Administration of Mental Health Services by Medicaid Agencies

“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