HHS Looks to Medicaid Demonstrations to Improve Mental Health

November 15, 2018 - Medicaid beneficiaries with mental health conditions are the targets of recent CMS efforts to boost health outcomes.

In recent remarks to the National Association of Medicaid Directors in the national capital, HHS Secretary Alex Azar said “successful partnership between our leadership at HHS and the leaders of every state Medicaid program is vital to delivering on the mission of HHS and the mission of the Medicaid program: improving the health and well-being of the Americans we serve.”

Nearly 1.3 million individuals are treated for mental health and substance abuse disorders under the Medicaid expansion, according to an estimate by health care economists Richard G. Frank of the Harvard Medical School and Sherry Glied of New York University.

And Medicaid’s an essential source of care for those with mental illness or addiction, according to The National Council. In 2014, Medicaid spending represented 25% of all mental health expenditures in the nation and 21% of all substance use disorder spending. Approximately 29% of those who receive health insurance coverage through the Medicaid expansion either have a mental health condition, a substance use disorder, or both. Generally, those uninsured prior to the Affordable Care Act had a higher prevalence of behavioral health conditions than the overall population.

Through Medicaid, numerous states with the highest opioid overdose death rates expanded access to medication-assisted treatment. For example, Medicaid pays for between 35-50% of all medication-assisted treatment in Kentucky, Maine, Pennsylvania, Ohio, and West Virginia

By covering low-income childless adults up to 138% of the federal poverty line, Medicaid expansion enabled 1.29 million low-income individuals with substance use disorders to gain access to coverage unavailable to their counterparts in non-expansion states.

With half of Medicaid expansion states enduring revenue shortfalls in the last half of FY 2016, they lack the ability to make up for any reduction in federal Medicaid support. The Medicaid expansion has enabled significant statewide savings in Connecticut, Nevada and Washington, where the states reduced their state general funds required for behavioral health. Arkansas, Colorado, and Michigan reported expected reductions in general funds spending for the uninsured ranging from $7 million to $190 million in 2015.

Starting in April 2017, the Trump Administration called for a new era of state-federal partnership in Medicaid, he said. “I believe a great deal of progress has been made on that front already. But I am optimistic that much more progress is still ahead of us, and I want to talk about what that looks like today.”

While acknowledging it’s been a complicated and contentious process, he emphasized it’s also been cooperative and deliberative.

All Medicaid demonstration waivers carry substantial requirements around monitoring and evaluation, “but we know these are even more important when we are taking the bold and innovative steps we are taking here,” Azar added.

“As part of the waivers we’ve granted, we’ve set careful guardrails that require states to protect their most vulnerable beneficiaries, and only required community engagement from beneficiaries whose circumstances allow them to participate. We’re also attentive to the paperwork burdens imposed on both beneficiaries and states, although we believe the benefits of setting the right incentives can far outweigh these costs. All of these costs and benefits will be carefully evaluated for each waiver we approve.”

While both the federal government and state governments invest a significant portion of their budgets in the Medicaid program, to succeed, more than money from both sides is needed to achieve Medicaid innovation, he said.

“At the federal level, this administration is willing to offer historic flexibility for programs to innovate.” In return, we expect state commitments to invest in innovations and produce results, he continued.

There is tremendous potential for this approach to confront the serious health challenges our country faces. (We believe) progress has already been made on these challenges, and I believe more is around the corner.”

Azar encouraged all Medicaid directors and stakeholders to contemplate how they can promote community engagement. “In setting up the demonstrations, we’re building on a robust academic literature that shows community engagement, such as employment, can have substantial benefits for well-being.” Finding work, he continued, is associated with significant improvements in mental and physical health — and programs set up to improve Americans’ health should, where feasible, reflect that.”