Administration of Mental Health Services by Medicaid Agencies

Administrationof MentalHealthServices byMedicaidAgenciesU.S. DEPARTMENT OF HEALTH AND HUMAN SERVICESSubstance Abuse and Mental Health Services AdministrationCenter for Mental Health Serviceswww.samhsa.gov

Administrationof MentalHealthServices byMedicaidAgenciesJames VerdierAllison BarrettSarah DavisU.S. DEPARTMENT OF HEALTH AND HUMAN SERVICESSubstance Abuse and Mental Health Services AdministrationCenter for Mental Health Serviceswww.samhsa.gov

AcknowledgmentsThis report was prepared by Mathematica Policy Research, Inc. (MPR), for the SubstanceAbuse and Mental Health Services Administration (SAMHSA) of the U.S. Department ofHealth and Human Services (DHHS) under Contract No. 280-03-1501. The authors of thereport are James Verdier, Allison Barrett, and Sarah Davis, of MPR. Judith L. Teich of the Centerfor Mental Health Services (CMHS), SAMHSA, served as government project officer, andJeffrey A. Buck, associate director for organization and financing, CMHS, served as advisor.The authors are grateful to the members of the project’s expert advisory panel, who providedmany thoughtful and insightful suggestions at the outset of the project, members of thispanel are listed in Appendix B. Debra Draper, Lori Achman, and Justin White, formerly ofMPR, played major roles in the development of the survey on which this report is based. LindsayHarris, also formerly of MPR, conducted and assisted with a number of the early interviews.Angela Merrill and Geraldine Mooney of MPR provided thorough and helpful commentson a draft of the final report. Michael Deily of Utah reviewed a later draft and providedvaluable clarifications and suggestions. The report would not have been possible without thegenerous cooperation of the State Medicaid directors and their designees who responded to thesurvey on which the report is based.DisclaimerMaterial for this report was prepared by MPR for SAMHSA, DHHS, under Contract Number280-03-1501. The content of this publication does not necessarily reflect the views, opinions,or policies of CMHS, SAMHSA, or DHHS.Public Domain NoticeAll material appearing in this report is in the public domain and may be reproduced or copiedwithout permission from SAMHSA or CMHS. Citation of the source is appreciated. However,this publication may not be reproduced or distributed for a fee without the specific, writtenauthorization of the Office of Communications, SAMHSA, DHHS.Electronic Access and Copies of PublicationThis publication can be accessed electronically through www.samhsa.hhs.gov/. For additionalfree copies of this document, please call SAMHSA’s National Mental Health Information Centerat 1-800-789-2647 or 1-800-228-0427 (TTD).Recommended CitationVerdier J, Barrett A, Davis S. Administration of Mental Health Services by Medicaid Agencies.DHHS Pub. No. (SMA) 07-4301. Rockville, MD: Center for Mental Health Services, SubstanceAbuse and Mental Health Services Administration, 2007.Administration of Mental Health Services by Medicaid Agenciesiii

Originating OfficeSurvey, Analysis, and Financing Branch, Division of State and Community Systems Development,Center for Mental Health Services, Substance Abuse and Mental Health Services Administration,One Choke Cherry Road, Room 2-1103, Rockville, MD 20857.DHHS Publication No. (SMA) 07-4301Printed 2007iv Administration of Mental Health Services by Medicaid Agencies

III. Medicaid Agency Collaboration with Mental Health Agencies .......... 35A. Measures of Collaboration ............................... 351. External Collaboration. ............................ 352. Staff Meetings ................................... 353. Director Meetings ................................ 404. Advisory Activities ................................ 405. Medicaid Point Person on Mental Health Issues . ........ 406. Mental Health Policy Working Groups ................ 40B. Some Patterns and Correlations ........................... 421. Impact of Agency Structure on Collaboration . .......... 422. Rate-Setting Authority and Collaboration . ............. 44C. Other Factors Affecting Collaboration ...................... 441. Staff Movement Between Agencies. ................... 442. State and Agency Size. ............................. 443. Personal Relationships ............................. 454. Federal Rules and Limitations ....................... 46D. Summary. ............................................ 46IV. A Closer Look at Some Specific Types of States ...................... 47A. State Classifications .................................... 481. Collaboration .................................... 482. Authority ....................................... 483. Summary of Collaboration and Authority Classifications . . 49B. States with Relatively Higher Levels of Medicaid-MentalHealth Agency Collaboration .......................... 491. Managed Care for Medicaid-Funded Mental Health Servicesin Higher-Collaboration States. ...................... 502. Other Common Issues and Projects ................... 50C. States with Relatively Lower Levels of Medicaid-MentalHealth Agency Collaboration .......................... 511. Managed Care for Medicaid-Funded Mental Health Servicesin Lower-Collaboration States ....................... 512. Other Common Issues and Projects ................... 523. Fragmentation of Responsibility ..................... 52vi Administration of Mental Health Services by Medicaid Agencies

D. States with Relatively Higher Levels of Medicaid AgencyAuthority over Mental Health Services. .................. 521. Managed Care for Medicaid-Funded Mental Health Servicesin States with Higher Medicaid Agency Authority. ....... 532. Other Common Issues and Projects ................... 53E. States with Relatively Lower Levels of Medicaid Agency Authority over Mental Health Services. .................. 531. Managed Care for Medicaid-Funded Mental Health Servicesin States with Lower Medicaid Agency Authority ........ 542. Other Common Issues and Projects ................... 54F. Some Patterns and Correlations ........................... 54G. Summary. ............................................ 55V. Summary and Conclusions ................................... 57A. Summary. ............................................ 571. Organization, Funding, Services, Providers, and Managed Care ................................... 572. Data and Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 583. Collaboration Between Medicaid and MentalHealth Agencies .................................. 584. A Closer Look at Some Specific Types of States. ......... 59B. Conclusions .......................................... 601. Importance of Collaboration ........................ 602. Implications of County and Local Responsibility forMental Health Services. ............................ 603. Implications for Reorganizations and Work on Common Problems. ............................... 61References. ..................................................... 63Appendix A: Additional State-by-State Tables .......................... 65Appendix B: Expert Panel on Medicaid Mental Health Services—Programand Analytic Reports .......................................... 77Administration of Mental Health Services by Medicaid Agencies vii

Tables12345678Organizational Structure. ....................................... 10Sources of Medicaid Funding for Mental Health Services. .............. 16Medicaid Services for Which Mental Health Agencies Set Rates ......... 21Medicaid Mental Health Providers ................................ 22Formal Reports on Medicaid Mental Health Services. ................. 28Integrated Data Sets ........................................... 31Collaboration ................................................ 36Mental Health Policy Working Groups. ............................ 41viii Administration of Mental Health Services by Medicaid Agencies

Figures1 Reporting Levels Between the Medicaid Director and the Governor ...... 132 Rate-setting Authority, Mental Health ServicesReports, and Data Sharing ...................................... 273 Organizational Structure and Collaboration BetweenMedicaid and Mental Health Agencies ............................. 434 Rate-setting Authority and Collaboration Between Medicaidand Mental Health Agencies. .................................... 435 Collaboration Among States with Highest and Lowest Populations. ...... 45Administration of Mental Health Services by Medicaid Agenciesix

Executive SummaryState Medicaid agencies are playing an increasing role in funding,managing, and monitoring public mental health services in States,reflecting the steady growth over the last three decades in the shareof public mental health services funded by Medicaid. Yet relatively little isknown on a State-by-State basis about how Medicaid agencies are exercisingtheir responsibilities for mental health services. The survey described in thisreport begins to fill that gap.This report presents the results of hour-longtelephone interviews with State Medicaiddirectors or their designees in all 50 Statesand the District of Columbia that exploredhow State Medicaid agencies are addressingthe organizational, funding, policy, management,and data issues that arise from theirincreased and often shared responsibilities formental health services.Growth in Medicaid Funding of MentalHealth ServicesThe Medicaid share of total national mentalhealth spending (both public and private)rose from 19 percent in 1991 to 27 percentin 2001, while non-Medicaid State mentalhealth spending dropped from 27 percent oftotal national mental health spending to 23percent during the same period. The Medicaidshare of total State mental health spendingis projected to rise from its current levelof more than half to as much as two-thirdsby 2017. The shift toward greater Medicaidfunding of mental health services has resultedin part from the movement of mental healthservices from institutional settings, whereMedicaid funding is limited, to communitysettings, where it is more readily available. Italso reflects efforts by States to obtain FederalMedicaid funding for services that previouslywere funded entirely with State or localdollars.FindingsStates have taken varying approaches inexpanding Medicaid to cover mental healthservices. While Federal law requires that theMedicaid agency must retain ultimateauthority over all aspects of the Medicaidprogram, States may delegate responsibilityto other State agencies or to private contractorsfor activities such as certifying andenrolling providers, defining covered servicesand setting rates, administering payments toproviders, and collecting and reporting data.Some States have chosen to have the Medicaidagency retain full administrative responsibilityfor all mental health services if theyare funded with Medicaid dollars and providedto Medicaid enrollees, while otherStates have chosen to share those responsibilitiesin various ways with mental health orother agencies in the State. As a result of thisflexibility, the administration of Medicaidmental health services varies considerablyacross States.Administration of Mental Health Services by Medicaid Agencies xi

■■■Organizational Structure. In most States,the Medicaid director reports directly tothe Governor or is separated by only onereporting level. State Medicaid and mentalhealth agencies are within the sameumbrella agency in 28 States, most commonlyhealth and human services, and areseparate in 23 States.Funding. In 26 States, the State match forMedicaid mental health services comes atleast partially from a different source thanthe State general fund, most frequentlyfrom counties or other local sources. In32 States, the State match comes at leastpartially from the mental health agency.Providers. The majority of States restrictMedicaid providers of mental health servicesto those with a mental health designation,and 22 States delegate the enrollmentof mental health providers to themental health agency. Twenty-six Statesreported that at least some Medicaidmental health services or populations arecovered through behavioral health organizationsor administrative servicesorganizations.■to the legislature. Medicaid and mentalhealth agency collaboration tends to behighest in States where both agencies arein the same umbrella agency and lowestwhere they are in separate agencies andwhere the mental health agency hasauthority to set some Medicaid rates.Authority. Medicaid agency authority overmental health funding, provider rate setting,and data appears to be highest whenMedicaid and mental health agencies operateseparately and there are limited opportunitiesfor Medicaid to make use of thepublic mental health system, while Medicaidagency authority tends to be lowerwhen the agencies are part of the sameumbrella agency and the public mentalhealth system has the capacity to administerMedicaid services.■■Data and Reporting. Forty States reportedthat their Medicaid agencies produce formalreports containing discrete data onMedicaid mental health utilization orexpenditures, and in 27 States the mentalhealth agency produces such reports. MostStates allow the mental health agencyaccess to the Medicaid Management InformationSystem (MMIS), but very fewStates have linked client-level data.Collaboration. Slightly more than half theMedicaid respondents said that Medicaidand mental health agencies collaborate frequentlythrough internal and externalmeetings, public reports, or presentationsxii Administration of Mental Health Services by Medicaid Agencies

I. IntroductionState Medicaid agencies are playing an increasingly important rolein the funding and administration of State mental health services.While the increase in Medicaid funding for mental health servicesin recent decades and the major factors that account for it have been welldescribed, less is known about how State Medicaid agencies are exercisingtheir growing responsibilities for mental health services. Accordingly,the Federal Substance Abuse and Mental Health Services Administration(SAMHSA) commissioned a telephone survey of State Medicaid agenciesaimed at learning more about how these agencies administer Medicaid-fundedmental health services. The survey asked questions about how Medicaidagencies are organized, what their relationships are with State mental healthagencies, and how funding, provider, data, and reporting issues are handled.The results of the survey are summarized in this report.A. Background and ContextIn 2001, Medicaid spending for mentalhealth care accounted for 27 percent of totalmental health expenditures by all public andprivate payers combined, up from 19 percentin 1991 and 14 percent in 1971. Other Stateand local spending on mental health (includingthat provided through mental healthagencies) dropped from 30 percent in 1971to 27 percent in 1991 and 23 percent in2001 (Mark et al., 2005). Medicaid nowfunds more than half of all mental healthservices administered by States, and couldaccount for two-thirds of such spending by2017 (Buck, 2003). Between 8 and 12 percentof all Medicaid dollars are spent onmental health services (Mark, Buck, Dilonardo,Coffey, & Chalk, 2003).The trend toward greater Medicaid fundingof mental health services began soonafter the Medicaid program was enacted in1965, as mental health care shifted frominstitutional to community settings, and asMedicaid began taking over more of thefinancing role held by State or county mentalhealth authorities before 1970. Between1970 and 1980, the number of inpatient psychiatricbeds in State and county hospitalsfell by more than half as cases and costswere shifted to Medicaid-reimbursable settingsin the community (Frank & Glied,2006a, 2006b).Increased Medicaid funding of mentalhealth services has substantially changed theState mental health policy landscape. FederalMedicaid requirements have reduced theflexibility States previously had to shapemental health services and their delivery, andpressures to use State mental health dollarsto obtain additional Medicaid funding havesometimes limited the ability of mentalhealth agencies to provide services for thosenot eligible for Medicaid (Frank, Goldman& Hogan, 2003).Administration of Mental Health Services by Medicaid Agencies 1

1. Shift from Institutional toCommunity ServicesAs noted above, a major reason for the shifttoward Medicaid funding of mental healthservices is the trend during the past quarterof a century away from providing mentalhealth services in institutions, where Medicaidfunding is very limited, toward providingservices in the community, where Medicaidfunding is more readily available. This movementto deinstitutionalize mental health servicesis consistent with Federal policy on thedelivery of care to persons with mental illness.The President’s New Freedom Commissionon Mental Health identified deliveringcare in an integrated setting, with “services incommunities rather than institutions,” as oneof the hallmarks of a “transformed system”for treating mental illness. “[T]he Nationmust replace unnecessary institutional carewith efficient, effective community servicesthat people can count on,” the Commissionsaid. “It needs to integrate programs thatare fragmented across levels of governmentand among many agencies” (New FreedomCommission on Mental Health, 2003,pp. 3–4).2. Impact on FinancingWhite and Draper (2004) identify this shifttoward community care as sparking the trendtoward increased Medicaid funding for mentalhealth services. Since Federal Medicaidregulations prohibit funding services foradults between 22 and 64 years of age ininstitutions for mental diseases (the IMDexclusion), deinstitutionalization has resultedin many previously ineligible persons becomingeligible to receive Medicaid-funded services.Many States, facing budget shortfalls,looked to Medicaid as a way to save moneyby obtaining a Federal match for services thatformerly had been covered solely by the Stategeneral fund. Between 1997 and 2001, Statematch and Federal Medicaid funds for mentalhealth services increased 69 percent, whileState general funds rose by only 19 percent(National Association of State Mental HealthProgram Directors Research Institute [NRI],2004). The influx of Medicaid funding hasgiven State and Federal Medicaid agenciesmore overall influence within State publicmental health systems (Frank et al., 2003).There has, however, been no systematic Stateby-Stateanalysis of the characteristics of thisinfluence, from the Medicaid agency perspective,with respect to the policy-setting process,funding arrangements, or data sharing.(As noted below, several surveys in recentyears have looked at these issues from theperspective of State mental health agencies.)3. Impact on Organizational StructureThe increasing role of Medicaid in providingmental health services also may influence thestructure of State agencies, and it may affectany reorganizations States undertake. In2003, a study of State restructuring effortsfound that 18 of the 22 States undergoingchanges were consolidating health (and sometimeshuman services) agencies, in many casesunder one umbrella agency (VanLandeghem,2004). The rationale for many of theserestructurings was to move away from definingState agencies by services and towarddefining them by the populations they served.Of the 15 State restructuring initiatives thataffected Medicaid in 2003, 4 States proposedelevating the Medicaid agency to a moreprominent place within existing health structures(VanLandeghem, 2004). 1 The movetoward more consolidated health structures,1The report did not say whether any of thereorganizations proposed elevating mentalhealth agencies.2Administration of Mental Health Services by Medicaid Agencies

with Medicaid playing a more prominentrole, is consistent with the enhanced roleMedicaid has played in funding mental healthservices. In 2003, 21 States reported havingan umbrella agency that included both Medicaidand the mental health authority, while15 States had independent mental healthagencies (VanLandeghem, 2004). To theextent that the trend toward mental healthservices being funded by Medicaid continues,restructurings may result in more mentalhealth authorities being co-located along withMedicaid within larger health structures.4. Impact on ConsumersThe 2003 New Freedom Commission reportnoted that the complex mental health systemoverwhelms many consumers and that “fragmentationis a serious problem at the Statelevel”:State mental health authorities haveenormous responsibility to delivermental health care and support services,yet they have limited influenceover many of the programs consumersand families need. Most resources forpeople with serious mental illness (e.g.,Medicaid) are not typically within thedirect control or accountability of theadministrator of the State mental healthsystem. For example, depending on theState and how the budget is prepared,Medicaid may be administered by aseparate agency with limited mentalhealth expertise. Separate entities alsoadminister criminal justice, housing,and education programs, contributingto fragmented services (New FreedomCommission, 2003, p. 3).B. Survey of State MedicaidDirectorsThis report provides, from the perspective ofState Medicaid agencies, a State-by-State lookat some of the effects of increased Medicaidfunding and influence on the provision ofmental health services. It is based on theresults of a telephone survey of Medicaiddirectors or their designees in all 50 Statesand the District of Columbia.1. MethodologyThe telephone survey was conducted betweenJuly 2005 and February 2006. 2 This hourlong,in-depth interview, consisting of bothclosed- and open-ended questions, wasdesigned to gather the Medicaid perspectiveon five domains: organizational structure,Medicaid mental health policy infrastructure,Medicaid mental health services and spending,Medicaid mental health providers, anddata use and reporting. Given their busyschedules, those respondents who wanted tocomplete the closed-ended questions prior tothe telephone interview could request andreceive a copy of the survey instrument inadvance.The response rate was 100 percent, withfive States electing to complete the surveyentirely in writing rather than through a telephoneinterview. In 22 States, the respondentswere the heads of the Medicaid agency;in 7 States the respondents reported directlyto the Medicaid directors; in 15 States therewere one or more levels between the respondentsand the Medicaid directors; and in 6States the Medicaid directors designatedrespondents in the State mental healthagency. 3 On average, the respondents hadheld their current positions for 4 years andhad been involved in their States’ or any2Three Medicaid director interviews wereconducted in late 2004, as part of a pretestof the survey instrument.3In one State, the survey was filled out andreturned via fax without respondent identification.Administration of Mental Health Services by Medicaid Agencies 3

