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The Health Care Financing Administration’s (HCFA) decision last Oct. 19 to reject the state of New Mexico’s request for a two-year renewal of a waiver to operate the behavioral health component of its Salud! Medicaid managed care program has been reversed by the Bush administration — to cheers from the state agency and expressions of concern from advocates.
"We are grateful to Health and Human Services Secretary Tommy Thompson for reinstating the waiver under terms that we have mutually agreed to," Robin Otten, state Human Service Department deputy secretary, said in a prepared statement. "We are also grateful that this issue has been resolved, so we can focus on providing excellent services to our clients. There are a number of ways this can be accomplished, and we are determined to find the best one for New Mexico by working collaboratively with others who care about this issue."
What state officials didn’t discuss in their upbeat media release was the tight leash HCFA has applied in its decision to treat the state’s approach as a new request for modification of the existing Salud! program to include behavioral health and then approve it.
The Feb. 16 letter from Mike Fiore, director of the Division of Integrated Health Systems’ Family and Children’s Health Programs Group, said the agency’s decision "was not taken lightly. We considered a number of possibilities for addressing the serious deficiencies in the New Mexico waiver, including maintaining the original schedule of moving to fee-for-service system or extending the waiver with terms and conditions.
"The advantage of a waiver extension with strong terms and conditions is the provision of a strong set of beneficiary protections designed to assure access to appropriate care that would not be present in a fee-for-service system," the letter stated.
A key contingency in the waiver approval is a redesign of the behavioral health system under Salud! designed to establish a system based on stakeholder input that addresses the concerns of beneficiaries and providers that were raised under the current system. Assistance in modifying the program design is to come from an advisory committee with beneficiaries, providers, and other representatives. There is to be a public process that will seek participation in the development and ongoing operation of the behavioral health program from:
• family members;
• the state’s juvenile justice system;
• the state children, youth, and families agency;
• the state department of health;
• managed care organizations.
HCFA says the state also must "specify how it will reduce the administrative layers in the current system [such as eliminating some of the layers or by establishing a separate carve-out system, a regionally-based program, or by some other design], how it will develop standard authorization forms, how it will ensure appropriate funding for behavioral care services directly to behavioral health providers, how it will ensure coordination of behavioral health services with those provided by its sister agencies, and address other concerns raised by stakeholders."
Salud! must ensure that at least 85% of the payments made to managed care organizations for behavioral health care and services will be paid to behavioral health providers for beneficiary behavioral health care and services. The program also will review statewide availability of community-based services for adults with serious mental illness and children with serious emotional disturbance, and will consider exempting from managed care enrollment those individuals who are at the highest risk of institutionalization.
The approval also requires a review of service authorization decisions by qualified health professionals working for an independent organization such as a professional review organization. The contractor is to audit a statistically valid sample of reductions, terminations, and denials of behavioral health service decisions to determine if authorized service levels are appropriate with respect to accepted standards of clinical care. The state must take timely corrective action with managed care organizations as needed based on the audit reports.
By May 1, 2001, New Mexico must set up separate toll-free telephone lines for providers and beneficiaries to use to report concerns related to behavioral health service authorization denials or reductions. State officials also have to explain how they will respond to all concerns in a timely manner and work with managed care organizations to resolve problems when possible.
An early warning system that tracks and reports key variables of program performance related to behavioral health services must be established by July 1, 2001. "The state will involve key stakeholders in considering the key variables of program performance to be included in the tracking system," the study stated.
The state’s plan also must ensure that each managed care organization provides quarterly reports on the network capacity of behavioral health providers and facilities beginning July 1, 2001.
The Salud! analysis is to show an unduplicated count of network providers and facilities and their capacity to provide care and services to beneficiaries. If HCFA determines, after discussions with state officials, that network capacity is below reasonable standards in any area of the state, based on the customary capacity standard in that area, the state must permit beneficiaries to go out of network for behavioral health care and services in that particular area until the state can demonstrate to HCFA that the network capacity complies with the appropriate standard for the area.
HCFA’s decision to reinstate the waiver was met with a statement of regret issued by one of the chief critics of Salud! behavioral health — the Bazelon Center for Mental Health Law in Washington, DC. The center opened an area on its web site containing all of its reports from last year that had criticized the Salud! behavioral health program and had called for rejection of the waiver extension.
But Bazelon center spokesman Lee Carty says, "We are particularly encouraged by requirements of an external review focused on behavioral health services, a 15% cap on administrative costs, and the development of an early warning system."
Mr. Carty adds, "[State action to fulfill all the terms and conditions could] significantly improve access to and quality of mental health services in New Mexico."