How Medicaid Handles Mental Illness

Mental health in this country is not handled well. That is an understatement!!! Look at the atrocity in Connecticut last week. An young man, supposedly suffering from Asberger’s, a mild type of autism, shot his way into an elementary school and proceeded to slaughter young children and women. Our country does not handle mental health. However, mental health issues exist, are common, and are not treated appropriately. We cannot act like an ostrich and poke our heads in the sand.

The horrifying events of last week’s elementary school slaughter should make us realize that something must be done with how this country handles mental illness.  Folks, it’s not the guns that need control. Gun cannot act on their own. The people holding the guns need to be reasonable and sane. People who suffer mental illness in this country need real services. Real help.

How North Carolina handles mental illness is about to change drastically. The entire Medicaid mental health system is changing. This may be the biggest re-vamping of mental health we have undergone. If it doesn’t work, it will cost billions to change the system back. How will it change? See below.

The sad truth is mental illness is a very under-treated health condition. The stigma that attaches to it is one reason.  But poverty is also a factor.

The N.C. Interagency Council for Coordinating Homeless Programs (ICCHP) conducts an annual survey of homeless people.  In 2008, the statistics were as follows:

  • 12,371 people identified as homeless, including
  • 3,643 people in families, 2,216 of whom were children.
  • 1,054 identified themselves as veterans of military service.
  • 1,961 identified themselves as having a serious mental illness.
  • 4,206 identified themselves as having a substance use disorder.
  • 1,108 identified themselves as being a victim of domestic violence.
  • 6.5 percent of people identified themselves as having been released from the criminal justice system.
  • 6 percent of people identified themselves as having been released from a mental health hospital or drug treatment program.

Half of the homeless identified themselves as suffering from a mental illness or suffering substance abuse! Half! How many homeless suffer a mental illness without a diagnosis?

These are people who should be receiving Medicaid. In order to receive mental health services covered by Medicaid, the mental health services must be determined to be medically necessary to treat the mental illness.

So what is “medical necessity?”

Medicaid covers procedures, products, and services when they are medically necessary. With all the Medicaid rules and regulations, somewhere, medical necessity must be defined. It is not. In North Carolina Clinical Policy 8A, medical necessity is described as: “All Medicaid services are based upon a finding of medical necessity, which is determined by generally accepted North Carolina community practice standards as verified by independent Medicaid consultants. There must be a current diagnosis reflecting the need for treatment.”  What?  Basically, an independent consultant, as of now, VO, must decide whether a health care service is medically necessary. Despite the amorphous definition, medical necessity has been somewhat uniform because all the prior authorizations went through VO. It did not matter in which county you lived. VO was state-wide.

Not for long. In upcoming changes to NC Medicaid, VO will no longer be the independent consultant for North Carolina’s mental health.  The State is creating Managed Care Organizations (“MCOs”).  Suffice it to say, if you are a health care provider in North Carolina, you have heard the term “MCO.” What is an MCO? I guess the correct question is what will be an MCO?

The best way to describe the new Medicaid system in North Carolina, I think, is to explain the process for getting prior approval now and explain how it will change in the upcoming 6-7 months.

To obtain prior authorization now for mental health services, the provider sends documents, usually a Person-Centered Plan (“PCP”) with a Service Order, among other papers, to ValueOptions.  Since 2006, VO has provided North Carolina with utilization management. Meaning health care professionals at VO would review the documents and determine whether the Medicaid recipient met “medical necessity” in order to receive the services requested.

When the MCOs take over, there will be no state-wide definition for medical necessity.  There will be no state contract with VO. Basically, the State will disperse all the Medicaid funds to the MCOs.  No one really knows how many MCOs there will be in North Carolina.  As of now, it appears there will be 12 or so. Alliance Behavioral Health will be one. Wake County could not get qualified on its own, so Wake County partnered up with Durham County.

The thought process was this: The State is too big to understand the needs of local regions. So let the localities decide what services are needed in Medicaid’s mental health. On paper, I think it sounds good. Trying to focus locally is a good thing. The problem I foresee is the lack of a uniform, well-defined criteria for medical necessity in mental health.

It is foreseeable that each different MCO will have different opinions as to what services are medically necessary or not. In Charlotte, Medicaid may cover hyperbolic oxygen treatment for autism. But Raleigh may not. In Raleigh, Medicaid may limit psychiatrist visits for people with violent tendencies, and, in Wilmington, the psych visits may be unlimited. A Medicaid recipient may be denied in Roxsboro for mental health services that would be covered if that Medicaid recipient lived in a different MCOs region.

Mental health is such an important topic. In the wake of the killings in Connecticut, we, as a country, need to learn to better provide services to those with mental illnesses. Medicaid recipients need solid mental health services. With the MCOs provide better mental health services? Maybe. But I think a good start would be to provide a state-wide definition for medical necessity.

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on December 17, 2012, in DHHS, MCO, Medicaid, Medical Necessity, Mental Illness, North Carolina, ValueOptions and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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