States’ Medicaid program for 11 and 16years, respectively. 4Once the data collection was complete,responses to the closed-ended questions ineach State were compiled into 10 tables andsent to each respondent and Medicaid directorto allow States the opportunity to correctany inaccuracies or nonresponses. Each Statereceived only the data from that State. Thirty-eightStates provided corrections or confirmedthe accuracy of the data in the tables.2. LimitationsThe survey represents a snapshot at a pointin time. The ways in which Medicaid agenciesexercised their responsibilities for mentalhealth services in the last half of calendaryear 2005, when most of the interviews wereconducted, were often different in prior yearsand will change in the future in many Statesbecause of gubernatorial elections, new agencyleadership, reorganizations, and new Statepriorities. The survey represents primarily theMedicaid agency perspective, although insome instances Medicaid directors designatedrespondents from the State mental healthagency, instead of or in addition to Medicaidagency respondents.The survey took 7 months to complete,reflecting the difficulty in scheduling 1-hourinterviews with high-level State officials andtheir staffs who have many other, oftenunpredictable, demands on their time, especiallyduring legislative sessions.Respondents varied in their ability toanswer all of the questions in the survey andin the extent to which they consulted withothers in the Medicaid and mental health4In States where more than one respondentwas on the call, only the experience of themost senior respondent was used for thedata reported in this paragraph.agencies to obtain the information they neededto respond. As noted above, the Medicaiddirector was not the respondent in everyState. Other respondents may not have hadthe broad perspective of a Medicaid director,although they may have had more specializedknowledge about particular issues. Midlevelmanagers, for example, are not likely to havefirsthand knowledge of what is discussed inmeetings between agency directors, withumbrella agency heads, or with the Governor.Conversely, Medicaid directors may notknow about all of the day-to-day interactionsthat may occur between Medicaid and mentalhealth agency staff, or about the details ofdata collection and use or provider licensingand certification.In addition, with only an hour to speak toeach respondent, there were limits on thedetail that could be obtained and the followupquestions that could be asked. For example,while the survey requested some informationabout the use of Medicaid managedcare, the complexity and variety of managedcare programs used by State Medicaid agenciesmade it difficult to gather systematic andconsistent State-by-State information on theseprograms.C. Overview of the Rest of the ReportChapter II presents a summary of the findingsfor all States, focusing on the organizationalstructure for the administration ofMedicaid mental health services, how issuesrelated to funding and providers are handled,and data collection and reporting. The chapterincludes State-by-State tables that summarizeState responses to most of the questionsin the survey, as well as graphs that highlightsome of the patterns in the responses. It alsoincludes excerpts from the interviews and dis-4Administration of Mental Health Services by Medicaid Agencies

cussions of some issues raised in response toopen-ended questions.Chapter III continues the presentation ofresults for all States, focusing in particular onthe relationships between Medicaid and mentalhealth agencies and factors that facilitateor may impede Medicaid and mental healthcollaboration.Chapter IV looks in more detail at somespecific types of States: those with relativelyhigher and lower levels of collaborationbetween the Medicaid and mental healthagencies, and those in which the Medicaidagency either retains a relatively high degreeof authority over Medicaid-funded mentalhealth services or shares that authority to arelatively high degree with the mental healthagency. The chapter examines how these fourdifferent types of States deal with commonissues, such as Medicaid managed care programsthat cover mental health services.Chapter V summarizes the report and providessome conclusions.Appendix A includes additional State-by-State tables. Appendix B lists the experts onthe Medicaid Mental Health Services Panel.Administration of Mental Health Services by Medicaid Agencies 5

II. National Overview:OrganizationalStructure, Funding,Providers, and DataThis chapter provides a national overview of how State Medicaidagencies administer Medicaid-funded mental health services, focusingspecifically on organizational structure, funding, services, providers,managed care, and data sharing and reporting. Chapter III describesways in which Medicaid agencies interact with mental health and other Stateagencies in administering Medicaid-funded mental health services and developingpolicy. The tables provide State-level detail from the survey on theseissues, and the graphs highlight some national patterns. Issues highlightedby interviewees in response to open-ended questions, such as the impact ofreorganizations, are also discussed.A. Organizational Structure must be covered by Medicaid and which servicesmay and must be covered. States are1. Backgroundrequired to cover a core set of medical servica.State Medicaid Agencies es for all Medicaid beneficiaries, such as phy-Medicaid Program Overview. The Medicaid sician visits, inpatient and outpatient hospitalprogram is a joint Federal-State program that services, and certain screening services forprovides health care to low-income Ameri- children. States have the option to covercans in all 50 States and the District of additional services if they choose, includingColumbia. The Federal Government provides mental health services such as inpatient psyfrom50 to 76 percent of the funding for chiatric services for children and the elderly;Medicaid, depending on State income levels, clinical services provided by a psychiatrist,and State and local governments provide the psychologist, or social worker; or outpatientrest. States retain primary authority over how rehabilitative services. 5the program is administered, but they must5However, States cannot receive Federalfollow certain Federal guidelines in order tomatching funds for services provided tocontinue receiving Federal funding. Theseadults aged 22 to 64 in institutions forguidelines specify which groups may andmental diseases.Administration of Mental Health Services by Medicaid Agencies 7

“Single State Agency” Requirement. Federallaw and regulations require that there be a“single State agency” that administers orsupervises the administration of the StateMedicaid program. Day-to-day responsibilityfor many aspects of the Medicaid programmay be delegated to other State agencies oradministered by private contractors, as longas the Medicaid agency retains ultimateauthority and responsibility. 6 Other Stateagencies or contractors, for example, mayshare responsibility for certifying and enrollingproviders, defining covered services andsetting rates, administering payments to providers,collecting and reporting data, anddetermining the eligibility of applicants andenrolling them into the program.With respect to mental health services, aState may choose to have the Medicaid agencyretain full responsibility for all such servicesif they are funded with Medicaid dollarsand provided to Medicaid enrollees, or sharethose responsibilities in various ways withmental health or other agencies in the State.As a result of this flexibility, the organizationalstructure of the Medicaid agency andother State agencies that have responsibilityfor administering some functions of Medicaidmay vary considerably across States.Medical Care Advisory Committee. Inaddition to the “single State agency” requirementnoted above, Federal regulationsrequire that there be a Medical Care AdvisoryCommittee to advise the State Medicaiddirector about health and medical care services.7 The membership of this committee mustinclude the director of either the public welfaredepartment or the public health depart­6Social Security Act, Section 1902(a)(5), and42 Code of Federal Regulations (CFR) sec.431.10.742 CFR sec. 431.12.ment, whichever does not include the Medicaidagency. There is no explicit requirementfor State mental health agency representation.Data Requirements. State Medicaid agencieshave also been required since 1999 tosubmit data to the Federal Government onservices provided to beneficiaries andamounts paid to providers in uniform electronicformats through the Medicaid StatisticalInformation System (MSIS). 8 Medicaidagencies have been required since the mid­1970s to have a standardized and mechanizedclaims processing and informationretrieval system, called the Medicaid ManagementInformation System (MMIS).b. State Public Mental Health SystemsThere are many State agencies that may providemental health services, such as the agenciesresponsible for disability services, education,juvenile justice, or corrections, but thedominant agency for administering services inthe public mental health system in mostStates is the State mental health agency. Mentalhealth agencies are usually responsible foroperating State psychiatric hospitals andfunding community mental health centers. Insome States, the mental health agency is alsoresponsible for providing services related tosubstance abuse or developmental disabilities.While State mental health agencies receivesome Federal money in the form of CommunityMental Health Services Block Grants, 9the majority of funding comes from the State.Accordingly, the mental health agency generallyhas more freedom than the Medicaidagency in deciding what populations to cover,what services to provide, and how those servicesare administered.8Social Security Act, Section 1903(r)(1)(F).9Authorized by Title XIX of the PublicHealth Services Act and administered bySAMHSA.8Administration of Mental Health Services by Medicaid Agencies

States also have more flexibility in choosingthe organizational structure of the agencyor agencies that provide mental health services,since there is no Federal “single Stateagency” requirement as there is in Medicaid.A number of States have more than one mentalhealth agency. States that receive Federalmental health formula grants are required tohave a State Mental Health Planning Councilthat includes a representative of the StateMedicaid agency. 10 State mental health agenciesare not required to provide the kind ofuniform and detailed data to the FederalGovernment on enrollment, services, andprovider payments that Medicaid agenciesmust provide.2. Survey ResultsThe majority of States 11 have one State-levelMedicaid agency and one State-level mentalhealth agency (Table 1). Seven States reportedmore than one State-level mental health agency,in most cases due to a separation of thechild and adult mental health systems. 12 In anumber of States, including California, Iowa,Ohio, and Utah, county mental health agenciesplay a large role in administering mentalhealth services and working with the StateMedicaid agency.States reported that the Medicaid andmental health agencies are under the sameumbrella agency in 28 States, and are separateagencies in 23 States. Within the umbrellaagencies, some States arrange Medicaidand mental health as parallel or sister agencies.In a few States, the umbrella agencyitself is the designated “single State agency”for Medicaid, and the mental health agency isa division within it. More than half of theumbrella agencies (17) are combined healthand human services agencies, while 7 Stateshave umbrella agencies that deal with humanservices only, and 4 States have umbrellaagencies that deal with health only. A numberof States where the two agencies are separatereported that the mental health agency was acabinet-level agency of its own, or that itreported to its own appointed board.In the vast majority of States, two or fewerreporting levels separate the Medicaid directorand the Governor (Figure 1). There areonly 5 States where the Medicaid directorreports directly to the Governor; in 25 States,one formal organizational level separatesthem, while in another 19 States, they areseparated by two organizational levels. Inonly two States are there three or more levelsbetween the Medicaid director and theGovernor.1042 USC sec. 300x-3(c)(1)(A)(ii).11In this report, the District of Columbiagenerally is referred to as a State when thenumbers of States in various categories arereported.12Connecticut, Delaware, Hawaii, Montana,Nevada, New York, and Rhode Islandreported more than one mental healthagency. For the remainder of this report, theadult mental health agency or the agencyidentified by survey respondents as the mainState-level mental health agency is referredto as the State mental health agency.Administration of Mental Health Services by Medicaid Agencies 9

Table 1: Organizational StructureState Medicaid andmental healthagenciesunder the sameumbrella agencyName of the umbrella agency More than onemental healthagencyReporting levels between the Medicaid director and the Governor 1 Interagency agreementor memorandum ofunderstanding betweenthe Medicaid and mentalhealth agenciesTotal 28 7 34Alabama No No None YesAlaska Yes Department of Health and Social Services No Two NoArizona No No None YesArkansas Yes Department of Health and Human Services No Two NRCalifornia Yes Department of Health and Human Services No Three YesColorado No No Two YesConnecticut No 2 Yes Two Yes 5Delaware Yes 4 Department of Health and Human Services Yes One Yes 6District of Columbia No No Two YesFlorida No No One YesGeorgia No No Two YesHawaii No 2 Yes One Yes 5Idaho Yes Department of Health and Welfare No None NRIllinois No No Two YesIndiana Yes Family and Social Services Administration No One YesIowa Yes Department of Human Services No One NoKansas No No One YesKentucky Yes Cabinet for Health and Family Services No Four or more YesLouisiana Yes Department of Health and Hospitals No Two YesMaine Yes Department of Health and Human Services No Two NoMaryland Yes Department of Health and Mental Hygiene No Two NoSee notes at end of table.Continued10 Administration of Mental Health Services by Medicaid Agencies

Table 1: Organizational Structure, continuedState Medicaid andmental healthagenciesunder the sameumbrella agencyName of the umbrella agency More than onemental healthagencyReporting levels between the Medicaid director and the Governor 1 Interagency agreementor memorandum ofunderstanding betweenthe Medicaid and mentalhealth agenciesTotal 28 7 34Massachusetts Yes Executive Office of Health and Human Services No One YesMichigan Yes Department of Community Health No Two NoMinnesota Yes Department of Human Services No One NoMississippi No No None YesMissouri No No One YesMontana Yes 3 Department of Public Health and Human Services Yes One No 7Nebraska No No One YesNevada Yes 3 Department of Health and Human Services Yes One Yes 5New Hampshire Yes Department of Health and Human Services No One NoNew Jersey Yes Department of Human Services No Two NoNew Mexico No No One YesNew York No Yes Two YesNorth Carolina Yes Department of Health and Human Services No One YesNorth Dakota Yes Department of Health and Human Services No One YesOhio No No One YesOklahoma No No Two YesOregon Yes Department of Human Services No One NoPennsylvania Yes Department of Public Welfare No One NoRhode Island No 2 Yes Two Yes 5South Carolina No No None YesSouth Dakota No No Two NoSee notes at end of table.ContinuedAdministration of Mental Health Services by Medicaid Agencies 11

services for adults ages 22 to 64 in institutionsfor mental diseases (the IMD exclusion),so the shift toward community care hasincreased the opportunity for States to useMedicaid funding to provide mental healthservices (White & Draper, 2004). Since theStates and the Federal Government jointlyfinance Medicaid, States that use Medicaidfunding to deliver mental health services needto provide only the “State match,” whichcurrently ranges from 24 to 50 percent of thetotal cost of providing services, with the FederalGovernment providing the remainder.States have flexibility in choosing the sourceof State match funds for Medicaid-financedservices. Usually, the State match for Medicaidservices comes from the State generalfund as part of the Medicaid agency budget.However, State match funds for mentalhealth services may also be provided from thebudget of other State agencies (usually themental health agency) or from sources otherthan the State general fund.In almost two-thirds of the States (32), theState match for Medicaid mental health servicescomes at least partially from the Statemental health agency. This arrangement ismore common in States with separate Medicaidand mental health agencies: 74 percent ofStates with separate agencies reported Medicaidmatch money was provided by the mentalhealth agency, compared to 54 percent ofStates with an umbrella agency.Slightly more than half of the States (26)reported that Medicaid State match fundscome at least partially from sources otherthan the State general fund (Table 2). Amajor source of separate funding is counties,which provide Medicaid match funds formental health services in 22 States. Otherstreams of Medicaid mental health dollarscome from property taxes or other local revenueused to fund community mental healthcenters (CMHCs), or through schools ormunicipalities that provide funding for Medicaidmental health services to children.County funding occurs at about the samerate in States where Medicaid and mentalhealth are under an umbrella agency as inStates where the agencies are separate.Some States track Medicaid spending onmental health services, while other States donot treat mental health as a separate categoryof services for Medicaid budgeting purposes.In slightly fewer than half of the States (23),the Medicaid agency maintains a separateline item in its budget for mental health services.This is more likely to occur in Stateswhere Medicaid and mental health are underthe same umbrella agency. Half of all Stateswith an umbrella agency have a separate lineitem for Medicaid mental health services,compared to only 39 percent of States withseparate agencies.2. Covered ServicesStates reported electing to classify a widerange of services as Medicaid mental healthservices for State budgeting or rate-settingpurposes. Every State reported that outpatientservices provided by psychiatric or designatedmental health providers were definedas Medicaid mental health services. Outpatientservices provided at a community mentalhealth center, mental health services providedunder the rehabilitation option, andinpatient mental health services in a psychiatrichospital were classified by more than 45States as Medicaid mental health services.Inpatient mental health services at a generalhospital are classified as Medicaid mentalhealth services in 43 States, and outpatientmental health services provided by a generalor family physician are classified as Medicaidmental health services in 31 States.14 Administration of Mental Health Services by Medicaid Agencies

Impact of ReorganizationsIn the interviews, a number of respondents reported State government reorganizations, with thosefrom 10 States noting that significant reorganizations had occurred in the last 3 years or currentlywere being implemented. These reorganizations were generally the result of a gubernatorial initiative,and, with a small number of exceptions (most prominently New Mexico), were not aimed primarilyat modifying relationships between Medicaid and mental health agencies. Nonetheless, most ofthe reported reorganizations affected those relationships. In some cases, respondents said thereorganizations facilitated a better relationship between the Medicaid and mental health agencies byaligning their projects and agendas and helping them to focus on common problems. In other cases,however, the reorganizations were perceived to disrupt established relationships by imposing newstructures and reporting relationships and putting new people in positions of responsibility. Generally,if the reorganizations were driven by an attempt to align funding and policy and decrease silo behavior,respondents said State agencies had easier transitions and better ultimate outcomes.Efforts to Align Funding and PolicyIn a few States, the reorganizations were driven by efforts to “put the budget where the policy was” bygiving the mental health agency more authority over Medicaid funds. In one State, the respondent notedthat financial issues drove the State reorganization and that the new system alleviated much of thefriction that once existed between the mental health and Medicaid agencies. The new system put bothwithin the same agency, but in different departments. Each department head now reports directly to theGovernor, but there also is a policy cabinet that oversees the work of the departments.Other States took a more comprehensive approach; in one State, the entire human services agencystructure underwent extensive change in both organizational structure and leadership. In this State, theMedicaid and mental health agencies had been relatively autonomous, although the Medicaid agencyclearly was the dominant force. Under the new structure, authority over Medicaid is more widelydiffused among other human services agencies, and both Medicaid and mental health agencies arenow lower in the overall organizational structure, below an executive secretary of health and humanservices.Examples of DifficultiesWhile reorganizations can improve relationships between the two agencies, they also can createtension and make collaboration more difficult. Some respondents reported that putting Medicaid andmental health agencies into two separate departments has led to increased polarization. However, themajority of States that have experienced negative consequences from reorganizations were those inwhich the two organizations were artificially merged as part of reorganizations that were not focusedmainly on the relationships between Medicaid and mental health agencies. One respondent described itas “new, chaotic, and full of bumps” as the mental health authorities were moved into a newly formeddepartment that also contains the Medicaid agency.Administration of Mental Health Services by Medicaid Agencies 15

