More than 150,000 avoidable deaths occur each year due to mental, emotional, and behavioral health problems. This includes nearly 50,000 suicide deaths and 100,000 overdose deaths. People with chronic persistent mental illness suffer a 20-year shorter life expectancy. This country urgently needs to address how we pay for mental health services.
Medicaid is a major payer in American healthcare
There are over 80 million people enrolled in Medicaid, about a quarter of the people in the US. More than 40% of children and youth have Medicaid. The annual Medicaid budget exceeds $650 billion. Yet, the annual budget for mental health and substance use is just $60 billion (9%). As a result, Medicaid spends about $9,000 per enrollee, but just $833 per enrollee on mental, emotional, behavioral, and substance use problems. In recent years, 42% of Medicaid-paid emergency room visits involved a mental health problem or substance-use disorder.
Carve-outs for mental health and substance are common
Medicaid relies heavily on managed care to contain costs and expenses. As a result, a variety of clinical services are “carved-out,” meaning that reimbursement for physical, mental, pharmacy, diagnostic needs occurs through multiple contracts and provider types. A mental health carve-out is a way for an insurance company (in this case, a state Medicaid program) to pay a different provider or clinician for mental health care. Often the physical health care provider does not receive payment for mental healthcare and must refer patients to the carve-out provider organization. Carve-out organizations may have their own intake process, rules and regulations, and limits to availability and services.
Time to “carve in” mental, emotional, behavioral health to all health care services
While touted as a method of ensuring quality, carve-outs function to limit access. A separate organization contracts to manage the mental, emotional, behavioral health conditions for Medicaid enrollees. They promise efficiency and cost-effectiveness. In order to deliver, they efficiently limit care, and they save money.
Sometimes this is a specific mental health carve-out. For example, the primary care physician gets paid for physical healthcare. However, anything related to mental health must be referred to a different system. As a result, this gatekeeper approach separates the mind from the body, the physical from the mental, and eliminates the opportunity for truly integrated care. Too often, urban or national organizations are the contractors, and they don’t have adequate networks of clinicians in rural and underserved communities.
There are a growing number of carve-out contracts with “integrated” health systems consisting of third-party administrators, large delivery systems, and “broad-network” organizations. These new managed care contracts include all services including behavioral health.
It sounds great, because it carves mental health back into physical healthcare. However, they suffer many of the same problems as narrow carve-outs. They are fraught with inadequate clinical networks, and may not address local values, geographic distance, racial and ethnic differences, language, and culture. Integrated networks are a good start, but just not enough.
Carve-outs don’t work
Carve-outs are not working. More people are suffering. In the midst of the COVID-19 pandemic, 40% of adults report symptoms of depression or anxiety. Children and youth are suffering depression and anxiety in unprecedented numbers. Each day, headlines report more deaths of despair. Access to diagnosis and treatment has not kept pace.
It’s time to carve in mental health and substance use treatment and eliminate all carve-outs. It is time to contract directly with any qualified mental health provider. Let people get mental, emotional, behavioral healthcare wherever they can. Make access to mental health and substance use treatment a no wrong door process.
Carving in mental health and substance use treatment
Here are a few ways Medicaid could carve in mental health and substance use treatment:
- Provide payment to primary care clinicians and practices for behavioral health treatment
- Cover a primary care visit and a counseling visit at the same site on the same day
- Provide structured or “per-member-per-month” primary care payments
- These payments allow for innovative behavioral health screening, brief interventions, group visits, collaborative care, and treatments outside the typical 50-minute hour encounter
- Other approaches that these payments can cover include innovative substance use treatments like group visits, peer counselors, outreach and house calls to jails and halfway houses, and brief primary care telehealth visits
- Cover sober living arrangements
- Pay for mental, emotional, behavioral health and substance use treatment in non-traditional or non-medical settings
- For example, faith communities, 12-step programs, peer support networks
Carving in does not just mean combining the physical and mental health budgets, or that a third-party administrator manages both physical and mental health claims. To truly carve in means to expand coverage for mental, emotional, behavioral health and substance use disorders. It means pilot programs, new fee-for-service contracts, value-based payments, structured and per-member-per-month payments, and grants to practices and providers based on state and local values.
Carve in leads to more innovation, pilots, stretching the limits to get care to every corner of the state, every urban block, every frontier community. Carve in means that behavioral health and substance use treatments are the easiest care to find and receive; treatment is behind any door.
Fear of fraud should not dictate policy
Some worry about cheaters — primary care and behavioral health providers “gaming” the system. However, less than 1% of Medicaid payments are improper or involve some type of fraud. Gaming the system is just not a problem in mental health and primary care. Reading beyond the headlines can reframe our approach and remind us of our priorities. We need to prevent overdose deaths and other deaths of despair. Rampant depression and anxiety should not go untreated.
These are not all new ideas. Consider this a nudge to do a bit more. For those committed to increasing access to mental healthcare and substance use treatment, it is time to push for expansive carve-ins.
This is not just about Medicaid. But, as one of the largest payers, Medicaid can have a big impact and set the tone for others. All payers can and should improve access, including Medicare, commercial insurance, and the Veterans Administration.
“Never be mild”
As Secretary of Health Xavier Becerra stated in a recent address to the National Association of Medicaid Directors, “…never be mild. Be game-changing.”
Because so many people are suffering, it is time to give up being mild. It is time to be a game-changer. That means it’s time to carve in mental, emotional, and behavioral healthcare.
Parts of this post were presented at the breakout session, “Thought Provoking Talks; How Can We Meet the Moment in Mental Health and Addiction” at the National Association of Medicaid Directors Annual Meeting, November 15, 2021, Washington, DC.
Jack Westfall