Allison Hamblin, MSPH

July 14, 2016

This post was originally included in a special report, The Politics of Mental Illness and Addiction, from the Washington Monthly.


Driven by opportunities to improve care coordination and reduce avoidable costs, state and federal policymakers are taking steps to integrate medical and behavioral health services and improve health outcomes.Behavioral health issues — mental illnesses and substance use disorders — rarely occur in a vacuum. Many individuals with mental illness or substance use issues also suffer from chronic physical ailments, including diabetes, asthma, and heart disease. All too often, physical needs are ignored due to unresolved and overwhelming behavioral health issues, resulting in costly and frequent emergency department visits and hospital stays. Likewise, many individuals who are hospitalized for acute medical conditions either have or may be at risk for developing a behavioral health condition. Among the highest Medicaid users of hospital care in New Jersey, for example, 80 percent have a behavioral health diagnosis.

Spending for Medicaid recipients with a behavioral health diagnosis is nearly four times higher than for those without. The average yearly Medicaid costs for someone with diabetes, for instance, are below $10,000 for those with no behavioral health condition, but more than $35,000 for those who have a mental illness and substance use issue. As many as one in five Medicaid beneficiaries has a behavioral health diagnosis, and this population accounts for almost half of total Medicaid expenditures.

Historically, the nation’s health care safety net has separated treatment of physical and behavioral issues, treating body and mind independently and not providing “whole-person” care. This approach ignores the role of mental illness and substance use as a cause of many medical conditions. In some cases, this may be because behavioral health issues overwhelm an individual’s ability to focus on physical health problems; in others, as can happen with substance use disorders, the medical conditions develop as a consequence of untreated behavioral conditions.

Stories of Medicaid beneficiaries are complex and diverse: Jerry, a 52-year-old alcoholic who went on disability after a job-related injury and became addicted to opioids, has visited the emergency department 15 times over the last year for gastritis and pancreatitis. Sharon, a 43-year-old grandmother with severe depression, diabetes, and spinal disc degeneration, became unable to manage her complex health needs and was hospitalized half a dozen times within twelve months. Kevin, a homeless 31-year-old with bipolar disorder, visits the emergency department frequently, and has been in and out of jail eight times in the last three years for disruptive behavior and petty crimes.

A prevailing theme for these individuals is their lack of access to coordinated physical and behavioral health services. State and federal policymakers are increasingly focusing on the need to better coordinate care for this population, not only to improve health and generate potential cost savings, but also to help reduce homelessness, end the cycle of repeat jail visits, and improve this vulnerable population’s overall quality of life.

Federal Push to Accelerate Integration

Innovations made possible through the Affordable Care Act (ACA), plus growing recognition of the prevalence of behavioral health needs among high users of health care, are fostering the integration of behavioral and physical health services. Under its Innovation Accelerator Program, launched in 2014, the Centers for Medicare & Medicaid Services (CMS) is helping states advance new payment and service delivery reforms, including efforts that seek to improve care for those with substance use disorders and co-occurring physical and behavioral health conditions. With CMS support, states are developing new data tools, quality measurement strategies, and payment arrangements that support more coordinated care.

Through the Mental Health Parity and Addiction Equity Act, health insurers must now cover behavioral health treatment at the same level as medical care. Under Medicaid expansion, states must provide newly eligible populations with more robust behavioral health benefits than they previously offered. A new federal initiative will create “certified community behavioral health centers,” with heightened requirements for delivering integrated care to individuals with serious behavioral health needs. In addition, current regulatory reform efforts aim to reduce barriers to care coordination imposed by 42 CFR Part 2, a federal privacy law governing the exchange of information related to substance use disorders.

State-Level Thrust for Improved Mental Health and Substance Use Care

On a parallel track, the urgency to address the many costs of poorly coordinated physical and behavioral health services is building at the state level. One of the key places this is playing out is in managed care, in which more than 70 percent of all Medicaid beneficiaries are enrolled. Traditionally, most states have excluded specialty behavioral health services from managed care arrangements, either leaving those services unmanaged or contracting with a separate entity to administer behavioral health benefits. A few innovator states, including Tennessee and Minnesota, have long integrated services within a single managed care plan to provide a more holistic focus, but until recently few other states have done so, due to the many complexities associated with this major system overhaul.

More recently, the momentum has increased, with at least 16 states now providing or planning to provide behavioral health services within an integrated health plan. These states, including Arizona, Florida, Kansas, New York, and Texas, are testing care delivery models that make one entity accountable for physical and behavioral health services. With greater ability to identify and address a more complete array of health needs, as well as bottom-line incentives to prevent avoidable and costly hospitalizations, the end result promises to be more seamless care for beneficiaries.

Creating a “Home” to Fully Address Physical and Behavioral Health Needs

Other innovations are springing up across states to better serve individuals with behavioral health needs, improve health outcomes, and reduce unnecessary health and social service outlays. Medicaid “health homes,” for example, made possible under the ACA, give states a mechanism to pay for the intensive care coordination required for individuals with chronic conditions. Currently 21 states and the District of Columbia are operating a total of 30 health home programs for high-risk patients, two-thirds of which specifically focus on adults with severe mental illness. These unique programs are not a physical home; they can be based in a primary care or behavioral health provider’s office or offered virtually. Wherever care is “housed,” services must include comprehensive care management, transitional care and follow-up, and referrals to community and social support services.

Missouri, for example, established Medicaid health homes throughout the state’s 29 community mental health centers. Beneficiaries with behavioral health issues receive mental health treatment from providers who also coordinate medical treatment needs and provide links to social supports, functional skills training, and post-hospitalization services. Within its first year of operation, the program has saved nearly $100 per month per beneficiary, resulting in $31 million in Medicaid savings linked to reduced emergency visits and hospitalizations and significant improvements in health outcomes.

Leveraging the Power of Peer Supports

Providing a personal connection with peers is one of the most successful strategies for gaining the trust and receptiveness of patients to seek and stay in mental health or addiction treatment. Project Engage, an initiative of Christiana Care Health System in Delaware, uses a team of individuals who have successfully recovered from addiction to build relationships with hospital patients with substance use disorders. Early results show that over 40 percent of patients seen through Project Engage successfully enrolled in substance use disorder treatment, resulting in significant savings from reductions in hospital and emergency admissions. This program is now being replicated across several hospitals in Pittsburgh. A similar effort in Rhode Island targets individuals visiting the emergency department for an opioid overdose. The AnchorED program connects patients with peer recovery coaches who provide support and resources and, perhaps most importantly, a sympathetic ear. Since the program started, 80 percent of patients have engaged in some type of recovery services.

Reducing the Role of Jails as DeFacto Mental Institutions

Because many individuals suffering from mental illness and substance use disorders cycle in and out of jail, connecting people to the care they need to avoid incarceration is a high priority for municipalities and states. For example, in May 2016, Maryland officials announced a first-ever proposal to reduce Medicaid eligibility requirements for individuals upon release from incarceration, with the goal of providing immediate coverage and access to needed  services — including behavioral health treatments — upon reentry into the community. Individuals enrolled through this expedited process would receive coverage for 60 days, at which point standard eligibility determination requirements would resume.

Moving Forward

At present there is no comprehensive fix to improve care for people with behavioral health issues. But through innovations occurring in states across the country, the health care system is moving toward whole-person care on many fronts. Ensuring that people get coordinated behavioral and physical health care will help to keep them out of the revolving door of emergency care and inpatient stays, improving the health and quality of life for many.

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