Table 2: Sources of Medicaid Funding for Mental Health ServicesState Separateline item inMedicaidbudgetfor mentalhealthservicesState General Fund Some Statematch for mentalMentalhealthservicesfundedby mentalhealthauthorityhealth servicesfrom differentsource thanother Statematch fundsMental healthservicesfundedby countygovernmentsOther Funds 1Total 23 32 26 22 9Separate,dedicatedfundingstream formental healthOther Match Funds DescriptionAlabama Yes Yes No No No —Alaska Yes Yes Yes — Yes Mental Health Trust Authority contributions and alcohol tax dollars.Arizona No No Yes Yes Yes The State match is paid with a combination of general fund monies, afixed contribution from each county, and tobacco-related dollars.Arkansas NR No No No No —California Yes No Yes Yes Yes County Realignment Funds, County General Funds, and Proposition 63.Colorado Yes No Yes No Yes Tobacco Litigation Settlement Cash Fund funds mental health care forparticipants in the Breast and Cervical Cancer Program.Connecticut Yes Yes 2 No No No —Delaware No No No No No —District ofColumbiaNo Yes No — No —Florida Yes Yes 3 Yes No Yes Certified local match.Georgia No Yes No No Yes —Hawaii No Yes Yes No No The Department of Health puts up the state match for services paid forby Adult Mental Health Division and Child & Adolescent Mental HealthDivision.Idaho No No Yes No No Public schools put up a match for all school-based Medicaid services.Illinois No Yes No Yes No —Indiana Yes Yes Yes Yes No CMHCs use property tax money for the match for some discrete things,such as the Medicaid Rehab Option and SED.Iowa No No Yes Yes No Property tax dollars from the counties .See notes at end of table. Continued16 Administration of Mental Health Services by Medicaid Agencies

Table 2: Sources of Medicaid Funding for Mental Health Services, continuedState Separateline item inMedicaidbudgetfor mentalhealthservicesState General Fund Some Statematch for mentalMentalhealthservicesfundedby mentalhealthauthorityhealth servicesfrom differentsource thanother Statematch fundsMental healthservicesfundedby countygovernmentsOther Funds 1Total 23 32 26 22 9Separate,dedicatedfundingstream formental healthOther Match Funds DescriptionKansas Yes Yes Yes Yes No CMHCs receive a certified match from the counties and from some cities.Kentucky No No No No No —Louisiana No No No No No —Maine Other 4 Yes No No No —Maryland Yes Yes No No No —Massachusetts No Yes 3 Yes No No Municipal Medicaid for children in special education. Within an array ofservices, if mental health services are provided then the match is billed tomunicipalities.Michigan Yes Yes Yes Yes Yes About $26 million comes from a local contribution to the sole-source localmanaged care organizations.Minnesota No Yes Yes Yes No Counties.Mississippi No Yes Yes Yes No Special funds and tobacco settlement funds. Mental health in particularreceives funding through counties. DMH secures State general funds forCMHCs, but when the funding is short, counties cover the match.Missouri No Yes Yes Yes No For certain facility-based services (i.e., inpatient psych for under 21), theState draws down the Federal Medicaid match by using State employeesalaries as “certified public expenditures.”Montana Yes Yes Yes Yes Yes Counties give the money to the mental health authority to use for theState match.Nebraska Yes No No No No —Nevada No Yes Yes Yes No County school districts have their own revenue streams and their fundsare used for public matters.NewHampshireYes Yes No No No —See notes at end of table. ContinuedAdministration of Mental Health Services by Medicaid Agencies 17

Table 2: Sources of Medicaid Funding for Mental Health Services, continuedState Separateline item inMedicaidbudgetfor mentalhealthservicesState General Fund Some Statematch for mentalMentalhealthservicesfundedby mentalhealthauthorityhealth servicesfrom differentsource thanother Statematch fundsMental healthservicesfundedby countygovernmentsOther Funds 1 Other Match Funds DescriptionSeparate,dedicatedfundingstream formental healthNew Jersey Yes Yes 6 No No No —New Mexico Yes No Yes Yes No City and county funds.New York No Yes Yes Yes No The local governments provide 25% for acute care services and 10% forlong-term care services. Some services have no local share.North Carolina Yes No Yes Yes No County funds.North Dakota No No No No No —Ohio No Yes Yes Yes No By the local boards, which raise money independently through mill levies.Oklahoma No Yes No No No —Oregon NR Yes 3 No Yes No —Pennsylvania Yes No No No No —Rhode Island No Yes No No No —South Carolina No Yes Yes 5 Yes 5 No State Mental Health Authority may receive funding from county governmentsthat may be used as matching funds.South Dakota No No No No No —Tennessee Yes No No No No —Texas NR Yes No No No —Utah Yes Yes Yes Yes Yes Outpatient services are funded through a combination of State passthrough,local county, and Federal matching funds.Vermont No Yes No No No —Virginia Yes Yes Yes Yes No Local match for children’s services: three levels of residential treatment,and one type of targeted case management.Washington Yes Yes Yes Yes No Local and county-level funds.See notes at end of table.Continued18 Administration of Mental Health Services by Medicaid Agencies

Table 2: Sources of Medicaid Funding for Mental Health Services, continuedState Separateline item inMedicaidbudgetfor mentalhealthservicesState General Fund Some Statematch for mentalMentalhealthservicesfundedby mentalhealthauthorityhealth servicesfrom differentsource thanother Statematch fundsMental healthservicesfundedby countygovernmentsOther Funds 1 Other Match Funds DescriptionSeparate,dedicatedfundingstream formental healthWest Virginia No No No No No —Wisconsin Yes No Yes Yes No 100% county match for community support programs, crisis services, andtargeted case management .Wyoming Yes No No No No —NR = No responseMay flow into the State general fund in some states.For Family Medicaid only.The State mental health authority provides match for some services, not all.The legislature appropriates some money to the State mental health authority, which is matched and paid out through Medicaid. Medicaid also has a separate fund/accountthat also gets money from the mental health office.In State mental health authority budget, not Medicaid budget.State institution services only.123456Administration of Mental Health Services by Medicaid Agencies 19

Thirty-nine States classified psychotropicdrugs as Medicaid mental health services,although these drugs generally were includedwith other prescription drugs for Medicaidrate-setting and budget purposes (see AppendixA, Table A.2, for State-specific information).Half of the States reported that servicesother than those listed above are also definedas Medicaid mental health services. The mostcommon of these other services were targetedcase management (in 10 States) and mentalhealth services to children under EPSDT 13(5 States). One State reported that all mentalhealth services for children are classified asEPSDT services.3. Rate-Setting AuthorityJust under half of the States report delegatingauthority to set rates for at least some Medicaidmental health services to the mentalhealth agency (Table 3). The most commontype of Medicaid service for which mentalhealth agencies have rate-setting authority isresidential treatment (17 States), followed byservices provided by psychiatric social workers,targeted case management, and psychosocialrehabilitation (in 16 States). Mentalhealth agencies are least likely to haveauthority over the rates for inpatient mentalhealth services in general or psychiatric hospitals.(See Appendix A, Table A.1, for Statespecificinformation.)In the 25 States where the mental healthagency has the authority to set rates, thenumber of services for which the agency canset rates varies widely. In five States, the mentalhealth agency can set only one rate, eitherfor services provided at a mental health clinicor for home- and community-based services.In 11 States, the agency has the authority toset rates for between two and nine Medicaidmental health services. Nine more Statesallow the mental health agency to set ratesfor more than 10 services, including one Statethat allows it to set rates for all Medicaidmental health services. In States where themental health agency has rate-setting authority,it sets an average of seven rates.States in which the mental health agencyhas rate-setting authority are more likely tohave counties provide part of the State matchfor Medicaid mental health services (52 percent),compared to States where the mentalhealth agency sets no rates (35 percent).Mental health agencies that have the authorityto set rates also are much more likely toprovide some Medicaid match funding themselves.Medicaid mental health services arefunded by mental health agencies in 76 percentof the States where the agency has ratesettingauthority, as opposed to only half theStates where the mental health agency has norate-setting authority.13The Early Periodic Screening, Diagnostic,and Treatment (EPSDT) service isMedicaid’s comprehensive and preventivechild health program for beneficiaries underage 21.20 Administration of Mental Health Services by Medicaid Agencies

Table 3: Medicaid Services for Which Mental Health Agencies Set RatesMental Health Agencies withRate-setting Authority25Services…Residential treatment 17Psychiatric social workers 16Targeted case management 16Psychosocial rehabilitation 16Partial day treatment 15Outpatient hospital services 13Mental health clinic 10Services of other licensed professionals 10Physician services 10Clinical psychologists 9Family support services 9Individual, group, or family therapy 8Respite care 8School-based services 7Home and community-based services 7Inpatient mental health—general hospital 6Inpatient mental health—psychiatric hospital 44. Medicaid Mental Health ProvidersIn addition to deciding what services to coverand setting rates for those services, Medicaidagencies must define what types of providersare qualified to provide services to Medicaidbeneficiaries and enroll willing providers.States are generally required to allow anyqualified provider who is willing to provideservices at the reimbursement level set by theMedicaid program to enroll as a provider.“Provider” is broader than just individualpractitioners; States can also enroll healthcare plans as providers in managed careStates, for example, and clinics and otherhealth centers can enroll as providers inmany States.While nine States define Medicaid mentalhealth providers very broadly, as any provider14 that provides a mental health service(Table 4), the majority (26) restrict the definitionto providers with a mental health or psy­chiatric designation. A few States (13) havesome other definition for a Medicaid mentalhealth provider. 1515Five of the States with an “other” definitiondefine Medicaid mental health providers asphysicians with a mental health or psychiatricdesignation, plus a few other mentalhealth professionals such as mental healthbehavioral aides and licensed counselors.One State defines a Medicaid mental healthprovider as any provider with a mentalhealth or psychiatric designation but uses abroader definition in rural areas.14In one State, a provider is defined as anyphysician who provides a mental health service.Administration of Mental Health Services by Medicaid Agencies 21

Table 4: Medicaid Mental Health ProvidersState Provider definition Must be certifiedor enrolled throughthe mental healthagencyMedicaid mentalhealth providersare capped interms of yearlyreimbursementTotal 22 7 20AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareDistrict ofColumbiaFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandProviders with a psychiatric ormental health designationOther definition of Medicaidmental health providerOther definition of Medicaidmental health providerProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationOther definition of Medicaidmental health providerProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationOther definition of Medicaidmental health providerAny provider providing amental health serviceProviders with a psychiatric ormental health designationAny provider providing amental health serviceOther definition of Medicaidmental health providerOther definition of Medicaidmental health providerProviders with a psychiatric ormental health designationAny provider providing amental health serviceProviders with a psychiatric ormental health designationYes No YesYes No NoNo Yes YesNo No NoYes No YesNo No YesNo No NoNo No YesYes Yes YesYes No NoYes No YesNo No NoNo No NoNR Yes YesNo No NoNo No NoYes 1 No NoYes No NoYes No NoYes No NoNo No YesMedicaid mentalhealth providerspaid differentlythan otherMedicaid providersSee notes at end of table.Continued22 Administration of Mental Health Services by Medicaid Agencies

Table 4: Medicaid Mental Health Providers, continuedState Provider definition Must be certifiedor enrolled throughthe mental healthagencyMedicaid mentalhealth providersare capped interms of yearlyreimbursementTotal 22 7 20MassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaProviders with a psychiatric ormental health designationOther definition of Medicaidmental health providerOther definition of Medicaidmental health providerProviders with a psychiatric ormental health designationOther definition of Medicaidmental health providerProviders with a psychiatric ormental health designationOther definition of Medicaidmental health providerAny provider providing amental health serviceProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationAny provider providing amental health serviceOther definition of Medicaidmental health providerAny provider providing amental health serviceProviders with a psychiatric ormental health designationOther definition of Medicaidmental health providerNo No NoYes Yes YesYes No Yes 2No No NoYes 3 No NoNo No NoNo No NoNo No NoNo No NoYes No NoNo No YesNo No NoYes No YesNo No NoYes No YesNo No NoYes Yes YesProviders with a psychiatric ormental health designationYes No YesAny provider providing a Yes No Nomental health service 4Providers with a psychiatric or No No Nomental health designationProviders with a psychiatric ormental health designationNo Yes NoMedicaid mentalhealth providerspaid differentlythan otherMedicaid providersSee notes at end of table.ContinuedAdministration of Mental Health Services by Medicaid Agencies 23

Table 4: Medicaid Mental Health Providers, continuedState Provider definition Must be certifiedor enrolled throughthe mental healthagencyMedicaid mentalhealth providersare capped interms of yearlyreimbursementTotal 22 7 20Medicaid mentalhealth providerspaid differentlythan otherMedicaid providersTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyomingAny provider providing amental health serviceAny provider providing amental health serviceProviders with a psychiatric ormental health designationOther definition of Medicaidmental health providerProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationProviders with a psychiatric ormental health designationYes No YesNo No YesNo No Yes 2No No NoNo No NoYes Yes YesNo No NoNo No NoYes No NoNR = No response1For some providers.2Providers paid differently for some Medicaid populations.3For the Community Psychiatric Rehabilitation (CPR) and Comprehensive Substance Treatment & Rehabilitation (CSTAR) programs only.4Only physicians may be providers.As noted in the beginning of the chapter,States also have flexibility to delegate theresponsibility of certifying and enrolling providersto agencies other than the Medicaidagency. Twenty-two States require some or allMedicaid mental health providers to beenrolled or certified through the mentalhealth agency. States with a more restrictivedefinition of mental health providers (onlythose with a psychiatric or mental health designation)are less likely to require providersto be enrolled or certified through the mentalhealth agency. Only 31 percent of States withthe restrictive definition require certificationor enrollment through the mental healthagency, compared to 56 percent with thebroader definition and 62 percent of theStates with an “other” definition.States where the mental health agency hasthe authority to set at least some rates weremore likely to require providers to be certifiedor enroll through the mental health agency.More than half of the States (52 percent)reporting that the mental health agency hasrate-setting authority required providers toenroll through the mental health agency,while only 35 percent of the States where themental health agency had no rate-settingauthority required this.Only seven States reported capping theamount of reimbursement that a mentalhealth provider can receive per year from24 Administration of Mental Health Services by Medicaid Agencies

Medicaid. States using broader or morerestrictive definitions were equally likely touse a cap.In 20 States, mental health providers arepaid differently than other providers. In nineStates, mental health providers submit theirclaim to and are paid by the mental healthagency, rather than the Medicaid agency. 16 InOhio, for example, county-level mentalhealth authorities pay the claim for communitymental health services and file for reimbursementfrom Medicaid through the mentalhealth agency. In 10 States, some or all mentalhealth providers are paid through abehavioral health organization (BHO) or anadministrative services organization (ASO)rather than directly through the Medicaidclaims processing system. These types oforganizations are discussed further in themanaged care section below.States using a broader provider definitionare more likely to pay Medicaid mentalhealth providers differently from other Medicaidproviders than are States using a morerestrictive definition: 56 percent using abroader definition as opposed to 38 percentusing a more restrictive definition and 31percent using an “other” definition.5. Managed CareAs of June 30, 2005, nearly 63 percent ofMedicaid beneficiaries were enrolled in someform of managed care, with almost halfenrolled in prepaid capitated plans in which16In most of these States, all mental healthclaims are paid through the mental healthagency. However, in two States, only certainmental health services are paid through themental health agency (for example, rehabilitationservices or services for children inState custody), while all other mental healthclaims are paid the same as nonmentalhealth claims.the health plan was at risk for some or allMedicaid services (Centers for Medicare &Medicaid Services [CMS], 2005).The survey asked about two types of organizationsthat might provide behavioralhealth care differently than other Medicaidservices: BHOs, in which the State makescapitated payments to organizations that areat risk for the services they provide, andASOs, which administer services on a fee-forservicebasis, but are not at risk if needed servicesexceed State payments. 17 Twenty-sixStates reported that the State contracts with aBHO or ASO for mental health service delivery.(See Appendix A, Table A.3, for Statespecificinformation.)The survey also asked whether any mentalhealth services or populations were carvedout of Medicaid managed care contracts and,if so, which services or populations werecarved out. The survey did not ask systematicallyabout the nature of these Medicaidmanaged care contracts or how the “carvedout” services or populations were dealt with.In some cases, the respondents were referringto general Medicaid managed care contracts,and the “carved out” services or populationswere dealt with in the Medicaid fee-for-serviceprogram or in BHOs or ASOs. In others,the respondents were referring to BHO andASO contracts, and the “carved out” servicesare behavioral health services that remain inthe Medicaid fee-for-service program.A number of States reported that mentalhealth services were carved out of Medicaidfee-for-service and managed care, and thatthe mental health agency itself (or county/local mental health agencies) acted as a plan17Some ASO administrative payments may beat risk if the ASOs do not meet administrativeor other performance standards establishedin their contracts with the State.Administration of Mental Health Services by Medicaid Agencies 25

in providing Medicaid mental health services,with funding from Medicaid. In other States,the mental health agency contracted withindependent managed care organizationsrather than acting as a plan and deliveringservices on its own, again using funding fromMedicaid.Twenty-three of the 26 States using a BHOor ASO reported that they do not deliver servicesto all Medicaid mental health beneficiariesin the same way, excluding at least someMedicaid mental health services or populationsfrom the BHO or ASO or from broaderMedicaid managed care programs. Theseexcluded services or populations are coveredin the regular Medicaid fee-for-serviceprogram.Of the 25 States that reported not using aBHO or ASO to deliver mental health services,11 carve out or exclude at least somemental health services or populations frombroader Medicaid managed care programs.Only 10 States do not use either a BHO oran ASO for mental health services, nor dothey carve out any mental health services orpopulations from general Medicaid managedcare programs, thus covering these servicesand populations in the same way as all otherMedicaid services and populations.C. Data Collection and ReportingAs noted earlier, every State Medicaid program,as a condition of receiving Federalmatching funds, must collect enrollment andclaims data in a Medicaid ManagementInformation System (MMIS) in standardizedformats specified by CMS, and it must reportspecified data to CMS electronically throughthe Medicaid Statistical Information System(MSIS). 18 Individual States may also requirethe Medicaid program to report certainfinancial or programmatic data to the Statelegislature or the general public.1. Reports on Medicaid Mental HealthServicesEighty percent of the States (40) reportedthat their Medicaid agencies produce formalreports containing discrete data on mentalhealth utilization or expenditures (Table 5).Of the remaining States, eight reported thatthe mental health agency produces thesereports, two reported that neither the Medicaidagency nor any other State agency producesreports that break out the utilization orcost of mental health services within the StateMedicaid program, and one did not reportthe information.These reports most commonly contain thenumber of beneficiaries utilizing mentalhealth services (in 32 States), followed by utilization(30 States), utilization by service andcost by service (29 States), and cost per beneficiary(26 States). In 22 States, the Medicaidagency produces these reports monthly; in 6States, annually; in 5 States, quarterly; and in1 State, semiannually. There are four States inwhich the Medicaid agency produces reportson mental health services only on an “asneeded” basis.In eight States, all reports produced byMedicaid about mental health services arepublicly available, while in seven States,reports are only available internally. Most(22 States) have a mix of publicly availableand internal-only reports. Of the 29 States inwhich some or all of the mental health servicesreports are available only internally, thereare 26 in which the Medicaid agency sharesthe report with other State agencies.18Social Security Act, Section 1903(r)(1).26 Administration of Mental Health Services by Medicaid Agencies

