14 months. According to a survey of some providers, as many as 20,000 patients could be squeezed out of treatment.

The new Medicaid funding -- more than $100 million of which comes from federal sources -- is one of several efforts Christie has backed to help address the state’s soaring addiction rates. According to the Department of Human Services, which oversees Medicaid, the proposed rate changes more than double some current payments for substance-abuse treatments. They also offer first-time funding for buprenorphine, an opiate-replacement therapy that has shown tremendous success.

Proposed rates for mental-health services also reflect significant funding increases; individual therapy would be reimbursed at twice the current rate and payments for group homes and other residential facilities would also jump.

But the reimbursements proposed for some outpatient treatments, including programs for those transferring out of psychiatric facilities, would actually be reduced.

Another concern for providers is the pending transition from annual “deficit funding” contracts to fee-for-service payments. Currently, most Medicaid providers collect funds from every source possible -- county contracts, foundation grants, patient fees -- and the state will eventually make up any budget gap that remains But starting this July, it will begin shifting to a model where the state reimburses providers for specific patient services.

“The numbers just don’t add up,” said Joseph A. Masciandaro, president and CEO of CarePlus NJ, which treats some 20,000 patients a year at sites in Bergen, Passaic, Essex, and Union counties. Based on his calculations with the new rates, Masciandaro predicts CarePlus will develop a $6 million shortfall over the first six months. “This is going to be the worse disaster we’ve ever witnessed,” he said, looking back over his three-decade career.

Debra Wentz, President and CEO of the New Jersey Association of Mental Health and Addiction Agencies, said her members welcomed the infusion of new funding for behavioral healthcare. “But where the money is going and how it is impacting the different services has caused a lot of concerns.”

“We are not asking that the system doesn’t move forward,” Wentz added, “just hoping to slow it down in terms of the transition.” The association is urging state officials to extend the deficit funding so that it overlaps with the new system for a full year, in an effort to keep organizations financially whole during the implementation process.




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