ADVERTISEMENT
Buckeye State passes the buck on behavioral health costs
With a vote by Ohio’s General Assembly on Governor John Kasich’s biennial budget proposal looming next month, the state’s behavioral health advocates and providers see a budget that gives with one hand and takes away with the other.
On one hand, Kasich has asked that the state’s share of match funding for mental health and alcohol/drug abuse services be “elevated,” or rolled into its general Medicaid budget—part of a larger plan to restructure and reform Ohio’s Medicaid system. This move would free county behavioral health levy dollars that have, increasingly, been used to pay Medicaid match obligations as state revenues fell, explains Cheri Walter, CEO of the Ohio Association of County Behavioral Health Authorities (OACBHA).
Earlier this year, OACBHA advocated the idea of funding Ohio’s Medicaid match funds for behavioral health not from general revenue funds, but from the same budget line that pays the state’s Medicaid match for physical healthcare services. That budget line is 525, the budget line for the Ohio Department of Job and Family Services (ODJFS), which is currently the largest line item in the state budget.
"It's time to integrate physical and behavioral health," Walter says, adding that if the Medicaid match funds for behavioral health move to the ODJFS 525 line, “our match would be less than 2 percent of that line item. In 2010, the JFS underspent by two times what it would have cost to cover our entire match."
OACBHA also advocated for two other budget provisions: the first would prevent local levy dollars from being used for the state’s Medicaid match. The second would protect behavioral health funding for non-Medicaid eligible Ohioans within the budget process.
But, here is where the other hand took away. To pay for elevating the Medicaid behavioral health matching funds into the general Medicaid budget, the Governor’s 2012 budget calls for additional cuts to community mental health and substance abuse treatment funds, continuing a trend of major cuts that began under the previous Governor, Democrat Ted Strickland.
Plenty of problems
"What was already a stretched-thin safety net of services is starting to break," says Walter. "Unless there is a reinvestment in our system, there will be bigger problems."
Ohio’s got plenty of those as it faces an $8 billion budget deficit. Kasich, a new tax-cutting Republican governor, has promised to fill the budget gap through across-the-board state budget cuts. And, although Ohio’s mental health budget has already endured three years of cuts, (totaling 35 percent), the state’s Department of Mental Health (ODMH) is braced for more in the new Governor’s budget.
"The Governor has recognized publicly that mental health has received a significant volume of budget cuts, but I don't think that means cuts are off the table for this agency," says Tracy Plouck, the new director at the ODMH.
In fact, Kasich's budget would reduce the ODMH's general revenue fund by 4.6 percent between fiscal years 2012 and 2013; the "all funds" change (which includes federal and state rotary funds, in addition to general revenue) would fall six percent. Since these reductions are attributable to Medicaid cost containment measures, Plouck says that the the department's non-Medicaid community subsidy would actually increase by $10 million in the same period.
Big cuts in real dollars
But Walter doesn’t see it that way. Due to the proposed cuts in community services funds (the offset for the elevated Medicaid match funds), Walter says that the for the 2012 budget to be at a “break even” level with the previous budget, an increase of approximately $19 million in non-Medicaid funding for the ODMH and $9 million for the ODADAS would be needed.
"If you go back from 2002 up to the 2012 budget proposal, and look at non-Medicaid funding for the Department of Mental Health, there's been a cut of 76 percent in real dollars. That's not adjusted for inflation," Walter says adding that Ohio Department of Alcohol and Drug Abuse Services (ODADAS) alcohol and drug abuse treatment funds were cut 51 percent.
In testimony before the state legislature, Plouck acknowledged the impact of the Governor’s 2012 state general revenue funding cuts for community services, saying that “to manage within this constraint, it is necessary to reduce proportionately the amount of GRF non-Medicaid community resources that had been available this year on a board-by-board basis," Plouck said. "The goal for Fiscal Year '12 is stabilization: We are elevating Medicaid to take better control of the future and doing the best that we can to provide resources to communities on the non-Medicaid side of the house."
Critics of the budget argue that by continuing to slash community services funding, the state will end up paying millions more. "If we don't have the funds to keep people in community-provided services, we'll have no choice but to increase the number of hospital days," Walter says. "The state is asking us to do more to help with the ongoing opiate epidemic, and they want to release more people from the Department of Corrections into community care. We're just not going to have the money to serve them."
Counties raise more, spend more, serve fewer
As Ohio’s community-focused general revenue funding for behavioral health has dropped, county boards have had to dedicate greater amounts of locally raised levy moneys to meet the state’s Medicaid match. While the Governor’s pending biennial budget will, if passed, essentially protect the those funds, the offsetting cuts that paid for this protection mean that, in more and more cases, counties will come up short in helping non-Medicaid recipients who seek services.
Unfortunately, OACBHA reports that these numbers are substantial and growing: 65 percent of clients needing substance abuse services and 45 percent of those in need of mental health services are not Medicaid eligible.