Table 5: Formal Reports on Medicaid Mental Health ServicesMedicaid mentalhealth reportsare generatedby other StateagenciesInternal reportsare shared withother agenciesType of reportFrequencyof reportReport ContentsOtherCost by serviceCost perbeneficiaryUtilizationby serviceUtilizationNumber ofbeneficiariesThe Medicaidagency producesreports in whichthere is discrete dataincluded on mentalhealth utilization orexpendituresState32YesNoYesNRYesNoNRYesNoYesYesNoNRYesNoNoYesNRYesYes25YesYesYesNR—YesYesYes—YesYesNoNR—Yes——No——Internal onlyMix of public and internalMix of public and internalNR—Mix of public and internalMix of public and internalInternal only—Mix of public and internalMix of public and internalMix of public and internalNR—Mix of public and internalPublicly available only—Internal onlyPublicly available only—As neededMonthlyMonthlyNR—AnnuallyMonthlyQuarterly—As neededMonthlyMonthlyNR—MonthlyQuarterlyMonthlyMonthlyMonthly—14NoNoNoNR—NoYesNo—NoYesYesNR—NoNoNoNoYes—29NoNoYesNR—NoYesYes—YesYesNoNR—YesYesNoYesNo—26YesNoYesNR—YesNoYes—YesNoNoNR—YesYesYesYesYes—29YesYesYesNR—YesNoYes—YesYesYesNR—YesNoNoYesNo—30YesYesYesNR—YesNoYes—YesNoYesNR—YesYesNoYesNo—32YesYesYesNR—YesNoYes—YesYesYesNR—YesNoYesYesYes—40YesYesYesNRNoYesYesYesNoYesYesYesYesNoYesYesYesYesYesNoTotalAlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareDistrict of ColumbiaFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineSee notes at end of table. Continued28 Administration of Mental Health Services by Medicaid Agencies

Table 5: Formal Reports on Medicaid Mental Health Services, continuedMedicaid mentalhealth reportsare generatedby other StateagenciesInternal reportsare shared withother agenciesType of reportFrequencyof reportReport ContentsOtherCost by serviceCost perbeneficiaryUtilizationby serviceUtilizationNumber ofbeneficiariesThe Medicaidagency producesreports in whichthere is discrete dataincluded on mentalhealth utilization orexpendituresStateTotal4032 30 29 26 29 142532YesYesYesNRYes—NRYes—Publicly available only—Mix of public and internalInternal only—Quarterly—AnnuallySemi-Annual—No—NoNo—Yes—YesYes—Yes—NoYes—Yes—NoYes—Yes—NoYes—Yes—NoYesNoYesNoYesYesMarylandMassachusettsMichiganMinnesotaMississippiYesYesNoYesNoNoYesYesYesNoYesYesNRYes—YesYesYes——YesYes—YesYesYesNR—Publicly available onlyMix of public and internalMix of public and internalMix of public and internalPublicly available only—Mix of public and internalInternal onlyPublicly available onlyMix of public and internalMix of public and internalMix of public and internalMix of public and internal—MonthlyMonthlyMonthlyMonthlyMonthly—MonthlyAnnualMonthlyMonthlyAs neededQuarterlyMonthly—YesNoYesYesNo—NoYesYesYesYesNoNo—YesYesYesYesYes—YesYesNoYesYesYesNo—YesNoYesNoYes—YesYesNoYesNoYesYes—YesYesYesYesYes—YesYesNoNoYesYesNo—YesYesYesYesYes—YesYesYesYesNoYesNo—YesYesYesYesYes—YesYesYesNoNoYesYes—YesYesYesYesYesNoYesYesYesYesYesYesYesNoMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaSee notes at end of table. ContinuedAdministration of Mental Health Services by Medicaid Agencies 29

Table 5: Formal Reports on Medicaid Mental Health Services, continuedType of reportInternal reportsare shared withother agencies25—YesNo——YesYes—YesYesYesYesFrequencyof reportReport ContentsMedicaid mentalhealth reportsare generatedby other Stateagencies32YesYesYesYesYesNoYesYesYesNRNoYesOtherCost by serviceCost perbeneficiaryUtilizationby serviceUtilizationNumber ofbeneficiariesThe Medicaidagency producesreports in whichthere is discrete dataincluded on mentalhealth utilization orexpendituresStatePublicly available onlyMix of public and internalInternal only——Internal onlyMix of public and internalPublicly available onlyMix of public and internalMix of public and internalMix of public and internalMix of public and internalAnnuallyMonthlyAnnually——As neededQuarterlyAnnuallyMonthlyMonthlyAnnuallyMonthly14NoNoYes——NoNoNoYesNoNoYes29NoYesYes——YesYesYesNoYesYesYes26YesYesNo——YesNoNoNoYesYesYes29YesYesNo——YesYesYesNoYesYesYes30YesYesNo——YesYesYesNoYesYesYes32YesYesNo——YesYesYesNoYesYesYes40YesYesYesNo 1NoYesYesYesYesYesYesYesTotalRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyomingNR = No responseTennCare incorporates reports from the mental health agency on these topics in the quarterly report that is submitted to CMS.130 Administration of Mental Health Services by Medicaid Agencies

The other agency that most commonlyproduces reports on Medicaid mental healthservices utilization or expenditures is childrenand family services (five States). There are 32States where an agency other than the Medicaidagency produces reports on Medicaidmental health services. In addition to theinformation on Medicaid mental health services,these reports may include breakdownson case histories and outcomes, as well asservice users.3. Data SharingMore than three-quarters of the States makedata from the MMIS available to the mentalhealth agency for analysis. The organizationalstructure of the Medicaid and mentalhealth agencies within the State governmentdoes not affect the likelihood of sharingMMIS data, but the ability of the mentalhealth agency to set rates does (Figure 2):mental health agencies with the authority toset rates are much more likely to have accessto the MMIS than mental health agencieswith no such authority (88 vs. 65 percent).In 40 States, the MMIS is used for theanalysis of mental health service utilization,either by the Medicaid agency or anotherState agency. It is used somewhat less frequentlyto link to client-level data for administrativepurposes (34 States), or to link toclient-level data for policy analysis (32States).In a little less than half of the States, theMedicaid agency has integrated or linked itsclient data sets with those of other agencies(Table 6), most commonly the State mentalhealth agency. The organizational structurehas little effect on whether Medicaid links itsclient data sets with the mental health agency:slightly less than one-third of all States doso, regardless of whether the agencies arewithin the same umbrella organization. (SeeAppendix A, Table A.5, for State-specificinformation.)Table 6: Integrated Data SetsMedicaid Agencies That Have Linked ClientData Sets25Linked to client data sets at….Mental health agency 16Social services agency 11Children and family services agency 10Corrections agency 7Health department 7Substance abuse agency 7Juvenile justice agency 4Education department 3Budget office staff 2State legislative staff 2Governor’s office staff 1Other 14. Data Sharing and Rate-Setting AuthorityThe MMIS is available more often to mentalhealth agencies that have rate-setting authoritythan to those without that authority. However,States in which the mental health agencysets some Medicaid rates actually are lesslikely to link Medicaid and mental healthdata sets at the client level than those inwhich the mental health agency sets no rates(20 vs. 42 percent). This low percentage suggeststhat a basic level of access to Medicaiddata on service utilization rates and paymentto providers is needed for the mental healthagency to participate in setting Medicaidrates but that more detailed linking at the clientlevel may be less necessary. Client-leveldata linking is more likely to be needed foranalysis of clinical issues and to determinewhether particular types of clients are overorunderusing services, so mental healthagencies that focus more on these issues thanon issues of provider payment may be moreinclined to seek the extra step of linkingMedicaid and mental health data at the clientlevel.Administration of Mental Health Services by Medicaid Agencies 31

5. Uses of DataState reports of data use varied greatly. SeveralStates echoed the sentiments of one, thatthey are “very data driven,” while othersnoted that “data is always a struggle” orthat they have “definitely got too much[data]” but not enough staff to utilize thedata fully. Two States mentioned that theydo not use data at all. The majority ofStates reported recent efforts to improvetheir data. More than two-thirds of theStates (36) reported improving the availabilityor the quality of Medicaid mentalhealth data during the past 3 years, althoughthese improvements generally have been targetedat all Medicaid data rather than juston mental health. Many mentioned futureplans, including building data warehouses,creating integrated databases, and purchasinga new MMIS.The most common use of Medicaid mentalhealth data is in reports. Almost 80 percentof State Medicaid agencies currentlyproduce formal reports containing a considerablerange of information, most commonlythe various dimensions of cost and utilization.Most States said that they also usethese data for operational purposes, such asbudgeting and rate setting. Several Statesreported using data for analysis: to betteranalyze who was using which mental healthservices as a way to understand gaps in careand underserved populations. A few notedthat they use data for policy setting as well.One State reported that its mental healthauthority uses Medicaid claims data tomonitor the effects of policy changes byexamining utilization of relevant services.Another noted that it is “trying to promotecommunity health” by marrying outcomesdata to utilization data to find best practicesthat will influence policy. Yet anotherState said that its Medicaid agency usesMMIS data to look at individuals withchronic illnesses and behavioral healthissues and that it tries to unite existingpolicies to streamline processes.D. SummaryOrganizational Structure. State Medicaid andmental health agencies are within the sameumbrella agency in 28 States and are separatein 23 States. Seven States reported havingmore than one State-level mental health agency.In the vast majority of States, two orfewer reporting levels separate the Medicaiddirector from the Governor.Funding and Providers. In 32 States, theState match for Medicaid mental health servicescomes at least partially from the mentalhealth agency. In 22 States, some funding forMedicaid mental health services comes fromcounties or other local sources. In 23 States,the Medicaid agency has a separate line itemin the budget for mental health services. Inalmost half of the States, the mental healthagency has the authority to set some Medicaidmental health rates, most commonly forresidential treatment, psychiatric social workers,targeted case management, and psychosocialrehabilitation.Managed Care. Twenty-six States reportedthat at least some Medicaid mental healthservices or populations are covered throughBHOs or ASOs. Of the 25 States that reportnot using a BHO or ASO, 11 carve out orexclude at least some mental health servicesor populations from broader Medicaid managedcare programs. There are only 10 Statesthat do not use any of these managed carearrangements.Data and Reporting. Forty States reportedthat their Medicaid agencies produce formalreports containing discrete data on mental32 Administration of Mental Health Services by Medicaid Agencies

health utilization or expenditures, includingutilization and cost by service (29 States) andcost per beneficiary (26 States). In 27 States,the mental health agency produces reports onMedicaid mental health spending or utilization.At least some of these reports are publiclyavailable in 30 of the States, while in 7States all reports are internal only.Administration of Mental Health Services by Medicaid Agencies 33

III. Medicaid Agency Collaboration With Mental Health AgenciesStates differ in the degree to which the State Medicaid agenciescollaborate with mental health agencies. As noted in the previouschapter, States have the flexibility to allow agencies other than thesingle State Medicaid agency to administer aspects of the Medicaid program,as long as the Medicaid agency retains overall responsibility. To the extentthat States have elected to have the mental health agency administer Medicaidservices, certify and enroll providers, pay claims, and establish policy,collaboration between the two agencies is an important aspect of Medicaidadministration of mental health services. The survey asked Medicaid agenciesabout the extent of formal collaboration between the two agencies, aswell as joint participation in policy-making groups and other less formalindicators of collaboration. This section summarizes these responses, as wellas responses to more open-ended questions about collaboration.A. Measures of Collaboration these activities, and 15 States reported thatThe survey asked a number of questions thatthe agencies collaborate occasionally. Nonecan be used to assess the type and degree ofof the States reported that the Medicaid andcollaboration that exists between Medicaidmental health agencies never collaborate.and mental health agencies. The results are2. Staff Meetingssummarized below.1. External CollaborationSlightly more than half of the States reportedthat the Medicaid and mental health agenciesfrequently collaborate on external meetings,public reports, or presentations to the legisla­ture (Table 7). Nine States reported that theagencies collaborate somewhat regularly onOne-third of the States (17) hold weekly orbiweekly meetings between the Medicaid andmental health agency staffs. Another 11States reported monthly meetings; 6 Statesreported quarterly meetings; and one Statereported biannual meetings. The staffs meeton an “as needed” basis in the remaining 13States.Administration of Mental Health Services by Medicaid Agencies 35

Table 7: CollaborationMental Health Representation on MCACType of RepresentativeOtherMentalhealthdepartmentProviderConsumerAt least oneslot reservedfor mentalhealthrepresentativeon MCAC 1Medicaidagencyparticipates indevelopmentof mentalhealth planMedicaidagency isrepresentedon Statemental healthplanningcouncilMedicaid staffmember who isthe point personon mentalhealth issuesDirectorsof the twoagencieshave regularlyscheduledmeetingsHow often arethere regularlyscheduledmeetingsbetween staffat the twoagencies?How often dothe Medicaidand mentalhealth agenciescollaborate?State61222123236423734TotalYesYesYesYesYesYesYesYesNoQuarterlyFrequentlyAlabamaNoNoYesNoYesYesYesYesYesWeekly orbiweeklyFrequentlyAlaska————NoYesYesYesNoQuarterlySomewhatRegularlyArizonaNRNRNRNRNRNRYesYesNRMonthlyNRArkansasNRNRNRNRNRNoNoYesYesMonthlySomewhatRegularlyCaliforniaNoNoYesNoYesNoYesYesNoAs neededOccasionallyColorado————Other 2NRYesYesYesAs neededFrequentlyConnecticutNoYesNoYesYesYesYesNoYesBiannuallyOccasionallyDelawareNoYesNoNoYesNoNoYesYesQuarterlyOccasionallyDistrict ofColumbiaNRNRNRNRNRYesYesYesYesWeekly orbiweeklyFrequentlyFloridaNoYesYesNoYesYesNoYesNoAs neededSomewhatRegularlyGeorgia————NoNoYesNoYesQuarterlyOccasionallyHawaiiNRNRNRNRYesYesYesYesNRMonthlyFrequentlyIdaho————NoNRNRNoNoWeekly orbiweeklyFrequentlyIllinoisNoYesNoNoYesYesNoNoYesAs neededOccasionallyIndianaSee notes at end of table. Continued36 Administration of Mental Health Services by Medicaid Agencies

Table 7: Collaboration, continuedMental Health Representation on MCACType of RepresentativeOtherMentalhealthdepartmentProviderConsumerAt least oneslot reservedfor mentalhealthrepresentativeon MCAC 1Medicaidagencyparticipates indevelopmentof mentalhealth planMedicaidagency isrepresentedon Statemental healthplanningcouncilMedicaid staffmember who isthe point personon mentalhealth issuesDirectorsof the twoagencieshave regularlyscheduledmeetingsHow often arethere regularlyscheduledmeetingsbetween staffat the twoagencies?How often dothe Medicaidand mentalhealth agenciescollaborate?State612YesNo——22Yes—12Yes—3236YesNoNoYes42NoYes3734TotalYesYesMonthlyOccasionallyIowaYesNoMonthlySomewhatRegularlyKansas————NoYesYesYesYesWeekly orbiweeklyFrequentlyKentuckyNoNoNoYesYesYesYesYesYesWeekly orbiweeklyFrequentlyLouisianaNoNoNoNoYesYesYesNoYesYesYesYesNoYesNoYesOtherFrequentlyMaineYesNoWeekly orbiweeklyFrequentlyMarylandNoNoYesNoYesYesYesYesYesWeekly orbiweeklyFrequentlyMassachusettsNoNo——NoNoYesYesNo—YesYesYes—NoNoYesYesNoYesYesYesYesNoYesYesYesYesNoYesMonthlyOccasionallyMichiganYesNRNRFrequentlyMinnesotaYesNoQuarterlyOccasionallyMississippiNoNo 3Weekly orbiweeklyOccasionallyMissouriNoNo—YesNo—YesYes—YesNo—YesYesNoNoNoYesYesYesYesNoYesYesYesYesYesAs neededAs neededWeekly orbiweeklyOccasionallyFrequentlyOccasionallyMontanaNebraskaNevadaNoNoYesNoYesYesNRNoNoMonthlyOccasionallyNewHampshireSee notes at end of table. ContinuedAdministration of Mental Health Services by Medicaid Agencies 37

