Vermont can use Medicaid money to pay for psychiatric care, providing stability to the state’s mental health system.
On Tuesday, the federal Centers for Medicare and Medicaid Services granted a “waiver,” allowing the state to use federal money to pay for short-term mental health care in the state’s larger institutions. The existing funding source was set to run out.
The waiver makes certain that the state will have a steady stream of money to fund beds in psychiatric hospitals. Lawmakers say the money will ensure that Vermonters can get the mental health care they need, keep patients out of emergency rooms, and provide a reliable source of funding for hospitals. Vermont received the second such waiver from the feds; the first went to Washington D.C., earlier this year.
Hospitals with more than 16 beds are eligible; in Vermont, that includes the Vermont Psychiatric Care Hospital in Berlin and the Brattleboro Retreat. The cash can be used for Medicaid patients age 21 to 64 who experience “serious mental illness” or “serious emotional disturbance.”
The waiver frees up roughly $13.4 million a year, said Director of Health Care Reform Ena Backus, replacing the other funds that had been used. The new money will be available on Jan. 1.
Without the waiver, the state would have faced “literally a crisis” trying to pay for the Medicaid patients at Brattleboro Retreat, said Jeff Tieman, executive director of the Vermont Association of Hospitals and Health Systems. “This enables us to continue operating Vermont Psychiatric Care Hospital, while fortifying Vermont health care.”
Rep. Anne Donahue, R-Northfield, a mental health advocate, called the funding “critically important to this state’s financial status.”
WIthout the money, the Medicaid patients at Brattleboro Retreat — about 40 patients at any given time — would not have been able to pay for their health care, according to the Retreat’s CEO Louis Josephson.
The new waiver requires the state to encourage outpatient psychiatric care and maintain a statewide average length of stay of 30 days or less for the Medicaid patients at the two hospitals. The state’s current average is 16 days.
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Vermont applied for the waiver last year and it was awarded last week. The change comes in the form of an amendment to the state’s Global Commitment to Health Medicaid waiver, which allows the state flexibility in its health care spending.
The federal government has been trying to phase out funding of long-term psychiatric care in order to focus on community-based care. Vermont had been paying for Medicaid patients to receive mental health care, but that funding — which came from another Medicaid program — was going to be phased out.
Without a waiver, the larger psychiatric hospitals would have been on rocky financial footing — or even forced to downsize, Donahue said.
Donahue said the fed’s focus continues to be on community care but properly funding the larger institutions is also necessary.
“It’s important to our overall ability to ensure access to appropriate care,” she said.
The waiver also requires the state to reduce the time patients spend in the emergency room, cut down on readmissions to hospitals and increase access to outpatient mental health services.
The federal money does have limitations; the waiver won’t cover inpatient care for more than 30 days. It also won’t pay for forensic mental health patients who aren’t fit to stand trial or have been convicted of a crime.
Josephson said he’d work with the state to make sure the costs for those forensic patients are covered through other funding sources. They make up a small percentage of the total population at Brattleboro, he added. “No one’s going to get cut off at 60 days,” he said.
Overall, the change won’t save the state money; Vermont will still pay its portion of the total cost, according to Backus, the director of health care reform. But it will put the state on sure financial footing and allow flexibility for other Medicaid spending.
It’s a very technical thing that has real impacts on real lives,” Josephson said. “It is good news for Vermont.”
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