Tennessee pulls plug on mental health carve-out Mental health centers say program has put them in jeopardy
Tennessee Mental Health
March 31, 1997
Tennessee officials abruptly announced in February that they were pulling the plug on TennCare Partners, the managed mental health program that was carved out of the Medicaid program only eight months ago.
The state says it plans to return accountability for mental health to managed care organizations (MCOs) by Jan. 1, 1998, a move that raises an array of other concerns in the mental health community.
"Mental health centers have paid a terrible price," Charles Blackburn, executive director of the Tennessee Association of Mental Health Organizations, recently told the TennCare Oversight Committee. "They have subsidized TennCare Partners to the tune of $750,000-$1 million each and [the program has] exhausted the reserves of one mental health center in Memphis, which has ceased operations." (Spectra Behavioral Healthcare Systems, a Memphis center, which had 2,200 active clients, closed its doors in December.)
In the next few months, five or six other community mental health centers (CMHCs) face similar decisions about whether to remain in business, Mr. Blackburn says. Because of inadequate reimbursement other community mental health centers, face decisions about further cuts in services and staff. The state is now considering providing one-time direct grants to community mental health centers to avoid further losses in the safety net.
The Health Care Financing Administration (HCFA) did a site review of the program a few weeks ago in response to concerns from CMHCs and legislators. One HCFA official says the agency examined issues related to the access to care, the financial impact on CMHCs, the state’s monitoring of the program and available data on the utilization of services.
Health Commissioner Nancy Menke told State Health Watch the state has been planning all along to "carve in" behavioral health. The announcement was made at this time, she said, so the state could make an amendment to the RFPs for the MCOs.
One reason community mental health centers are getting squeezed under
TennCare Partners is that the behavioral health organizations (BHOs) have not succeeded in reducing inpatient hospitalizations.
The community health centers are suffering the consequences because, under some contracts, they are at risk for hospital admissions and the utilization of other services. Projected savings from management of hospitalizations also have not accrued to them as originally planned.
"The financial scheme is a disaster," says Tom Catron, executive director of the Vanderbilt Community Mental Health Center, referring to the compensation plan of one of the BHO partnerships, Tennessee Behavioral Health, Inc. (TBH). Community health centers that are TBH providers are the "last in line" to get paid from the per member per month (PMPM) rate of $22.93. They are paid after hospitals, transportation services and other providers, leaving on average only $4 per enrollee.
No data about hospitalizations
"The provider is saddled with the risk and has no capacity to manage activity. There was no information about hospitalizations, utilization, no management opportunities," says Mr. Catron.
TennCare Partners is being managed by two partnerships of BHOs: TBH, composed of Tennessee Behavioral Health and MBC of Tennessee; and Premier Behavioral Health, composed of AdvoCare of Tennessee, a unit of Green Spring Health Services, Inc. of Maryland, and Columbia Behavioral Health, a unit of HCA/Columbia.
Premier uses a different form of compensation than TBH, which, community mental health centers say, better allows them to cover their costs. The reimbursement is a case rate based on a functional assessment of the patient and now averages $120 each for the priority population—the seriously and persistently mentally ill (SPMI) and seriously emotionally disturbed children (SED). Services for the non-priority population are paid on a fee-for-service basis.
One BHO executive expressed frustrations over working with the state hospital system in Tennessee. Bob Waters, director of planning and evaluation for AdvoCare, blamed many of the policies and procedures in the five regional state hospitals for the failure to significantly reduce hospitalizations.
He estimates that hospitalizations under Premier have declined only 10%. "This is not what I'd call a significant decrease for managed care," he says. Still, Premier has had better luck than TBH, which, as of December 1996, had three times more hospital admissions and twice as many hospital days as Premier. (A top state official says these numbers are being checked because they seem "too high.")
One difficulty in working with state hospitals, Mr. Waters says, have been delays in notification of the BHO when a patient enters the system because of court-ordered treatment. Under TennCare Partners, even those not eligible for the program are covered for court-ordered treatment. If the process of identifying and assigning patients takes "two days, it's two days too long," Mr. Waters says.
Discharging patients from state hospitals also has been difficult, Mr. Waters says. State hospital staff and the BHO have concurrent review on "renewal of admissions." If the state hospital staff disagrees with Premier's decision, they can appeal it to the Department of Mental Health and Mental Retardation. About 75% of appeals of managed care decisions by Premier involve state hospital patients, Mr. Waters says.
"There's overspending for state hospitals, and that has impacted the community mental health centers," he says. "They have a stake in the savings."
Often patients are being admitted to the state hospital system without a pre-screening interview by the community mental health centers mobile crisis teams, he says. However, one community mental health center director says this hasn’t been mandated and is a service that "fell through the cracks" during the transition to TennCare Partners.
Adding to the financial difficulties of the community mental health centers are withholds, rate adjustments and "incurred but not reported" claims. Premier announced a rate adjustment retroactive to July which effectively reduced payments to most of the CMHCs by an average of 10-15%. The case rate adjustment was imposed on top of a general 10% withhold implemented as of Dec. 1. Mr. Waters says the one-time adjustment had to be made because one CMHC did not submit its list of active clients until after payments had been made to other CHMCs.
TBH also says it has overpaid community mental health centers and is now trying to determine what the overpayment is. Early reports were that the overpayment was as high as $10 million, but Dave Patterson, chief operating officer and vice-president, who is part of a new management team at TBH, told legislators he is waiting for accurate hospital census figures to determine the amount. He says it could prove to be as low as $3.6 million.
Program underfunded, critics say
Critics also say TennCare Partners Program is underfunded. Although the state is spending $370 million, $19 million more than it spent last year on mental health, the BHOs are getting 10% of the dollars for administrative costs and profits. Furthermore, many of the dollars budgeted are not getting into the system because TennCare enrollment, now at about 1.1 million, has dropped a few hundred thousand shy of what was projected.
Enrollees are being lost if they fail to pay their premiums as well as through the process of "cleaning the list." While total TennCare enrollment has dropped, the priority population in TennCare Partners, the SPMI and the SED, is on the rise. The state is planning to open TennCare enrollment to children under 18 beginning April 1. About 50,000 children are expected to enroll into TennCare, with the influx bringing more dollars into the mental health program.
HCFA has not yet made its recommendations to the state. However, Commissioner Menke says the state is working on problem areas in the program it has identified, notably data reporting, so that it will have a "better ongoing assessment of services being provided."
One reason hospitalizations haven’t declined more, Ms. Menke says, is that the state has already made progress in this area and may have overestimated the "fluff" in the system.
Contact Mr. Blackburn at 615-254-8331 or Mr. Waters at 615-313-4407.
Tennessee pulls plug on mental health carve-out Mental health centers say program has put them in jeopardy
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