Table 7: Collaboration, continuedMental Health Representation on MCACType of RepresentativeOtherMentalhealthdepartmentProviderConsumerAt least oneslot reservedfor mentalhealthrepresentativeon MCAC 1Medicaidagencyparticipates indevelopmentof mentalhealth planMedicaidagency isrepresentedon Statemental healthplanningcouncilMedicaid staffmember who isthe point personon mentalhealth issuesDirectorsof the twoagencieshave regularlyscheduledmeetingsHow often arethere regularlyscheduledmeetingsbetween staffat the twoagencies?How often dothe Medicaidand mentalhealth agenciescollaborate?State612——22—12—3236423734TotalNoYesYesYesYesAs neededSomewhatRegularlyNew JerseyYesNoYesYesYesYesYesYesYesWeekly orbiweeklyFrequentlyNew Mexico————————NoNoYesYesYesYesYesYesYesYesMonthly 4OccasionallyNew YorkWeekly orbiweeklyFrequentlyNorth Carolina————————NoNoYesNoYesYesNoYesYesYesAs neededWeekly orbiweeklyFrequentlyFrequentlyNorth DakotaOhioNoYesYesYesYesYesYesYesYesWeekly orbiweeklyFrequentlyOklahomaNoNo—NoYes—YesYes—NoYes—YesYesNoNoYesYesNoYesYesNoYesNoYesYesYesMonthlyAs neededAs neededFrequentlyFrequentlySomewhatRegularlyOregonPennsylvaniaRhode IslandNoYesYesYesNoNoYesNoNoNoNoNoYesYesYesYesNoYesYesYesYesYesNoYesYesNoYesQuarterlyAs neededMonthlyFrequentlyOccasionallySomewhatRegularlySouth CarolinaSouth DakotaTennesseeNoNoYesYesYesNoYesNoYesYesYesNoYesYesYesYesNoNoMonthlyAs neededFrequentlySomewhatRegularlyTexasUtahSee notes at end of table. Continued38 Administration of Mental Health Services by Medicaid Agencies

Mental Health Representation on MCACType of RepresentativeOtherMentalhealthdepartmentProviderConsumerTable 7: Collaboration, continuedStateHow often dothe Medicaidand mentalhealth agenciescollaborate?How often arethere regularlyscheduledmeetingsbetween staffat the twoagencies?Directorsof the twoagencieshave regularlyscheduledmeetingsMedicaid staffmember who isthe point personon mentalhealth issuesMedicaidagency isrepresentedon Statemental healthplanningcouncilTotalVermontVirginiaWashingtonWest VirginiaWisconsinWyomingFrequentlyFrequentlyAt least oneslot reservedfor mentalhealthrepresentativeon MCAC 1Occasionally6NoNoFrequently12NoNo22YesYes12NoNo32YesYes—No—NoFrequently—Yes—NoNoYesYesYes No No NoNo— — — —SomewhatRegularlyAs neededWeekly orbiweeklyOtherWeekly orbiweeklyWeekly orbiweeklyWeekly orbiweekly34NoYesYesYesYesYes37YesYes— 5YesYesYes42YesYesYesYesYesYesNR = No responseMedical care advisory committee.No State medical care advisory committeeDirectors meet occasionally, but meetings are not regularly scheduled.Bimonthly.Not necessary, since the Medicaid director also served as the mental health agency director at the time of the interview.Medicaidagencyparticipates indevelopmentof mentalhealth plan36YesYesYesYesYesYes12345Administration of Mental Health Services by Medicaid Agencies 39

3. Director MeetingsRegularly scheduled meetings between thedirectors of the Medicaid and mental healthagencies occur in 34 States. According tointerviewees, directors tend to discuss largerpolicy issues, budgetary initiatives, servicesprovided under waivers, and various complianceissues, while the agency staff meetingsare more programmatic and administrative innature. One reviewer of a draft of this reportnoted that regular meetings of agency directorsmay not necessarily facilitate significantMedicaid-mental health collaboration if theymerely represent regular meetings of the executivestaff of umbrella agencies. Of the 34States reporting regular meetings of agencydirectors, 22 were States with Medicaid andmental health in the same umbrella agency.4. Advisory ActivitiesThirty-six States reported that the Medicaidagency participates in the development of theState Mental Health Plan. The Medicaidagency is represented on the State MentalHealth Planning Council (MHPC) in 42States, while fewer States (32) reserve a sloton the State Medicaid Medical Care AdvisoryCommittee (MCAC) for a mental health representative.Even in States that reserve a slot,the State mental health agency does not necessarilyparticipate; the slot was most frequentlyreserved for a mental health provider(in 22 States), followed by a consumer (12States) or mental health agency representative(12 States). 195. Medicaid Point Person on Mental HealthIssuesThirty-seven States have a Medicaid staffmember who serves as the “point person” onmental health issues. The responsibilities ofthese individuals vary greatly, intervieweessaid, with some focusing exclusively on mentalhealth and others having mental healthissues as only one segment of the many areasunder their purview. Interviewees generallysaw this role as important to increased communication,knowledge, and cooperationbetween the two agencies.6. Mental Health Policy Working GroupsJoint participation in formal and informalworking groups is widespread, although Medicaidagencies are more likely to participate ingroups formulating mental health policy thanthe reverse. Virtually every State (47) reportedthe existence of at least one formal or informalworking group that provides advice ordiscusses issues surrounding Medicaid mentalhealth policy. In the majority of cases (46States), these groups include representativesfrom entities other than State agencies, suchas community advocates or providers. FortyfourStates reported which State agencies participatein a total of 60 State work groups(Table 8). In most cases (38 States), at leastone work group has both Medicaid and mentalhealth agency participation. For all 60work groups, the most common participantsare the Medicaid and mental health agencies,followed by the children and family services,substance abuse, juvenile justice, and socialservices agencies. In some States, other agenciessuch as transportation, housing, labor, oraging participate. On average, six State agenciesparticipate in the work groups.19These figures do not add up to 32 becausesome States reserve more than one slot for differenttypes of mental health representatives.40 Administration of Mental Health Services by Medicaid Agencies

Table 8: Mental Health PolicyWorking GroupsTotal Working Groups 60Mental health agency 53Medicaid agency 52Children and family services 38Substance abuse agency 33Juvenile justice agency 25Social services agency 25Health department 22Education department 21Disabilities agency 21Special education 16Corrections agency 15Rehabilitation agency 13Governor’s office staff 7Budget office staff 6State legislative staff 6Other agencies 12a. Examples of What Working Groups DoA number of States have created workinggroups focused on integrating systems of carefor children who receive services from multipleState agencies, particularly those in thefoster care or juvenile justice systems. Someof these States gave the need to comply withthe Olmstead decision as the reason for creatinga work group to specifically addressmental health service coordination for children.20 In one State, the Medicaid and mental20In Olmstead v. L.C., 527 U.S. 581 (1999),the U.S. Supreme Court ruled that, under the1990 Americans with Disabilities Act, Statesare required to place persons with mentaldisabilities in community settings rather thaninstitutions when the State’s treatment professionalshave determined that communityplacement is appropriate, the transfer frominstitutional care to a less restrictive settingis not opposed by the affected individual,and the placement can reasonably be accommodated,taking into account the resourcesavailable to the State and the needs of otherswith mental disabilities.health agencies work together on severalcommon projects, including efforts to bring(or keep) home those children currently sentout of the State for services. In another State,a steering committee was created with theintent of focusing on a population ratherthan a service structure. This committee isparticularly valuable, the interviewee said,since the State’s Medicaid and mental healthagencies are no longer under the sameumbrella organization. Now, the intervieweesaid, “When there are problems, we have aforum to talk about them,” and each agencyis able to go back and implement the agreeduponsolution.Through one of its working groups, anotherState has created a protocol for childrenbeing removed from their homes. In suchcases, the mental health agency is notified 24hours prior to or within 24 hours of a childbeing removed, so that agency officials cancontact the home and the child to provideservices. This same State is working to bringmental health services into juvenile detentioncenters to serve children who may be “inlimbo” between the two systems. In yetanother State, the Medicaid and mentalhealth agencies work together through a children’spartnership to determine “how wisely[they] are spending [their State’s] mentalhealth dollars.” The partnership pulls togetherutilization data to find where money isspent and to determine whether collaborationcould reduce the duplication of services.In several States, formal or informal interagencyworking groups meet regularly to discussdifficult individual cases, often instanceswhen people fall through the cracks. Thesediscussions can lead to changes in procedures,policies, and organizational structuresto better address the larger problems highlightedby the specific cases.Administration of Mental Health Services by Medicaid Agencies 41

The Medicaid director in one State underscoredthe importance of working on commonproblems by contrasting the State’s differingexperiences with child and adultmental health services. In this State, Medicaidfunds services for almost all beneficiaries ofthe children’s mental health agency. Becausethe State Medicaid agency regularly dealswith the child mental health agency on manyongoing operational issues, these agencieshave a very strong relationship. As the Medicaiddirector put it, “We’re about as close asyou can be without becoming the same agency.”By contrast, the relationships betweenthe Medicaid agency and the adult mentalhealth agency are much more distant andwary, since Medicaid funds services for only30 to 40 percent of the adult mental healthagency’s clients, and the adult service providersand advocacy groups tend to be somewhatsuspicious of Medicaid.B. Some Patterns and CorrelationsNot surprisingly, States reporting that theirMedicaid and mental health agencies frequentlycollaborate on external projects alsoare more likely to hold regularly scheduledmeetings, while States reporting less collaborationare more likely to hold meetings “asneeded.” More than half (54 percent) of allStates where the agencies collaborate frequentlyhold weekly or biweekly meetingsbetween staff at the agencies, while fewerthan 13 percent of all States where agenciescollaborate somewhat frequently or occasionallyhold meetings that often. One-third ofthe States where collaboration is somewhatfrequent or occasional report that the agencieshold meetings only “as needed,” whileonly 19 percent of States that report frequentcollaboration say they meet only as needed.States where the Medicaid and mentalhealth agencies frequently collaborate onexternal projects also are more likely toreport that the Medicaid agency is representedon the MHPC (88 vs. 75 percent), participatesin the development of the State MentalHealth Plan (81 vs. 63 percent), and has astaff member as the point person on mentalhealth issues (85 vs. 58 percent). These Statesalso are more likely to report that the Medicaidagency reserves a slot for a mental healthrepresentative on the State MCAC (69 vs. 58percent).1. Impact of Agency Structure onCollaborationThe structure of the Medicaid and mentalhealth agencies within the State governmentcorrelates with the amount of reported internaland external collaboration (Figure 3).States where the Medicaid and mental healthagencies are within the same umbrella agencyare more likely to report frequent collaboration(57 vs. 43 percent), have directors whomeet regularly (79 vs. 52 percent), have meetingsbetween the agencies at least monthly(64 vs. 43 percent), and report Medicaid participationin the development of the StateMental Health Plan (82 vs. 57 percent).These States are only half as likely to reporthaving an interagency agreement or memorandumof understanding, perhaps becausesuch formal documents are less necessarywhen there is a common umbrella agency.The structure of the agencies within theState government does not correlate withwhether a slot is reserved for a mental healthrepresentative on the State MCAC. However,States where Medicaid and mental health areseparate agencies were somewhat more likelyto have a staff member serving as the pointperson on mental health issues within theMedicaid agency (78 vs. 68 percent) and to42 Administration of Mental Health Services by Medicaid Agencies

Administration of Mental Health Services by Medicaid Agencies 43

have the Medicaid agency represented on theState MHPC (87 vs. 79 percent).2. Rate-Setting Authority and CollaborationStates where the mental health agency has theauthority to set rates for at least one Medicaidmental health service are less likely toreport external or internal collaboration (Figure4). Fewer than one-third (31 percent) ofthe States where the mental health agency hasrate-setting authority reported frequent collaborationon external projects, while morethan two-thirds (69 percent) of the Stateswhere the mental health agency does nothave that authority report frequent collaboration.States where the mental health agencyhas rate-setting authority also are less likelyto report regularly scheduled meetingsbetween the agency directors (52 vs. 81 percent),or meetings at least monthly betweenthe two agency’s staffs (44 vs. 65 percent). Amental health agency with rate-settingauthority also was less likely to report thatthe Medicaid agency has a staff member whoserves as the point person on mental healthissues (60 vs. 85 percent), that Medicaid isrepresented on the State MHPC (76 vs. 88percent), or that a slot is reserved for a mentalhealth representative on the State MCAC(56 vs. 69 percent). However, both for Stateswhere the mental health agency has rate-settingauthority and for those that do not,there are roughly equal rates of Medicaidparticipation in the development of the MentalHealth Plan (72 vs. 69 percent).More than two-thirds of the respondentsfrom all States said that the relationshipbetween the Medicaid and mental healthagencies could be improved. States thatreported less frequent collaboration betweenthe agencies and those in which the mentalhealth agency has no authority to set anyMedicaid mental health rates are more likelyto think the relationship between the twoagencies could be improved.C. Other Factors AffectingCollaborationIn addition to the factors affecting collaborationthat were explicitly asked about in thesurvey, the interviews revealed a number ofother factors that can have an impact on collaboration.They are summarized below.1. Staff Movement Between AgenciesMany States noted that the movement ofstaff between the two agencies acts as anotherinformal collaborative device. Exampleswere cited of States where separate Medicaidand mental health agencies were previouslyunder the same umbrella agency and thereforevery familiar with the each other, whileothers are currently located in the same agency.However, this route to collaboration isnot always possible. One State respondentnoted that movement between agencies is discouragedby separate merit and promotionsystems. If employees from one agency transferto the other, they have to start over in themerit system and, in effect, suffer ademotion.2. State and Agency SizeAnother variable that appears to influencethe level of collaboration is the size of theState and the agencies within a State. Asnoted below, this relationship between Statesize and collaboration showed up more in theinterviews than in the formal measures ofcollaboration reported in the survey. In manyof the State interviews, the respondents fromsmaller agencies and less densely populatedStates reported a degree of informal collaborationthat appeared to exceed that describedby respondents from larger agencies andStates. In some cases, the collaboration44 Administration of Mental Health Services by Medicaid Agencies

etween the agencies is higher because oftheir physical office proximity, but moreoften than not this level of cooperationappears to be a product of their environment.One State respondent said, “Because we’re asmall State, we all know each other in termsof our entire lives.” As a result, “we haverelationships where [the Medicaid directorcan] just pick up the phone and work it out”if a problem arises. The respondent in anotherState said that the two agencies have an“excellent working relationship” because“we’re a small handshake State.” Anotherrespondent from a small State said thatbecause “everyone in this State knows everyoneelse,” if there is a problem it will beaddressed.This relationship between collaborationand State size was difficult to quantify withthe collaboration measures used in the survey,however. Small and large States wereequally likely to report “frequent” collaboration,and the smaller States tend to havefewer formal mechanisms to facilitate thatcollaboration, as seen in Figure 5. One interpretationis that degrees of collaboration arecontext-specific, so that what looks like frequentcollaboration in a large State may beviewed as just part of normal day-to-daybusiness in a small State. It may also be thecase that collaboration requires more formalmechanisms in large States than in smallones.3. Personal RelationshipsWhile the formal devices used to maintaincoordination between State mental healthand Medicaid agencies are helpful in facilitatingworking relationships, States reportedthat most relationships are dictated by moreinformal mechanisms. As one respondentsaid, “The informal is just as important asthe formal.” This respondent added thatwhen it comes to understanding how Medic-Administration of Mental Health Services by Medicaid Agencies 45

aid and mental health work together, muchof their collaboration is based on personalrelationships rather than formal structures.Numerous respondents noted that interagencyrelationships tend to fluctuate dependingon the compatibility of the agency leaders. Inone State, the Medicaid and mental healthdirectors, participating jointly in the phoneinterview, emphasized their strong personalrelationship by noting that they had hadThanksgiving dinner together. Although thisexample may not be typical, the importanceof strong personal relationships betweenagency heads was echoed in many other Stateinterviews.One respondent put it succinctly by reportingthat the agency leadership is “playingreally well together right now. It’s all aboutpersonalities, and right now it’s good.” Arespondent from another State remarked thatthe relationship between the two agencies is“at an all-time high” but that things were abit adversarial before the two current directorswere in place. Similarly, the respondentfrom another State discussed the troubledrelationship between the two agencies 4 yearsago, but said that the current directorsworked well together.The survey results may actually understatethe importance of these relationships, sincenone of the questions explicitly addressed thisissue. One reviewer of a draft of the reportnoted that as Medicaid director he met fairlyoften with the mental health director in informalsettings in which policy issues were discussed(breakfast, lunch, dinner), but he didnot think of these as “regularly scheduledmeetings” when responding to the surveyquestion on meetings between agency heads.relationships between State Medicaid andmental health agencies, noting that theycould sometimes lead to heightened tensionsbetween the two agencies.D. SummarySlightly more than half of the respondentsreported that the Medicaid and mental healthagencies collaborate frequently through externalmeetings, public reports, or presentationsto the legislature. In terms of internal collaboration,17 States hold weekly or biweeklymeetings between the staff of the Medicaidand mental health agencies, and 18 otherStates reported less frequent but still regularlyscheduled meetings. Thirty-four States reportedregularly scheduled meetings between thedirectors of the Medicaid and mental healthagencies. Joint participation in formal workgroups is widespread, although the Medicaidagency is more likely to participate in groupsformulating mental health policy than thereverse. Several less formal factors affect collaboration,including staff movement betweenagencies, State and agency size, personal relationships,and Federal rules and limitations.4. Federal Rules and LimitationsMany respondents cited Federal Medicaidrules and limitations as important factors in46 Administration of Mental Health Services by Medicaid Agencies

