Administration of Mental Health Services by Medicaid Agencies

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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
Page 1: Administrationof MentalHealthServic
Page 5 and 6: AcknowledgmentsThis report was prep
Page 8 and 9: III. Medicaid Agency Collaboration
Page 10 and 11: Tables12345678Organizational Struct
Page 13 and 14: Executive SummaryState Medicaid age
Page 15 and 16: I. IntroductionState Medicaid agenc
Page 17 and 18: with Medicaid playing a more promin
Page 19: cussions of some issues raised in r
Page 22 and 23: “Single State Agency” Requireme
Page 24 and 25: Table 1: Organizational StructureSt
Page 30 and 31: Table 2: Sources of Medicaid Fundin
Page 32 and 33: Table 2: Sources of Medicaid Fundin
Page 34 and 35: Thirty-nine States classified psych
Page 36 and 37: Table 4: Medicaid Mental Health Pro
Page 38 and 39: Table 4: Medicaid Mental Health Pro
Page 40: in providing Medicaid mental health
Page 43 and 44: Table 5: Formal Reports on Medicaid
Page 45 and 46: The other agency that most commonly
Page 47: health utilization or expenditures,
Page 50 and 51: Table 7: CollaborationMental Health
Page 52 and 53: Table 7: Collaboration, continuedMe
Page 54 and 55: 3. Director MeetingsRegularly sched
Page 56 and 57: The Medicaid director in one State
Page 58 and 59: have the Medicaid agency represente
Page 60 and 61: aid and mental health work together
Page 62 and 63: A. State ClassificationsThe State c
Page 64 and 65: ■- The Medicaid agency participat
Page 66 and 67: programs and are provided in either
Page 68 and 69: 4.2 million for all States, and thr
Page 71 and 72: V. Summary and ConclusionsThe surve
Page 73 and 74: less frequent but still regularly s
Page 75: specific nature of these State-loca
Page 79 and 80:
Appendix AAdditional State-by-State
Page 81 and 82:
Table A.1: Medicaid Mental Health S
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Table A.2: Services Defined as Medi
Page 85 and 86:
Table A.2: Services Defined as Medi
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Table A.3: Managed Care, continuedS
Page 89:
Table A.4: Data, continuedState MMI
Page 92:
MPR Staff:■■■■■■■Lori
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