Ideas to Consider #21 – Mental Health Reform is Heating Up in Lansing

One month ago, Senator Aric Nesbitt wrote an op-ed in the Holland Sentinel (https://www.hollandsentinel.com/story/opinion/letters/2021/10/19/letter-medicaid-reform-time-provide-choice-and-integrate-care/8507842002/) arguing it’s time for mental health reform in Michigan.  

He writes:  “Nearly every single insurance plan offered in the commercial market by an employer integrates mental health services with physical healthcare coverage.  Unfortunately, integrated care is not provided for more than 2 million Michigan residents on Medicaid. To receive treatment for severe mental health conditions, these residents are forced to use and rely upon an antiquated government-run patchwork system of state, county and private medical providers. They have no choice or options.”  Later he notes:  Private health plans are not allowed to even offer Medicaid consumers certain mental health services even if the care is more accessible, better quality and or cheaper than the current state-run system.  

As one can imagine, it is impossible for Senator Nesbitt to completely lay out his arguments in a short editorial.  However, his editorial simplifies a very complicated system and needs context for understanding.  It is true that commercial health plans integrate mental health and physical health.  But what Senator Nesbitt does not explain is this:  

  • Commercial plans integrate care, but in the most simple of ways.  Most plans have only two benefits:  an outpatient benefit (talk to a therapist) and an inpatient benefit (hospitalization).
  • Michigan’s Medicaid plans do provide one mental health benefit.  A skinny, outpatient mental health benefit (talk to a therapist) where provider reimbursement rates are so low that private therapists typically will not accept Medicaid patients; and non-profit providers have to raise donor dollars to cover their costs.  All told, there are many people on Medicaid that need outpatient mental health and substance use services that cannot access services because the reimbursement rates are inadequate.  
  • The ‘antiquated government-run patchwork system’ that Senator Nesbitt describes is designed to serve individuals on Medicaid with severe emotional disturbances (SED). Moreover, it is designed to meet local needs, which is why it is county-based rather than state-based.  It provides an inpatient benefit (hospitalization) as well as community based care options. (The outpatient benefit – talk therapy – is provided by the Medicaid plan as noted earlier.)  Community based care options include services like case management; intensive outpatient services; community based, short-term crisis care; mobile response units, and other community based solutions.

Senator Nesbitt is right; our statewide mental health system needs reform and improvement.  Here is a list I would suggest:

  • Integrate the mental health plans, but create minimum reimbursement rates for services.  Specifically, outpatient provider rates need to be raised to cover costs.  Non-profit providers should not have to privately raise money to cover outpatient therapy.  Medicaid health plans say that they have an outpatient mental health service, but unfortunately few can access it.  Hence, each Medicaid’s plan for outpatient therapy either covers other physical health service costs, or is a profit making margin that the health insurance plans count on to return a profit to shareholders.  
  • Integrate the mental health plans, and mandate that Medicaid health plans provide community based care options.  We know that those with SED need more than outpatient therapy, but often less than hospitalization services.  These are the services that County CMHs and non-profit providers (i.e. Easter Seals, Hope Network, Arbor Circle, etc) specialize in providing.  Community based services save the state money because they keep people out of expensive hospitalization, residential care options and/or correctional facilities.  We need more community based care options available for everyone to improve lives and drive down the cost of care.  
  • Ensure reimbursement options include capitated and case rates.  Fee for service reimbursement incentivizes volume of care instead of outcomes.  Case rates require collaboration across services and systems (ie. housing, public safety, etc).  Outcomes should drive reform, not quantity of service.
  • Require that Medicaid insurers collaborate with law enforcement to maintain and expand mental health and substance use options within county correctional facilities.  Too often those that commit crime have undiagnosed or untreated mental health and substance use illness.  We can improve community safety by addressing these in correctional facilities.
  • Reduce the number of Medicaid plans available to choose from.  Medicaid plans require that consumers have a choice of health plans.  Choice is one of two plans, not one of five like it is in the West Michigan region.  The reality is that there is an administrative cost to deliver care.  Driving administrative costs down should be a goal of any reform effort.  Fewer plans should drive an efficiency yield, and provide more money for direct care services.   
  • Create fewer Medicaid regions in the state so that service options are similar throughout Michigan.  The unfortunate truth is that consumers in northern Michigan and the Upper Peninsula do not have as many licensed social workers and mental health clinicians to provide services as those that live downstate.  Therefore, the breadth of services Michiganders receive is limited if we continue to utilize geographic boundaries to deliver services.  Remove the geographic boundaries and open up services across the state.
  • Use data.  The Michigan Department of Health & Human Services (MDHHS) houses Medicaid claims data from across the state, and from different public systems.  Start analyzing it to find out what types of services drive outcome improvements recognizing there are holes in service.  Today we live in a world of data analytics.  MDHHS staff needs to take the lead and get to work.  Is it housing that drives improvements?  Certain community based care options? Medication? High quality providers?  Combinations of service, providers and medicine?  Get us 80 percent of the way there MDHHS, and lead the transformation.  Or get out of the way and let CMHs lead the integration with preferred Medicaid partners.  

Ultimately, Senator Nesbitt is right. We can do better for people who struggle with mental health illness and substance use disease.  Let’s remember this. Two Ideas to Consider:  

  1. Recognize the multiple challenges the current mental health system faces, and stop suggesting that the integration of physical and mental health care is ‘the solution.’  It is misleading.  It may be part of ‘a solution’, but human behavior and the social sector are much more complicated than any single public policy change.
  1. We need to do everything we can to engage people earlier in their journey with mental illness and substance use disease.  More accessible outpatient services.  More community based care options.  Less hospitalization and residential care.  These need to be our north star in any reform effort.  

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