IV. A Closer Look at Some Specific Types ofStatesAs indicated in the preceding chapters, States have taken a variety ofapproaches to providing mental health services through Medicaid.The relationship between the Medicaid and mental health agenciesand the degree of collaboration between them varies substantially from Stateto State. Some States make extensive use of the public mental health systemto administer Medicaid mental health services, while others largely bypassthe mental health system, choosing instead to treat mental health servicesin essentially the same way as physical health services within the Medicaidprogram.This chapter uses the State characteristicsand activities discussed in Chapters II and IIIto categorize States on two dimensions: bythe level of collaboration between Medicaidand mental health agencies, and by the relativeauthority of these agencies with respectto Medicaid-funded mental health services. Itthen looks at additional characteristics thatare associated with States that are at eitherend of the collaboration and authority spectrumsand examines how these States dealwith Medicaid managed care and other commonissues and projects.Looking at States that are at the ends ofthese spectrums can help to identify some ofthe strengths and limitations of differentState approaches to dealing with Medicaidand mental health services. States that maywant to move in different directions can seesome of the potential implications of doingso and can look to specific States as modelsof where they might want to go or avoidgoing.This chapter first describes the methodologythat was used to classify States on thedimensions of collaboration and authority,and then it looks more closely at how specificStates that fall on either end of the collaborationor authority spectrums deal with a varietyof Medicaid mental health service issues.Since the classifications are designed to identifydistinct State types, the majority of States(28) that fall closer to the middle of thesetwo spectrums are not discussed in this chapter.In addition, as discussed further below,the measures used to classify States haveinherent limitations, since a single survey cannotcapture or give appropriate weight to allof the variables that may be relevant in eachState or group of States.Administration of Mental Health Services by Medicaid Agencies 47

A. State ClassificationsThe State classifications were developed byusing clusters of characteristics that indicaterelatively higher or lower levels of collaborationand relatively higher or lower levels ofMedicaid agency authority over Medicaidmental health services.1. CollaborationFirst, five measures of “higher collaboration”and four measures of “lower collaboration”were identified, and States were ranked onthem. The measures are formal indicationsof both internal and external collaborationbetween the Medicaid and State mentalhealth agencies, as well as of data sharingbetween them. There are eight States whereat least four of the five higher-collaborationmeasures were present and eight States whereat least two of the four lower-collaborationmeasures and only one or fewer of thehigher-collaboration measures were present.These States were designated the highercollaborationand lower-collaboration States,respectively.There were 35 States that did not scorehighly on either the higher- or lowercollaborationmeasures, so they were notdesignated as either higher- or lowercollaborationStates.Limitations of the Collaboration Measures.Since the survey did not explicitly askrespondents to characterize the overall degreeof collaboration between Medicaid and mentalhealth agencies in their State, and sincerespondents generally are not familiar enoughwith other States to rank themselves on thisdimension, the measures outlined above arenecessarily indirect and incomplete. Theyindicate whether some formal structures thatcould facilitate collaboration are in place andwhether some specific kinds of collaborativeactivities have occurred, but they do not measureless formal activities such as ad hocmeetings or personal relationships betweenagency heads. In addition, since the surveyrespondents were primarily from the StateMedicaid agency, a different picture of thedegree of collaboration between Medicaidand mental health agencies in particularStates might result if respondents from Statemental health agencies were surveyed.2. AuthorityFive measures, shown below, measure theextent to which States have delegated significantaspects of the administration of Medicaidmental health services to the mentalhealth agency and are thus using the publicmental health system to some extent to deliv­“Higher-Collaboration” Measures• Regular meetings between agency directors• Meetings between agency staff either weeklyor more often• Self-reported “frequent” collaboration• One or more “very influential” work groups inwhich both agencies participate• Links between Medicaid and mental healthdata“Lower-Collaboration” Measures• Meetings between staff at the two agencieseither quarterly or less often• Self-reported “occasional” collaboration• Medicaid agency does not participate in thedevelopment of the State mental health plan• Medicaid agency does not make MMIS dataavailable to the mental health agency• No more than one “higher-collaboration”measure is present48 Administration of Mental Health Services by Medicaid Agencies

er Medicaid services. States where few ofthese measures are present appear not tohave delegated significant authority for mentalhealth services to the public mental healthsystem. The five States where all five measuresof delegation of Medicaid authority tothe mental health agency are present are classifiedas “lower Medicaid agency authority”States, while the four States where none ofthe measures is present are classified as“higher Medicaid authority” States.Most States fell between the two endsof the authority spectrum. Closer to the“higher Medicaid authority” end of the continuum,there are 7 States where only onemeasure of delegated authority is presentand 17 States where two of the five measuresare present. Closer to the “lower Medicaidagency authority” end of the continuum,there are 5 States where four of the fivemeasures of delegated authority are presentand 13 States where three of the five measuresare present.“Lower Medicaid Agency Authority” Measures• At least some funds for Medicaid mentalhealth services come from a source differentfrom other Medicaid funds• Mental health providers are paid differentlyfrom other providers• Mental health agency has authority to setmore than one rate or sets the capitationrate for mental health services• At least some mental health services or populationsare carved out of regular Medicaid• Mental health providers are certified orenrolled into Medicaid differently from otherproviders3. Summary of Collaboration and AuthorityClassificationsThere were 23 States that could be classifiedas being on the higher or lower end of thecollaboration or authority dimensions. Ingeneral, there did not appear to be a patternbetween level of collaboration and the levelof Medicaid authority. All States with lowerMedicaid authority over mental health serviceswere on neither the higher nor lower endof the collaboration spectrum; most Stateswith higher Medicaid authority were alsoneither higher- nor lower-collaborationStates, with only one higher-authority Statealso in the higher-collaboration category andone higher-authority State in the lowercollaborationcategory.The 23 States that fell at the higher orlower end of the collaboration or authoritydimensions were analyzed to explore whetherthey have other characteristics in common ormay have opportunities to work together onspecific issues or projects. Responses to theopen-ended questions on the survey wereused to obtain additional information on specificcollaborative activities or opportunities.This analysis is detailed in the remainder ofthis chapter.B. States with Relatively HigherLevels of Medicaid-Mental HealthAgency CollaborationThe eight States that were on the higher endof the collaboration dimension (Louisiana,Massachusetts, Nevada, New Mexico, NorthCarolina, Oklahoma, Pennsylvania, and Wisconsin)also have other features in common:■■The Medicaid and mental health agenciesare in the same umbrella agency in six ofthe eight States.All scored highly on other measures ofcollaboration:Administration of Mental Health Services by Medicaid Agencies 49

■– The Medicaid agency participates inthe development of the mental healthplan in all eight States.– A mental health slot is reserved onthe Medicaid Advisory Committeein six of the States, and in two it isexplicitly reserved for someone fromthe mental health agency.– All eight States have a Medicaid staffperson who is the point person formental health.The mental health agency does not setMedicaid rates in any of the eight States1. Managed Care for Medicaid-FundedMental Health Services in Higher-Collaboration StatesSix of the eight States that scored on thehigher end of the collaboration dimensionprovide some Medicaid mental health servicesthrough managed care arrangements: Massachusetts,Nevada, New Mexico, NorthCarolina, Pennsylvania, and Wisconsin. Allsix provide some mental health benefitsthrough a BHO 21 or ASO, and all of themhave some kind of Medicaid managed careprogram. Some mental health services orpopulations are carved out of general managedcare programs in all of these States,with services provided in either the Medicaidfee-for-service program or through a BHO orASO.Two of the States (Louisiana and Oklahoma)do not use a BHO or ASO to providemental health services and do not have anyother kind of Medicaid managed carearrangement for mental health services orpopulations.21Wisconsin has a BHO available only to childrenwith serious emotional disturbances.The process of designing, implementing,and managing various kinds of managed careprograms may provide opportunities for theMedicaid and mental health agencies to worktogether and better understand each other’spriorities and constraints. The survey did notexplore this issue in depth, however, so itprovides little direct evidence on the extent ornature of such collaboration.Looking at all States nationwide, there isno difference in the formal measures of collaborationbetween States reporting the useof a BHO or ASO to provide mental healthservices and those that do not, but these formalmeasures do not capture all forms of collaboration,and BHOs and ASOs are not theonly forms of managed care.2. Other Common Issues and ProjectsIn addition to managed care, some of theseStates have other major projects that provideopportunities for the agencies to worktogether. New Mexico, for example, hasundertaken a major government reorganizationaimed at coordinating all State-providedmental health services more effectively. TheNew Mexico Behavioral Health PurchasingCollaborative is a cross-agency work groupthat serves as an umbrella connecting allagencies and departments dealing withbehavioral health. It was created to plan,design, and direct a statewide behavioralhealth system. The main Collaborative bodyis composed of the secretaries and directorsof 17 State agencies and departments 22 who22The departments include the Children,Youth, and Families Department; theCorrections Department; the Departmentof Health; the Department of Labor;the Department of Transportation; theGovernor’s Commission on Disability; theHuman Services Department; and the IndianAffairs Department.50 Administration of Mental Health Services by Medicaid Agencies

have decision-making authority regarding alldepartment funding, staff, and activities.Functioning as a board of directors, the Collaborativeoversees all behavioral health servicesspending across departments. The Collaborativenegotiates with contractors;addresses issues relating to data, transportation,financing, policy, and workforce development;facilitates interagency transfers; andcoordinates with the Local CollaborativeRegional Teams to identify service needs. Awholly integrated system is expected by2009, after a three-phase transformation. 23In North Carolina, a working group focuseson integrating mental health and physicalhealth care for children. The group discussespolicy changes, which then go to a physicianadvisory group prior to public comment.Nevada and Massachusetts have workinggroups focused primarily on Medicaid mentalhealth redesign.In Wisconsin, the mental health and Medicaidagencies work jointly on a statewidetask force to educate people on mental healthrecovery, as well as on the State’s SAMHSAmental health transformation grant.■■■■■■The Medicaid and mental health agenciesare under the same umbrella agency inonly two of the eight States.The mental health agency certifies orenrolls Medicaid mental health providersin only one of the States.The mental health agency produces reportsabout Medicaid mental health services inonly three of the States.Of the seven States where the Medicaidagency produces mental health reports,only two share those internal reports withthe mental health agency.The directors of the Medicaid and mentalhealth agencies do not meet regularly infour of the States, and in the other fourthe directors meet only in the context oflarger meetings involving multiple agencyheads or other staff.The lower-collaboration States tend to besmaller, with an average population of 1.8million, compared to higher-collaborationStates that have an average population of5.7 million.C. States with Relatively LowerLevels of Medicaid-Mental HealthAgency CollaborationThe eight States that scored on the lower endof the collaboration dimension (Colorado,Delaware, the District of Columbia, Hawaii,Mississippi, Montana, South Dakota, andUtah) also have a number of features incommon:23For more details, see New MexicoBehavioral Health Purchasing CollaborativeExecutive Summary at http://www.state.nm.us/hsd/bhdwg/pdf/PurchCollExecSum.pdf.1. Managed Care for Medicaid-FundedMental Health Services in Lower-CollaborationStatesThere is relatively limited managed care forMedicaid-funded mental health services inthese eight States, a fact that may be relatedto their relatively lower levels of collaboration.Without these managed care arrangements,there is one less occasion for collaborativework.Only four of the eight States (Colorado,Delaware, Hawaii, and Utah) use a BHO orASO to deliver mental health services. Inthree of these four States, at least somemental health services or populations arecarved out of general Medicaid managed careAdministration of Mental Health Services by Medicaid Agencies 51

programs and are provided in either fee-forserviceMedicaid or through the BHO orASO. The four other States do not use aBHO or ASO to deliver any mental healthservices. However, the District of Columbiadoes provide Medicaid physical and mentalhealth services to Supplemental SecurityIncome (SSI) children through a capitatedmanaged care organization.Three of the eight lower-collaborationStates (Mississippi, Montana, and SouthDakota) did not have any form of capitatedcomprehensive Medicaid managed care programas of June 2005 (CMS, 2005). In theNation as a whole, only 15 States (30 percent)did not have such a program inmid-2005.2. Other Common Issues and ProjectsOnly two of the eight States (Hawaii andMississippi) reported that working groups areaddressing specific problems common toMedicaid and mental health. Two of theStates with working groups where both Medicaidand mental health agencies are represented(Delaware and Utah) reported that thegroups generally do not focus on specificcommon problems. None of these four Statesreported that the working groups are “veryinfluential.”The other four States either have no workinggroups (the District of Columbia andSouth Dakota), or have groups in which onlythe Medicaid agency (Colorado) or the mentalhealth agency (Montana) participate.Since 47 States reported having Medicaidand/or mental health working groups, thiswas not used as a separate measure of collaboration.It is therefore worth noting that twoof the four States without working groupsalso ranked lower on the collaborationdimension, further underscoring the apparentreduced level of collaboration in those States.3. Fragmentation of ResponsibilityIt is also worth noting that four of the eightStates with relatively lower levels of collaborationhad at least some fragmentation ofresponsibility within the mental healthagency:■■Three of the States (Delaware, Hawaii,and Montana) have more than one mentalhealth agency.Utah has only one State mental healthagency, but the Medicaid agency dealswith a number of strong county-level mentalhealth agencies more frequently thanwith the State agency, potentially creatinga similar fragmentation problem.D. States with Relatively HigherLevels of Medicaid Agency Authorityover Mental Health ServicesThe four States with relatively higher levelsof Medicaid agency authority over Medicaidmental health services, and correspondinglylower mental health agency authority (Arkansas,North Dakota, Oklahoma, and SouthDakota) have several other characteristicsworth noting:■■■■The Medicaid and mental health agenciesare under the same umbrella agency inonly two of the four States.Only two of the four have regularly scheduledmeetings monthly or more often, andonly two of the four have directors whomeet regularly.All four have a Medicaid staff memberwho acts as the “point person” on mentalhealth policy within the Medicaid agency.None of the Medicaid agencies reported aline item for mental health services in theMedicaid budget, and in only one State52 Administration of Mental Health Services by Medicaid Agencies

■■did the mental health agency fund Medicaidservices.Three of the four States gave the mentalhealth agency access to the MMIS, andone State reported that the Medicaid andmental health agencies linked client-leveldata.In two of the four States, the mental healthagency produces reports on Medicaid mentalhealth services.■ All four States had populations of lessthan 4 million.One of these States is in the lower-collaborationcategory (South Dakota), and one is inthe higher-collaboration category (Oklahoma).As noted earlier, these formal measuresof collaboration may not account fully forthe informal collaboration that can take placein smaller States. The seven States in this categoryof higher Medicaid agency authorityhave an average population of just 1.9 million,and the largest State has a population of3.5 million, compared to a median State populationof 4.2 million for all States.1. Managed Care for Medicaid-FundedMental Health Services in States with HigherMedicaid Agency AuthorityOnly one of the four States reported using aBHO or ASO to provide mental health services.In North Dakota, a commercial Medicaidmanaged care organization operating inthree counties provides both mental andphysical health services on a capitated basisto around 750 enrollees, or about 1.5 percentof the Medicaid population in the State.2. Other Common Issues and ProjectsNorth Dakota has a working group thatmeets primarily to discuss children’s mentalhealth issues, but it also serves as the defaultgroup when local and regional offices cannotsolve problems in individual cases.E. States with Relatively LowerLevels of Medicaid Agency Authorityover Mental Health ServicesThe five States in which the Medicaid agencyhas delegated relatively large amounts ofauthority for administration of Medicaidmental health services to the mental healthagency (California, Michigan, Ohio, Oregon,and Washington) have several other characteristicsworth noting:■■■■■■■In four of the five States, the mental healthagency is under the same umbrella agencyas the Medicaid agency.Four of the five States hold meetingsbetween Medicaid and mental health agencystaff monthly or more often, and all fivehave regularly scheduled meetings betweenthe directors of the two agencies.Only three of the five Medicaid agenciesare represented on the State Mental HealthPlanning Council, and only two have a“point person” on mental health issueswithin the Medicaid program.Three of the five States have a line item formental health services in the Medicaidbudget, and the mental health agencyfunds Medicaid services in four States.All five States allowed the mental healthagency to access the MMIS, although onlyone State had linked client-level databetween Medicaid and mental health.In four of the five States, the mental healthagency creates reports about Medicaidmental health data.These States tend to be larger, with anaverage population of 13.5 million, comparedto the median State population ofAdministration of Mental Health Services by Medicaid Agencies 53