"It is a challenge that transcends the entire state and the whole system," says Plouck, a former director of Ohio’s Medicaid program. "Part of our challenge in the next budget is to examine how we can take steps to make the funding responsibility and expectations more sustainable."
Funding crisis long in the works
It wasn't supposed to be this way. Under Ohio's Mental Health Act of 1988, the state shifted its treatment focus from state institutions to community mental health treatment and support services. The state's 53 community mental health (CMH), alcohol, drug addiction, and mental health (ADAMH), and alcohol and drug addiction services (ADAS) boards took over the responsibility for paying for outpatient treatment and some hospitalizations using local levy funds and state money, and Ohio closed down ten of its state-operated hospitals.
"The money was supposed to follow the clients into the community, but there really was no more money," Walter says. "The state started cutting budgets, and per diems in hospitals rose 61 percent from 2001 to 2011."
Community mental health providers serve some 400,000 Ohioans. Right now, about 30 percent of funding comes through local levies, 24 percent from the Department of Mental Health, and 34 percent from federal sources.
Community-based funding from the DMH has been cut by 35 percent since 2008 and funding through the ODADAS has been cut by 30 percent since 2007. With those funds drying up, thousands have been dropped from mental healthcare programs, and many small group homes have closed.
While state and federal funding has fallen, local taxpayers have picked up the slack, boosting local levy support for mental health services by 53 percent over the past seven years. "We've done well with levies," Walter says. "That shows the commitment from the community to get behind local behavioral health services."
That is, at least, for mental health services. But funding for drug and alcohol abuse treatment remains politically unpopular. Fewer alcohol and substance abusers are eligible for Medicaid and many end up in jail where they can’t access services. “There has not been a levy passed in the state solely for drug and alcohol addiction services, in part because there's a level of stigma you don't see on the mental health side," Walter explains.
Despite the increase in local levy dollars, counties haven’t been able to get ahead. "They pay that match whether they have enough state dollars or not," Walter says. "If they don't have enough state dollars, they dip into local levy dollars."
With the additional proposed cuts in state funding, county boards would have to rely on existing levies for core services, or pass expanded levies. "The state has a responsibility to fund core services, regardless of whether or not a county has a levy," Walter says. "It's a fallacy for the state to say it is not going to raise taxes. If the state cut so much we have to go out and ask for more levy dollars, it's the same thing."
This increasing focus on Medicaid reimbursement has also had an impact on service delivery, says Jack Cameron, executive director of the Ohio Empowerment Coalition, a consumer advocacy organization.
"The philosophy that drives the system now is not outcomes, but the ability to bill, and primarily to bill Medicaid," Cameron says. "If you can keep tapping Medicaid for day treatment beds, then that's what agencies do because it helps sustain the budget. But are people actually getting better? I would have to say that often, they aren't."
Budget battles ahead
Any shifts in funding have to be accomplished through the budget process in the state legislature. Right now, that process promises to be a raucous and contentious one, and one of Kasich's top priorities is to reduce Medicaid spending, which now tops $15.4 billion and accounts for one-third of the state budget.
But while his budget rhetoric has been gruff, Kasich has taken a nuanced approach to healthcare in general, and mental health funding in particular. In addition to shifting the Medicaid match responsibility, the administration is interested in integrating behavioral and physical health services as part of a cost-cutting restructuring process. This process is to be managed by the newly established Office of Healthcare Transformation.
There has been speculation that a new behavioral health services department could unify Ohio’s fragmented mental health and substance abuse treatment agencies. The proposed budget proposal eases some of the community planning requirements for local mental health and substance abuse boards and is expected to provide some regulatory relief to providers as well.
Pay now, or pay later
Cameron, for one, is happy to see that the new administration is focused on outcomes and integration. "We have to restructure the system because it is disjointed and compartmentalized," Cameron says. "If we don't serve people who have these problems, and they go into prison it saves money on the mental health side, but in terms of total cost we spend more in the long run. What we're doing now is just cost shifting."
Ohio has already submitted a super waiver authority request via the U.S. Department of Health and Human Services to receive federal resources to flesh out integration concepts in the state.
"We’re going to be actively engaged in planning and implementing concepts around care coordination improvements," Plouck says. "That might involve a health home or an accountable care organization. Our options are open that this point, but we are exploring different concepts and how they might work in Ohio."
Plouck also hopes to reduce costs and expand services by taking advantage of expanded Medicaid eligibility in 2014 that was established as part of the federal health care reform law.
In the meantime, county boards are fighting to preserve funding levels and avoid what they see as a potentially catastrophic outcome for community services. "What the boards are saying is, ‘you can pay me now or pay me later,’" Walter says. "If you don't provide those non-Medicaid services, then hospital populations are going to balloon. As people don't get services, you'll see them in jail, they'll be homeless, served in emergency rooms, and that's a lot more expensive than providing services in the community."
Brian Albright is a freelance writer.
