Reforming Mental Health Clinic Services – An Overview

1. Reforming Mental Health Clinic Services –An Overview Office of Mental Health July 28, 2008

2. Why Reform Outpatient Services Now? Outpatient services (Medicaid and Non-Medicaid) are: • Underfunded and fragmented • Over reliance on inpatient care • Approximately ½ of the public mental health dollars finance mental health hospitalization Reimbursement is complex and inequitable. • “Short-term” Medicaid initiatives like COPS have become permanent solutions

3. Why Now? Continued… The financing system does not incentivize desirable outcomes Insufficient resources are devoted to such things as: early identification and treatment, outreach, crisis, etc. Outpatient services funding is extremely vulnerable to the continuous Federal assault on Medicaid - the base of its funding Poor integration between mental health/physical health care

4. Why Now? Continued… A 2007 report by Public Consulting Group gives compelling analysis and rationale to support outpatient restructuring. This report can be found at: http://www.omh.state.ny.us/omhweb/Provider_Reimbursement_System/report.html Insufficient data to demonstrate the effectiveness of service outcomes

5. OMH Restructuring Efforts • Clinic Restructuring • Adult Non-clinic Ambulatory Restructuring • Child and Family Non-clinic Restructuring • Hospital Inpatient • Co-Occurring Disorders • Targeted Case Management • Housing Clinic restructuring represents the first and most developed phase of this transformation process.

6. Mental Health Clinic Restructuring Workgroup Clinic Restructuring began with the formation of the Mental Health Clinic Restructuring Workgroup This workgroup consists of: Local Government Officials Mental Health Providers Mental Health Advocates The advice and substantial efforts of this workgroup has helped OMH in the development of a redesigned clinic program, a new payment system and a multi-year implementation plan

7. Clinic Restructuring Workgroup Participants Coalition of Behavioral Health Agencies Conference of Local Mental Hygiene Directors Children’s Mental Health Coalition Families Together Federation of Mental Health Centers Greater New York Hospital Association Healthcare Association of New York State New York State Department of Health New York State Office of Mental Health NY Assoc. of Psychiatric Rehabilitation Services NYS Council for Community Behavioral Health Care NYS Psychiatric Association United Hospital Fund

8. Workgroup Purpose Two subcommittees created Clinical/Programmatic Provide guidance on the principles for clinic treatment services Identify specific services that should be included in a reimbursement structure Fiscal Establish consensus on fiscal operating principles Identify the data necessary to develop a new reimbursement system Model the basic methodologies for rate setting Project indigent care funding needs

9. Guiding Principles for Clinic Reform Clinic is treatment with a defined set of services Restructuring should facilitate improvements in quality of care including: Identification and engagement of clients Access to treatment services (including off-site and in-home) Clinical Assessments Regular use of evidence-based and promising treatment practices

10. Guiding Principles continued… Restructuring should rationalize funding by: • Paying based on the efficient and economical cost of providing quality services including overhead expenses • Phasing out rate add-ons such as COPS and CSP • Providing regular adjustments for inflation • Setting differential payments for procedures that reflect cost differences such as geography, staffing, venue, and service • Providing sufficient funding to incentivize the use of evidence based and promising treatment practices • Providing incentives for risk adjusted positive outcomes • Allowing billing for multiple services in the same day • Using HIPAA compliant billing codes

11. Five Key Elements of Clinic Restructuring A redefined set of clinic treatment services Redesigned Medicaid clinic rates and phase out of COPS HIPAA compliant procedure-based payment system with modifiers to reflect variations in cost Provisions for indigent care Addressing of Medicaid HMOs/State insurance plan underpayments

12. 1. Redefine Clinic Treatment Services Clinic is a level of care with specific services These services should: Enhance consumer engagement Support quality assessment Support quality treatment Be part of a system of recovery and resiliency

13. 2. Redesign Clinic Rates Medicaid payment rates will be based on the efficient and economical provision of services Payments will be comparable for similar services delivered by similar providers with adjustments for factors influencing the cost of providing services Peer groups will be established by OMH Elimination of rate add-ons such as COPS

14. 3. HIPAA Compliant Codes & Modifiers Federal HIPAA Administrative Simplification Act requires the use of HIPAA compliant billing systems Modifiers will be combined with HIPAA compliant procedure codes to reflect differences in resources and costs Possible conditions that may merit the use of modifiers include: Qualifications of Staff Service Location Evenings and Weekends

15. 4. Provisions for Indigent Care Article XVII of New York’s Constitution Gives the state a special responsibility to care for “persons suffering from mental disorder or defect” Assuring access to outpatient clinic services is essential to meet this objective reduce the demand for other high cost services OMH will work to develop a comprehensive strategy for funding mental health outpatient services to the uninsured

16. 5. Medicaid HMO Underpayments Medicaid managed care plans (including FHP/CHP) underpay for mental health clinic services About one-third to one-half of actual cost. Medicaid managed care represents 11% of clinic revenues and continues to grow. OMH is currently looking at ways to address this issue.