4.2 million for all States, and three of theStates have more than 10 million people.1. Managed Care for Medicaid-FundedMental Health Services in States with LowerMedicaid Agency AuthorityThree of the five States (Michigan, Oregon,and Washington) reported using a BHO oran ASO to provide mental health services,and also reported that at least some mentalhealth services or populations are carved outof general Medicaid managed care contracts.The other two States (California and Ohio)reported not using a BHO or ASO for mentalhealth services.In California, Medicaid mental health servicesare administered through the mentalhealth agency and delivered by county mentalhealth departments that act as mental healthplans. All Medicaid mental health providersmust be employees or contractors of thecounties. In Washington, Medicaid mentalhealth services are provided through managedcare organizations called regional servicenetworks (RSNs). Capitated payments toRSNs cover services to Medicaid eligiblesthrough a county-based network of CMHCsand clinics. In Oregon, Medicaid mentalhealth services are administered by nine mentalhealth managed care organizations underan 1115 waiver.2. Other Common Issues and ProjectsSurvey respondents cited relatively few specificexamples of work on common projects inthese States. Oregon and Michigan respondentsmentioned that the Medicaid and mentalhealth agencies are jointly examining psychotropicand/or substance abuse drug prescribingpatterns.F. Some Patterns and CorrelationsWhile the States with relatively lower levelsof Medicaid authority over mental health serviceswere not more likely to be on the higher-collaborationend than the lower-collaborationend of that spectrum, they were in aposition to work together with the mentalhealth agency (they were in the same umbrellaagency in four of the five States), and therewere more indicators of collaboration inthese States (meetings, data sharing, funding)than in the States with relatively higher Medicaidagency authority. In addition, the factthat the Medicaid agency has delegated significantauthority for administration of Medicaidmental health services to the mentalhealth agency (one of the measures used toidentify States with lower Medicaid authority)suggests that the public mental health systemin these States has the infrastructureneeded to handle this responsibility.One of the notable characteristics of theStates on the opposite ends of the relativeMedicaid authority spectrum is the differencein average population sizes. Larger Statesappear to delegate more Medicaid authorityto the mental health agency, perhaps reflectingthe availability of a more well-developedpublic mental health system in those States.Several of the smaller States with relativelyhigher Medicaid agency authority, by contrast,said in the interviews that finding anadequate supply of mental health providers,particularly in rural areas, was a perennialproblem, suggesting a less-developed publicmental health system.Data sharing and reporting was notstrongly correlated with the level of relativeauthority. On both ends of the spectrum,most States gave the mental health agencyaccess to the MMIS, but not many linked54 Administration of Mental Health Services by Medicaid Agencies

client-level data between the Medicaid andmental health agencies.G. SummaryClassification Methodology. Eight States wereclassified as having relatively higher levels ofcollaboration between State Medicaid andmental health agencies and eight States ashaving relatively lower levels of collaboration,based on measures such as the numberof regular meetings, self-reported frequencyof collaboration, and sharing of data. FourStates were classified as having relativelyhigher levels of Medicaid agency authorityover Medicaid-funded mental health servicesand five States as having relatively lowerMedicaid agency authority, based on measuressuch as responsibility for mental healthservices funding, rate setting, and providercertification.One of the four States in which the Medicaidagency has delegated a relatively higherlevel of authority to the mental health agencywas in the higher-collaboration category andone was in the lower-collaboration category,while none of the five States with relativelyhigh Medicaid agency authority was in thehigher- or lower-collaboration categories.Higher-Collaboration States. The eightStates in the higher-collaboration categoryare more likely to have Medicaid and mentalhealth under the same umbrella agency. Themental health agency does not set Medicaidrates in any of these States. These States oftenhave specific projects on which both agencieswork, in some cases involving Medicaid managedcare.Lower-Collaboration States. The eightStates in the lower-collaboration category aremore likely to have Medicaid and mentalhealth in separate agencies and less likely tohave the mental health agency participate inthe certification of mental health providers orissuing reports. These States often are characterizedby a fragmentation of responsibilitywithin the State mental health agency, as wellas by few cross-agency working groups.States with Higher Medicaid AgencyAuthority. In the four States in which theMedicaid agency has relatively higher authorityover mental health services, the Medicaidand mental health agencies tend to operateseparately in a number of ways (fewer meetings,less mental health funding of Medicaidservices, separate agencies in two of theStates). There is very little managed care inthese States, and the populations are relativelysmall.States with Lower Medicaid AgencyAuthority. The five States with relativelylower Medicaid agency authority over mentalhealth services are more likely to have Medicaidand mental health under the sameumbrella agency (four of the five) and aremore likely to report several indicators ofcollaboration. Three of the five States reportedusing a BSO or ASO to provide Medicaidmental health services, and three of the Stateshave very large populations.Administration of Mental Health Services by Medicaid Agencies 55

V. Summary and ConclusionsThe survey of Medicaid directors conducted for this report representsa snapshot of Medicaid agency perspectives on Medicaid-fundedmental health services in the latter half of 2005 and early 2006.Many new Governors took office in 2007, new Medicaid and mental healthagency heads will be appointed, government reorganization will be on theagenda in many States, and Federal laws and regulations affecting Medicaidand mental health services will continue to be revised.What is reported here about individual Stateswill inevitably change and probably has doneso already in many States. The broader patternsthat have been identified also willchange, although perhaps more slowly. Whatis clear from the report, however, is thatStates have a wide array of options for dealingwith Medicaid-funded mental health services.What is likely to work best in an individualState inevitably will be a reflection ofthe history, current context, organizationalstructure, policy priorities, and leadershipgoals in that State. This report describes theMedicaid options States chose as of 2005 andprovides a resource for future State decisionmaking on these important issues.A. SummaryThe increasingly important role that StateMedicaid agencies have played in the administrationof State mental health servicesreflects the steady growth over the last threedecades in the share of public mental healthservices funded by Medicaid.This shift in funding responsibilities andthe addition of Federal Medicaid dollars hasled in many cases to greater total funding ofState mental health services than would otherwisehave been possible. It has also led insome cases to tensions between Medicaid andmental health agencies as Medicaid agencieshave sought to fit mental health serviceswithin Medicaid regulatory, funding, andprogram structures, while mental healthagencies have sought to preserve the flexibilityand clinical focus they believe is needed toprovide mental health services mosteffectively.SAMHSA commissioned the survey summarizedin this report to learn more aboutthe characteristics and implications of thisgrowing Medicaid agency responsibility formental health services. Some highlights fromthe survey and some of the patterns thatemerged from analysis of the results are summarizedbelow.1. Organization, Funding, Services,Providers, and Managed CareIn terms of organizational structure, StateMedicaid and mental health agencies are inthe same umbrella agency in 28 States andAdministration of Mental Health Services by Medicaid Agencies 57

are in separate agencies in 23 States. SevenStates reported having more than one Statelevelmental health agency. In the vast majorityof States, two or fewer reporting levelsseparate the Medicaid director from theGovernor.In terms of funding, the State match forMedicaid mental health services comes atleast partially from the mental health agencyin 32 States. In 22 States, some funding forMedicaid mental health services comes fromcounties or other local sources. In 23 States,the Medicaid agency has a separate line itemin the budget for mental health services. Inalmost half the States, the mental healthagency has the authority to set some Medicaidmental health rates, most commonly forresidential treatment, psychiatric social workers,targeted case management, and psychosocialrehabilitation.States were fairly consistent in their definitionof mental health services for Medicaidfunding purposes, with all States includingoutpatient services provided by psychiatric ordesignated mental health providers and morethan 80 percent of States including servicesprovided at community mental health centers(CMHCs), services provided under the rehabilitationoption, inpatient services in a psychiatrichospital, and inpatient mental healthservices in a general hospital.States tended to be somewhat restrictive intheir definition of mental health providers,with 26 States requiring that providers have amental health or psychiatric designation and22 States requiring some or all Medicaidmental health providers to be enrolled or certifiedthrough the mental health agency.Twenty-five States reported that at leastsome Medicaid mental health services orpopulations are covered through behavioralhealth organizations (BHOs) that provide servicesthrough a capitated managed carearrangement or through administrative servicesorganizations (ASOs) that provide theseservices on a nonrisk fee-for-service basis. Ofthe 26 States that report not using a BHO orASO, 12 carve out or exclude at least somemental health services or populations frombroader Medicaid managed care programs.Only 10 States use none of these managedcare arrangements.2. Data and ReportingForty States reported that the Medicaid agencyproduces formal reports that contain discretedata on mental health utilization orexpenditures, including utilization and costby service (29 States) and cost per beneficiary(26 States). In 27 States the mental healthagency produced reports on Medicaid mentalhealth spending or utilization. At least someof these reports are publicly available in 30of the States, while in 7 States all reports areinternal only.Over three-quarters of the States makedata from the Medicaid Management InformationSystem (MMIS) available to the mentalhealth agency for analysis. The data in theMMIS on Medicaid clients and services werelinked at the client level to mental healthagency client-level data in 16 States for eitheradministrative or policy analysis purposes.3. Collaboration Between Medicaid andMental Health AgenciesSlightly more than half of the States interviewedreported that the Medicaid agencyand mental health agencies collaborate frequentlythrough external meetings, publicreports, or presentations to the legislature.In terms of internal collaboration, 17States hold weekly or biweekly meetingsbetween the staff of the Medicaid and mentalhealth agencies, and 18 other States reported58 Administration of Mental Health Services by Medicaid Agencies

less frequent but still regularly scheduledmeetings. Thirty-four States reported thatthere were regularly scheduled meetingsbetween the directors of the Medicaid andmental health agencies.Joint participation in formal work groupswas widespread, although Medicaid wasmore likely to participate in groups formulatingmental health policy than the reverse.Thirty-six States reported that the Medicaidagency participates in the development of theState Mental Health Plan, and 37 States havea Medicaid staff member who serves as the“point person” on mental health issues. Aslot is reserved on the State Medicaid MedicalCare Advisory Committee (MCAC) for amental health representative in 32 States, butthe slot was usually filled by a provider or aconsumer representative rather than by a representativeof the State mental health agency.4. A Closer Look at Some Specific Types ofStatesA number of States could be identified asoutliers in terms of the degree of collaborationbetween Medicaid and mental healthagencies or the relative authority of the twoagencies over Medicaid-funded mental healthservices. The States on either end of thesespectrums illustrate some of the characteristicsand potential consequences of differentapproaches to Medicaid funding and administrationof mental health services.a. Higher-Collaboration StatesEight States ranked especially high on measuresof Medicaid and mental health agencycollaboration: Louisiana, Massachusetts,Nevada, New Mexico, North Carolina,Oklahoma, Pennsylvania, and Wisconsin.These States reported regular meetingsbetween agency directors and staff, “frequent”collaboration, one or more “veryinfluential” joint work groups, and linkedMedicaid and mental health data.These eight higher-collaboration States hadsome other characteristics worth noting,including having both agencies in the sameumbrella agency in six States.b. Lower-Collaboration StatesThere were eight States where collaborationbetween Medicaid and mental health agencieswas relatively low, based on low frequency ofstaff meetings, low self-reported levels ofcollaboration, no Medicaid participation indevelopment of the State mental health plan,no sharing of Medicaid data with the mentalhealth agency, and the absence of measuresof higher collaboration: Colorado, Delaware,the District of Columbia, Hawaii, Mississippi,Montana, South Dakota, and Utah.These eight lower-collaboration States alsohad other characteristics worth noting,including having the two agencies in separateState agencies in six of the States, regularmeetings between the agency directors in onlyfour of the States, and limited mental healthagency involvement in Medicaid mentalhealth provider certification and use of Medicaiddata.c. States with Higher Medicaid Agency AuthorityThere were four States where the Medicaidagency appeared to have a relatively higherlevel of authority over Medicaid mentalhealth services, based on limited mentalhealth agency authority over Medicaid mentalhealth rate setting and provider certificationand limited mental health agency fundingof Medicaid services: Arkansas, NorthDakota, Oklahoma, and South Dakota.These four States also had other characteristicsworth noting, including having Medicaidand mental health in the same umbrellaagency in only two of the States, havingAdministration of Mental Health Services by Medicaid Agencies 59

fewer meetings and other indicators of collaboration,and smaller populations.d. States with Lower Medicaid Agency AuthorityThere were five States in which the Medicaidagency appeared to have delegated a relativelyhigh level of authority over Medicaid mentalhealth services to the mental health agency,based on mental health agency authorityover rate setting and provider certificationand mental health funding of Medicaid services:California, Michigan, Ohio, Oregon,and Washington.These five States had other characteristicsworth noting, including having both agenciesin the same umbrella agency (four of the fiveStates), regular meetings of directors andstaff, mental health agency funding of Medicaidservices, and larger populations.B. ConclusionsAs States consider their options for modificationsin Medicaid agency responsibility formental health services, some conclusions thatemerge from analysis of the State surveyresponses may warrant special consideration.1. Importance of CollaborationCollaboration between Medicaid and mentalhealth agencies is important because of thesteadily increasingly role that Medicaid isplaying in financing mental health services inStates. Medicaid agencies may not have thesame level of clinical expertise and trust frommental health providers and beneficiaries asmental health agencies, and mental healthagencies may not have a full understandingor appreciation of the regulatory and fiscalconstraints under which Medicaid agenciesmust operate. It is important that both ofthese perspectives be reflected in State decisionmaking and management with respect toMedicaid-funded mental health services.The survey indicated that having bothMedicaid and mental health agencies underthe same umbrella agency is generally associatedwith collaboration, but that day-to-dayoperational factors such as meetings betweenagency directors and staff, common problemsto work on, the priorities of agency leadership,and personal relationships betweenagency leaders and staff often are just asimportant and can facilitate or impede collaboration,whether the agencies themselvesare in a common umbrella agency or areseparate.Funding and data-sharing arrangementsalso can facilitate or impede collaboration,but they tend to be a reflection of the collaborationthat already exists or is being developed,rather than independent drivers of collaboration.With leadership support forcollaboration between Medicaid and mentalhealth agencies, the needed funding and datasharingarrangements can be developed morereadily. If leadership support is lacking, theexistence of a funding and data-sharing infrastructurethat facilitates collaboration generallyis not sufficient to bring it about, excepton fairly routine and low-visibility issues.Nonetheless, having this infrastructure inplace can make collaboration more rapid andefficient if leadership support for such jointefforts develops.2. Implications of County and LocalResponsibility for Mental Health ServicesIn a number of States, counties and otherlocal governments have extensive responsibilityfor the administration and funding ofmental health services. The implications ofthis for relationships between State Medicaidand mental health agencies and for Medicaidresponsibility for Medicaid-funded mentalhealth services could not be fully explored inthe survey, given the complexity and State­60 Administration of Mental Health Services by Medicaid Agencies

specific nature of these State-local relationships.However, the interviews conducted inStates with significant local responsibility formental health services made it clear that anymodifications in State-level authority or fundingfor mental health services in such Statesmust take into account the ramifications ofthese changes for local levels of government.3. Implications for Reorganizations andWork on Common ProblemsThe survey indicated that, with few exceptions,reorganizations of State governmentare not driven primarily by concerns overrelationships between Medicaid and mentalhealth. Given the growing importance ofthose relationships, however, and the organizationaland management options availableto facilitate greater collaboration betweenMedicaid and mental health agencies, moreexplicit attention to these options may beappropriate when States are consideringreorganizations.Similarly, States facing policy decisionsabout issues where Medicaid and mentalhealth responsibility and expertise overlap—such as Medicaid managed care coverage ofmental health services, or design and managementof services for children with behavioralhealth problems or adults with both mentaland physical disabilities—can build on theexperience of other States that have madeeffective use of Medicaid and mental healthworking groups to deal with such issues.Administration of Mental Health Services by Medicaid Agencies 61

ReferencesBuck, J. A. (2003). “Medicaid health carefinancing trends, and the future of Statebasedpublic mental health services.”Psychiatric Services, 54(7), 969–975.Centers for Medicare & Medicaid Services(CMS). (2005). Medicaid managedcare enrollment report as of June30, 2005. Baltimore, MD: CMS, p.5. Available at https://www.cms.hhs.gov/MedicaidDataSourcesGenInfo/Downloads/mmcer05.pdf.Frank, Richard, & Sherry Glied. (2006a).“Change in mental health financing since1971: Implications for policymakersand patients.” Health Affairs, 25(3), pp.601–613.Frank, Richard, & Sherry Glied. (2006b).Better but not well: Mental healthpolicy in the United States since 1950.Baltimore, MD: The Johns HopkinsUniversity Press.Frank, Richard, Howard H. Goldman, &Michael Hogan. (2003). “Medicaid andmental health: Be careful what you askfor.” Health Affairs, 22(1), pp. 101–113.Mark, T. L., J. A. Buck, J. D. Dilonardo,R. M. Coffey, & M. Chalk. (2003).“Medicaid expenditures on behavioralhealth care.” Psychiatric Services, 54(2),pp. 188–194.Mark, T. L., R. M. Coffee, R. Vandivort-Warren, H. J. Harwood, E. C. King, &the MHSA Spending Estimates Team.(2005, March 29). “U.S. spending formental health and substance abusetreatment, 1999–2001.” Health AffairsWeb Exclusive, W5, pp. 133–142.National Association of State Mental HealthProgram Directors Research Institute(NRI). (2004). Closing and reorganizingstate psychiatric hospitals: 2003.State Profile Highlights, No. 04-13.Alexandria, VA: NASMHPD ResearchInstitute.New Freedom Commission on MentalHealth. (2003). Achieving the promise:Transforming mental health care inAmerica. Final report. DHHS Pub.No. SMA-03-3832. Rockville, MD:Department of Health and HumanServices.VanLandeghem, Karen. (2004). ReorganizingState health agencies to meet changingneeds: State restructuring efforts in 2003.Washington, DC: National GovernorsAssociation, Center for Best Practices.White, Justin, & Debra Draper.(2004). Review of the literature onadministration and policy developmentfor Medicaid mental health and substanceabuse services. Washington, DC:Mathematica Policy Research.Administration of Mental Health Services by Medicaid Agencies 63

Appendix AAdditional State-by-StateTablesAdministration of Mental Health Services by Medicaid Agencies 65

