Mental Health, Substance Abuse Treatment Changing

Mental health care and substance abuse treatment in California’s subsidized coverage programs are undergoing change on two fronts. Either one of the changes by itself could produce optimism and anxiety among stakeholders. But coming in tandem, the changes are doubling expectations and worries.

“This is a time of great possibilities, but we also face some difficult problems — both as a state and as advocates for substance abuse and mental health treatment,” said Al Senella, president of the California Association of Alcohol and Drug Program Executives and chief operating officer of the Tarzana Treatment Center in Los Angeles.

Changes in ACA Affect Medi-Cal Mental Health Coverage

One of the most significant changes, according to substance abuse treatment providers and mental health advocates, is their interpretation that the Affordable Care Act requires adherence to the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008. Passed by Congress and signed by President George W. Bush, the law calls for “equity in the provision of mental health and substance-related disorder benefits under group health plans.” Group health plans with 50 or more employees must ensure equal coverage for physical and mental health/substance use services.

Enforcement of the law has been lax, according to some critics. But that will change, Senella and other advocates say, because they believe the ACA includes adherence to provisions of the parity act as part of the essential benefits for health plans.

The parity act, which took effect in 2010, applies to Medicaid managed care plans and presents a challenge in California, where state officials are steering more and more Medi-Cal beneficiaries into managed care. After a variety of coverage scenarios for mental health and substance abuse treatment coverage in the past, Medi-Cal – California’s Medicaid program – is embarking on a new scenario under realignment.

Realignment Means New Duties for DHCS

The California Department of Health Care Services has taken on new duties managing Medi-Cal mental health care and substance abuse treatment as a result of Gov. Jerry Brown’s (D) decision to realign state and county oversight of mental health programs. The shift, sending more mental health care responsibility, decision-making and money to counties, is widely seen as a potentially positive change by mental health advocates.

Part of that realignment includes the dissolution of the Department of Mental Health, which used to oversee Medi-Cal mental health coverage along with the state’s mental hospitals. A new state agency — the Department of State Hospitals — is managing the state’s seven mental hospitals, and DHCS now manages Medi-Cal mental health coverage.

After a little more than two months of overseeing Medi-Cal mental health coverage, DHCS is facing a new challenge: Many of the 1.5 million new Medi-Cal beneficiaries expected to come into the system in 2014 as prescribed by ACA will need mental health care, and the way they get it has not yet been defined in detail.

The challenge is not strictly numerical. California’s size — in population and geography — and the complexity of the marketplace present a variety of challenges.

DHCS had an Oct. 1 deadline to deliver a detailed plan to CMS but asked last month for an extension to April 1, 2013. State officials said they are awaiting federal officials’ response to that request.

DHCS officials, in a written statement responding to questions, said they are “completely” satisfied with their dealings with CMS.

“The federal government has been fully supportive and is respectful of the initiative and proactive approach California has taken regarding the ACA and health care reform, and they continue to collaborate with us on preparing for implementation of the ACA,” DHCS officials said.

Building ‘Bridge to Reform’

Much of the foundation for the state’s current mental health coverage and substance abuse treatment was formed during the process leading up to California’s 1115 Medicaid waiver, the “Bridge to Reform” setting the stage for ACA changes.

“A tremendous amount of work with a lot of stakeholders was done during the application process for that waiver,” Senella said. “But ultimately DHCS included only limited mental health benefits and no benefit for substance abuse. They said it was too complicated for them, not enough data … all kinds of different reasons,” Senella said.

“We objected strongly to that — to both DHCS and CMS. We (mental health advocates and substance abuse treatment providers) made a lot of noise and it led to the feds calling for a needs assessment by the state,” Senella said.

A 303-page needs assessment completed earlier this year was generally well-received by substance abuse treatment providers and mental health advocates, according to Senella.

“We all believe it to be a thorough and well-done report,” Senella said. “All in all, stakeholders believe it was a substantial report and did a good job with background and making recommendations. We’ve been anxiously awaiting response from the state in their plan,” Senella said.

State officials, in their written statement, said there are still too many unanswered questions at the federal level.

“The Behavioral Health Needs Assessment was submitted to CMS in March 2012, and California immediately began working on the second required piece, the Service Plan, which will demonstrate the state’s readiness to both enroll and meet the behavioral health needs of the expansion population,” DHCS officials said. 

“However, given the fact there are still several key issues that will significantly impact California’s final decision, we are unable to finalize our decisions regarding the state’s Service Plan until these issues are decided or clarified. Prominent issues still to be resolved include federal guidance regarding parity and any other guidance related to our Medi-Cal program. This is especially important given the carve-out status of behavioral health in California,” the DHCS statement said.

State Could End Up With Tiers of Beneficiaries

Mental health and substance abuse treatment advocates say California may end up with two tiers of Medi-Cal beneficiaries — pre-ACA beneficiaries who have less coverage and new ACA-eligible beneficiaries who have better or more coverage. They say the state should adjust policies so all beneficiaries receive the same coverage in accordance with the Wellstone-Domenici Mental Health and Addiction Equity Act of 2008.

“If I’m a Medi-Cal person today, California does not offer me substance abuse coverage and only limited mental health coverage,” Senella said. “But if I’m a new Medi-Cal recipient in 2014, I get both those things automatically. It’s such a double standard and in the long run, it’s worse for the state. That’s the absurdity of this,” Senella said.

“All the research says that if you provide the appropriate care in a timely way, you save money in other areas — in emergency department treatment, hospitalizations, expensive drugs,” Senella said.

“The state should do the right thing and make all beneficiaries have equal coverage,” Senella said.

DHCS officials responded:

“California has not yet received all of the necessary CMS guidance on this issue, nor has it made any decisions regarding the benefit package for this expansion population. These matters are still under CMS discussion. We are also unclear what the ACA will require regarding parity in Medicaid. We acknowledge the desire of our partner advocates and stakeholders for coverage that is the same for the existing and expansion Medi-Cal populations. We will be considering this issue carefully as we make our decision.

“Mental health and substance use disorder services are essential Medicaid health benefits. The state provides these services as required and will either follow any suggested federal options or develop its own option to be approved by CMS. California has every intent to fully comply with the law and make these benefits available to beneficiaries,” the DHCS statement said.

Related Topics

Insight Medi-Cal Mental Health