17. Proposed Clinic Services OMH is in the process of developing a list of proposed services Once this service list is completed, OMH will link services to reimbursement using CPT and HCPC codes

18. Current Clinic Rate Methodology Free-standing Article 31 Outpatient Clinic Medicaid rates include: • A base rate (adjusted by region: upstate/downstate) and • Supplementary payments: COPS, CSP, QI, CEW Article 28 hospital rates are based on: • A provider specific basis capped at $67.50 and • An uncapped capital component

19. Clinic Rate Supplemental Payments – COPS & CSP Comprehensive Outpatient Programs (COPS) is an add-on used to fund clinic services • Implemented in 1991 and largely unchanged Community Support Programs (CSP) is used to fund community support programs • Implemented in 1997 and largely unchanged Both are based on historic allocations of various OMH-financed Aid to Localities funds and county allocations.

20. Elements of the New System Ambulatory Patient Groups (APGs) – consolidation of bills for related mental health procedures • OMH is working with the Health Dept. in the development and implementation of APGs for mental health Performance/Outcomes – OMH is working to develop performance indicators to reward positive outcomes

21. Elements continued… Base Rates • Will be based on peer groups Weights • Will be adjusted to reflect differences in service intensity (e.g., duration, staff qualifications) Multiple Same-Day Services - will allow clients to avoid making unnecessary multiple trips

22. Reduction of Regulatory Burdens OMH certification is only required at Dept. of Health licensed facilities for the following: When a Diagnostic and Treatment Center or Outpatient Department exceeds 10,000 annual mental health visits or Where over 30% of their annual visits are for mental health services at that site

23. Reduction of Regulatory Burdens continued… Co-Occurring Taskforce is currently reviewing certification of services for individuals with co-occurring mental health and chemical dependency disorders MOU and FAQs will be issued shortly

24. Reimbursement Changes to Date July 1, 2008: Increased minimum reimbursement for clinics licensed solely under Mental Hygiene Law • Approximately $100/visit for NYC providers participating in the Quality Improvement initiative • Providers in other geographic regions and those without quality initiative will be adjusted proportionally

25. Reimbursement Changes continued… Elimination of COPS volume rebasing and the COPS threshold Providers are being rebased one last time using the latest prior year Medicaid/Medicaid Managed Care visit volume Providers below their thresholds are being rebased subject to the current methodology Once providers are rebased, future rebasing of the COPS rate and reconciliation of COPS payments will be eliminated COPS payments will be available for all Medicaid mental health clinic visits until such time COPS is eliminated

26. Reimbursement Changes continued… Removal of the so-called Medicaid “neutrality cap” This removal will enable OMH to promote clinic expansion Need must still be demonstrated through the Prior Approval Review (PAR) process

27. Upcoming Reimbursement Change COPS-only payments will be limited to services for which the Medicaid managed care plan has either provided or approved payment Programs that serve Medicaid managed care enrollees will be allowed to bill the so-called “COPS-only” rate when they have either already received payment or have received an approval for payment from a Medicaid managed care company for the base rate

28. Inpatient Payment Reform OMH has partnered with the Dept. of Health in the development of a multi-year proposal to update Article 28 hospital rates for inpatient psychiatric care A “Medicare-like” declining per diem payment methodology is being explored for this proposal

29. Restructuring Non-Clinic Mental Health Outpatient Services OMH is in the process of developing a plan for restructuring all other non-clinic mental health outpatient services that addresses: The needs of consumers Fragmentation Lack of accountability The significant financial, programmatic and regulatory challenges facing the mental health system OMH has enlisted the help of a stakeholder group to aid OMH with finding solutions to these problems

30. Restructuring Non-Clinic Services continued… Examples of Adult Services being examined Emergency Comprehensive Psychiatric Emergency Program Crisis Outpatient Assertive Community Treatment (ACT) Continuing Day Treatment (CDT) Intensive Psychiatric Rehabilitation (IPRT) Partial Hospitalization Personalized Recovery-Oriented Services (PROS) Support Care Coordination Education General Support Rehab-Related Services Vocational

31. Restructuring Non-Clinic Services continued… Examples of Children’s services being examined: Day Treatment Case Management Home and Community Based Services (HCBS) Waiver

32. Transitioning to the New Methodology The new methodology is significantly different from the current system Reimbursement information/Service use data will be collected and reviewed over time to determine the impact of restructuring on providers, consumers, counties and the State The new methodology will be phased-in over time • Phase-out COPS • Phase-in new payment methodology