Table A.1: Medicaid Mental Health Services and SpendingWhich services?Inpatient mentalhealth—psychiatrichospitalInpatient mentalhealth—generalhospitalHome- andcommunity-basedservicesSchool-based7servicesRespite careIndividual, group, or8family therapyFamily supportservicesClinicalPhysician servicesServices ofother licensedprofessionalsMental health clinicOutpatient hospitalservicesPartial daytreatmentPsychosocialrehabilitationTargeted casemanagementPsychiatric socialworkersResidentialtreatmentThe mentalhealth agencysets Medicaidrates for someMedicaidmental healthservicesState46910107101691615161317NoNoNoYesNoNoNoNoNoNoNoNoYes8psychologistsYesYesYesYesNoNoNoNoYesNoYesYesYesYesNoYesYesYesYesYesYesYesYesYesYesNoYesYesYesYesYesYesYesYesYesYesYesYes—————————————————YesYesNoNoYesYesNoYesYesYesYesYesYesYesYesYesYesNoNoNoNoNoNoNoNoNoNoYesNoNoNoNoNoNo—————————————————NoYesNoNoNoNoNoNoNoYesNoNoNoYesNoNoYes—————————————————25YesYesYesNoYesYesNoYesNoTotalAlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareDistrict ofColumbia—————————————————NoNoNoYesNoNoNoNoNoNoYesNoYesNoYesYesYes——————————————————————————————————NoNoNoNoNoNoNoNoNoNoYesNoNoNoNoNoNoNoNoYesNoNoNoNoNoNoNoNoNoNoNoNoNoNo—————————————————NoNoYesNoYesYesYesNoNoYesYesNoYesYesYesYesYes——————————————————————————————————NoYesNoNoYesYesNoYesNoNoFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaSee notes at end of table. Continued66 Administration of Mental Health Services by Medicaid Agencies

Table A.1: Medicaid Mental Health Services and Spending, continuedWhich services?Inpatient mentalhealth—psychiatrichospitalInpatient mentalhealth—generalhospitalHome- andcommunity-basedservicesSchool-based7servicesRespite careIndividual, group,8or family therapyFamily supportservicesClinicalPhysician servicesServices ofother licensedprofessionalsMental healthclinicOutpatient hospitalservicesPartial daytreatmentPsychosocialrehabilitationTargeted casemanagementPsychiatric socialworkersResidentialtreatmentThe mentalhealth agencysets Medicaidrates for someMedicaidmental healthservicesState46910107101691615161317—————————————8psychologists————NoNoNoYesYesYesYesYesYesYesYesYesYesYesYesYesYes—————————————————YesYesYesNoNoYesYesNoNoNoNoYesYesYesYesYesYesNoYesNoNoYesNoYesNoNoNoYesNoYesNoYesYesNoNoNoNoYesNoYesNoNoNoNoYesNoYesYesYesNoNo—————————————————NoNoNoYesYesNoYesYesYesYesYesYesYesYesYesYesYes—————————————————25NoYesNoYesYesYesNoYesNoNoYesYesNoYesNoNoYesNoYesTotalMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraska—————————————————NevadaNoYesNoNoYesYesYesYesYesYesNoYesYesYesNoNoYesNew HampshireNoNoYesNoNoNoNoNoNoNoYesNoYesNoNoYesNoNew Jersey—————————————————New MexicoYesNoYesNoYesYesYesNoNoNoYesNoYesYesYesNoYesNew York—————————————————North Carolina—————————————————North DakotaNoNoNoNoNoNoNoYesYesNoNoNoNoNoYesNoYesOhio—————————————————OklahomaNoNoNoNoNoNoNoNoNoNoYesYesNoNoNoNoYesOregonSee notes at end of table. ContinuedAdministration of Mental Health Services by Medicaid Agencies 67

Inpatient mentalhealth—psychiatrichospitalInpatient mentalhealth—generalhospitalHome- andcommunity-basedservices469———NoNoNo———NoNoYes—————————Yes 2NoYes———NoNoYes——————NoNoNoSchool-based7services—No—No———Yes 1—No——NoRespite care10—Yes—No———Yes—No——NoTable A.1: Medicaid Mental Health Services and Spending, continuedWhich services?Individual, group,8or family therapyFamily supportservicesClinicalPhysician servicesServices ofother licensedprofessionalsMental healthclinicOutpatient hospitalservicesPartial daytreatmentPsychosocialrehabilitationTargeted casemanagementPsychiatric socialworkersResidentialtreatmentThe mentalhealth agencysets Medicaidrates for someMedicaidmental healthservicesState8psychologists—No—No———No—No——No10—No—No———No—No——Yes—Yes—No———No—No——No7—No—No———No—No——No10—Yes—No———No—No——Yes16—Yes—No———Yes—No——Yes9—No—No———No—No——Yes16—Yes—No———No—No——Yes15—Yes—No———Yes—No——Yes16—Yes—No———Yes—No——Yes13—Yes—No———No—No——Yes17—Yes—No———Yes—No——Yes25NoYesNoYesNoNoNoYesNoYesNoNoYesTotalPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming1Mental health centers contract with specific schools to provide some mental health services (not including special education).2Rates are set by both mental health and Medicaid agencies.68 Administration of Mental Health Services by Medicaid Agencies

Table A.2: Services Defined as Medicaid Mental Health Services for Rate-setting or State Budgeting PurposesStateInpatient mentalhealth services in ageneral hospitalInpatient mentalhealth servicesin a psychiatrichospitalOutpatientservices atcommunity mentalhealth centersOutpatient servicesprovided bypsychiatric ordesignated mentalhealth providersOutpatient mentalhealth servicesprovided by ageneral or familyphysicianPsychotropicdrugsServicesprovidedunder therehab optionTotal 43 46 49 49 31 39 46 25Alabama Yes Yes Yes Yes No Yes Yes NoAlaska No Yes Yes Yes Yes No Yes NoArizona Yes Yes Yes Yes Yes Yes Yes NoArkansas Yes Yes 1 Yes Yes Yes Yes Yes YesCalifornia Yes Yes Yes Yes No No Yes YesColorado Yes Yes Yes Yes Yes Other 2 Yes YesConnecticut Yes Yes Yes Yes No No Yes YesDelaware Yes Yes Yes Yes Yes Yes Yes YesDistrict of Columbia No Yes Yes Yes No Yes Yes NoFlorida Yes Yes Yes Yes No No Yes NoGeorgia Yes No Yes Yes Yes Yes Yes NoHawaii Yes Yes Yes Yes Yes Yes Yes NoIdaho Yes Yes Yes Yes Yes Yes Yes YesIllinois Yes Yes Yes Yes Yes Yes Yes NoIndiana Yes Yes Yes Yes Yes Yes Yes NoIowa Yes Yes Yes Yes Yes Yes Yes YesKansas Yes Yes Yes Yes No Yes Yes NoKentucky Yes Yes Yes Yes Yes Yes Yes YesLouisiana Yes Yes Yes Yes Yes Yes Yes NoMaine No Yes Yes Yes Yes Yes Yes NoMaryland No No Yes 3 Yes 3 No No Yes 3 NoMassachusetts Yes Yes Yes Yes No No No YesOtherservicesSee notes at end of table. ContinuedAdministration of Mental Health Services by Medicaid Agencies 69

Table A.2: Services Defined as Medicaid Mental Health Services for Rate-setting or State Budgeting Purposes,continuedStateInpatient mentalhealth services in ageneral hospitalInpatient mentalhealth servicesin a psychiatrichospitalOutpatientservices atcommunity mentalhealth centersOutpatient servicesprovided bypsychiatric ordesignated mentalhealth providersOutpatient mentalhealth servicesprovided by ageneral or familyphysicianPsychotropicdrugsServicesprovidedunder therehab optionTotal 43 46 49 49 31 39 46 25Michigan Yes Yes Yes Yes No No Yes YesMinnesota Yes No Yes Yes No Yes Yes NRMississippi Yes Yes 1 Yes Yes 4 Other 5 Yes Yes YesMissouri Yes Yes 1 Yes Yes Yes Yes Yes 6 YesMontana Yes Yes 1 Yes Yes Yes Yes Yes YesNebraska Yes Yes Yes Yes Yes Yes Yes YesNevada Yes Yes Yes Yes Yes Yes Yes YesNew Hampshire Yes No Yes Yes Yes Yes Yes NoNew Jersey No Yes Yes Yes 7 No No Yes NoNew Mexico Yes Yes Yes Yes No No Yes YesNew York Yes Yes Yes Yes Yes Yes Yes YesNorth Carolina Yes Yes Yes Yes Yes Yes Yes NoNorth Dakota Yes Yes Yes Yes Yes Yes Yes YesOhio Yes No No Yes Yes Yes No NoOklahoma Yes Yes Yes Yes Yes Yes Yes NoOregon Yes Yes Yes Yes No Other Other NRPennsylvania Yes Yes Yes Yes No Yes Yes YesRhode Island Yes Yes Yes Yes 8 Yes Yes Yes YesSouth Carolina No Yes 1 Yes Yes 1 No Yes Yes NoSouth Dakota Yes Yes No Yes Yes Yes No NoTennessee Yes Yes Yes Yes Yes Yes Yes NROtherservicesSee notes at end of table. Continued70 Administration of Mental Health Services by Medicaid Agencies

Table A.2: Services Defined as Medicaid Mental Health Services for Rate-setting or State Budgeting Purposes,continuedStateInpatient mentalhealth services in ageneral hospitalInpatient mentalhealth servicesin a psychiatrichospitalOutpatientservices atcommunity mentalhealth centersOutpatient servicesprovided bypsychiatric ordesignated mentalhealth providersOutpatient mentalhealth servicesprovided by ageneral or familyphysicianPsychotropicdrugsServicesprovidedunder therehab optionTotal 43 46 49 49 31 39 46 25Texas Yes Yes Yes Yes Yes Yes Yes YesUtah Yes Yes Yes Yes No Yes Yes YesVermont Yes Yes Yes Yes Yes Yes Yes YesVirginia Yes Yes Yes Yes No Yes Yes NRWashington Yes Yes Yes Yes Yes Yes Yes NoWest Virginia No Yes Yes Yes No No Yes NoWisconsin Yes Yes Yes Yes No No Yes YesWyoming Other 9 Yes 1 Yes Yes Yes Yes Yes YesOtherservicesNR = No response1Up to age 21.2Psychotropic drugs are covered medical services. However, antipsychotic drugs are reported separately as mental health services for informational purposes.3The State mental health authority administers all Medicaid mental health services and sets all rates.412 visits per year.5General physicians are not allowed to bill for psychological services.6For some services.7Only psychologists and community mental health clinics.8Adults are limited to psychiatrist, hospital outpatient, or community mental health center.9Acute stabilization only.Administration of Mental Health Services by Medicaid Agencies 71

Table A.3: Managed CareStateState contracts with a BHO or an ASO formental health service delivery 1Total 26 34Alabama No Other 2Alaska No Other 2Arizona Yes YesArkansas No NoCalifornia No YesColorado Yes YesConnecticut Yes 3 YesDelaware Yes NoDistrict of Columbia No YesFlorida Yes YesGeorgia Yes YesHawaii Yes YesIdaho No NoIllinois No NoIndiana No YesIowa Yes YesKansas No YesKentucky No YesLouisiana No NoMaine No NoMaryland Yes YesMassachusetts Yes Yes 4Michigan Yes YesMinnesota No NoMississippi No Other 2Missouri Yes YesMontana No NoNebraska Yes YesNevada Yes YesNew Hampshire No NoNew Jersey No YesNew Mexico Yes YesNew York No YesNorth Carolina Yes YesNorth Dakota Yes 5 NoOhio No YesOklahoma No NoMental health services or populations carvedout of managed careSee notes at end of table.Continued72 Administration of Mental Health Services by Medicaid Agencies

Table A.3: Managed Care, continuedStateState contracts with a BHO or an ASO formental health service delivery 1Total 26 34Oregon Yes YesPennsylvania Yes YesRhode Island Yes YesSouth Carolina No YesSouth Dakota No NoTennessee Yes NoTexas Yes YesUtahVermont Yes 6 Yes 6Virginia No Yes 7Washington Yes 8 YesWest Virginia Yes YesWisconsin No YesWyoming No Other 2Mental health services or populations carvedout of managed careYes1Behavioral managed care organization (BHO) or administrative services organization (ASO).2Not applicable; no Medicaid managed care for any services in the State.3For Family Medicaid only.4Mental health services are carved out of the primary care case management program but not carved out of the fully capitated managed care program.5Behavioral and physical health covered by one managed care organization.6The Medicaid agency contracts with the mental health agency to provide care to adults with severe persistent mental illness, who are carved out of primary care case management.7Outpatient services are provided by managed care organizations, while mental health rehab services are carved out.8The State contracts with regional support networks, which in turn subcontract with BHOs.Administration of Mental Health Services by Medicaid Agencies 73

Table A.4: DataState MMIS Data Usage Medicaid Linked Client DatasetsAnalysisof mentalhealthserviceutilizationData used by any agency for…. Medicaid has Which agencies?linked clientdatasets withother agenciesLinking toclient-leveldata foradministrativepurposesLinkingto clientleveldatafor policyanalysisChildren, family, andsocial services 1Mental healthOther 2Total 40 34 32 25 15 16 15Alabama Yes Yes Yes Yes No Yes YesAlaska Yes Yes Yes No — — —Arizona Yes Yes Yes Yes No Yes YesArkansas Yes NR NR NR NR NR NRCalifornia Yes Yes Yes Yes Yes No NoColorado Yes NR NR No — — —Connecticut NR NR NR No — — —Delaware No No NR Yes Yes No NoDistrict ofColumbiaNo No No Yes Yes No NoFlorida Yes Yes Yes No — — —Georgia Yes Yes Yes No — — —Hawaii NR NR NR No — — —Idaho NR NR NR NR NR NR NRIllinois NR NR NR NR NR NR NRIndiana Yes No No No — — —Iowa Yes No Yes No — — —Kansas Yes Yes Yes No — — —Kentucky NR NR NR No — — —Louisiana Yes Yes Yes Yes No Yes YesMaine Yes Yes Yes Yes Yes Yes YesMaryland Yes Yes Yes No — — —Massachusetts Yes Yes Yes No — — —Michigan Yes Yes 3 Yes 3 No — — —Minnesota Yes Yes No No — — —Mississippi Yes Yes No No — — —Missouri Yes Yes Yes Yes No Yes NoMontana Yes Yes Yes Yes No No YesNebraska Yes Yes No Yes Yes No YesNevada NR NR NR Yes Yes Yes NoNew Hampshire Yes Yes Yes No — — —See notes at end of table.Continued74 Administration of Mental Health Services by Medicaid Agencies

Table A.4: Data, continuedState MMIS Data Usage Medicaid Linked Client DatasetsAnalysisof mentalhealthserviceutilizationData used by any agency for…. Medicaid has Which agencies?linked clientdatasets withother agenciesLinking toclient-leveldata foradministrativepurposesLinkingto clientleveldatafor policyanalysisTotal 40 34 32 25 15 16 15New Jersey NR NR NR Yes Yes No NoNew Mexico Yes 4 Yes 4 Yes 4 Yes Yes No YesNew York Yes Yes Yes No — — —North Carolina Yes No No Yes No Yes NoNorth Dakota Yes No No No — — —Ohio Other 5 Other 5 Other 5 No — — —Oklahoma Yes Yes Yes Yes No Yes NoOregon Yes Yes Yes Yes Yes Yes YesPennsylvania Yes Yes Yes Yes Yes Yes YesRhode Island Yes Yes Yes No — — —South Carolina Yes Yes Yes Yes No Yes YesSouth Dakota Yes Yes Yes No — — —Tennessee Yes Yes Yes Yes Yes Yes YesTexas Yes Yes Yes Yes No Yes YesUtah Yes Yes Yes No — — —Vermont Yes Yes Yes Yes Yes Yes YesVirginia NR NR NR Yes Yes No NoWashington Yes Yes Yes Yes No No YesWest Virginia Yes Yes Yes No — — —Wisconsin Yes Yes Yes Yes Yes Yes NoWyoming Yes Yes Yes Yes Yes Yes YesChildren, family, andsocial services 1Mental healthOther 2NR = No response1Includes both children and family services and the social services agencies in each State.2Includes corrections, education, health, substance abuse, Governor’s office, budget office, and/or State legislative staff.3Beginning to occur.4Using on a limited basis.5State mental health authority has its own claims database.Administration of Mental Health Services by Medicaid Agencies 75

Appendix BExpert Panel on Medicaid Mental Health Services—Program and Analytic ReportsJanuary 8, 2004Panel Members:■■■■■■■■■■■■■■■Barry Brauth, New York State Office of Mental HealthMichael Deily, Utah Department of HealthDick Dougherty, Dougherty Management Associates, Inc.Barbara Edwards, Office of Ohio Health PlansJohn Folkemer, Maryland Department of Health and Mental HygieneGeorge Gintoli, South Carolina Department of Mental HealthSherry Glied, Mailman School of Public Health, Columbia UniversityLaura Lee Hall, National Association for the Mentally Ill Policy Research InstituteJim Hawthorne, Centers for Medicare and Medicaid Services (CMS)Chuck Ingoglia, National Mental Health Association (NMHA)Kathryn Kotula, National Association of State Medicaid Directors (NASMD)Noel Mazade, National Association of State Mental Health Program Directors ResearchInstitute, Inc.Sandra Naylor-Goodwin, California Institute of Mental HealthDavid Shern, Louis de la Parta Florida Mental Health Institute, University of South FloridaJudy Stange, National Association of Mental Health Planning and Advisory CouncilsSAMHSA Staff:■Jeffrey BuckAdministration of Mental Health Services by Medicaid Agencies 77

MPR Staff:■■■■■■■Lori AchmanAnn CherlowDebra DraperMeredith LeeRita StapulonisJames VerdierJustin White78 Administration of Mental Health Services by Medicaid Agencies

DHHS Publication No. (SMA) 07-4301Printed 2007