Ohio’s behavioral health redesign is intended to increase access to care, but could cause some agencies to close.

CANTON  Changes to Ohio’s Medicaid system are financially squeezing local behavioral health agencies at a time when mental health and addiction services are in high demand.

Agencies warn their financial outlooks could worsen if the state moves forward with the second part of its long-planned overhaul and turns over Medicaid billing to managed care companies July 1.

One local agency has already closed its mental health and alcohol and drug counseling program in response to the changes, and others said they have had to divert staff from caring for clients to navigating a new and complex billing system.

Joe French, chief executive of Child & Adolescent Behavioral Health, likened the situation to a rough day at the beach.

“We’re in the ocean, we got knocked over, we’re trying to stand back up and every time we think we have firm footing, something else comes, a new change comes and we have to react,” French said.

Overhauling Medicaid

The Governor’s Office of Health Transformation, Ohio Department of Mental Health and Addiction Services and Ohio Department of Medicaid started talking about revamping how Medicaid pays for behavior health services three years ago.

The so-called behavioral health redesign is intended to bring Ohio’s behavioral health providers in line with insurance codes used by medical providers and most other states.

The revamp has changed reimbursement rates for services, added new payment codes for services such as inpatient addiction treatment and peer recovery support, and generally created a more complex matrix of billing codes.

Ideally, the changes will expand access to behavioral health services, said Tracy Plouck, director of the Department of Mental Health and Addiction services.

“Over a longer period of time, we will have additional services that can now be reimbursed through Medicaid,” she said.

But the changes could actually cut access in the short term.

Impact on providers

Originally slated to take effect at the beginning of 2017, the state delayed the coding and reimbursement changes until January of this year.

Provider agencies have struggled with cash flow during the transition.

Six in 10 behavioral health providers have gotten less than 80 percent of expected Medicaid revenue under the behavioral health redesign, according to a survey last month of more than 100 members of The Ohio Council of Behavioral Health & Family Services Providers.

Some 56 percent of providers reported having less than 60 days of cash on hand and 37 percent had less than a month’s supply.

To get by, some agencies have borrowed on lines of credit.

CommQuest Services, a Canton-based treatment provider, sees 20,000 clients a year and about 60 percent of its $20 million revenue comes from Medicaid, said Keith Hochadel, president and chief executive.

The new billing codes and most of the reimbursement rates aren’t bad things, said Hochadel, a past president of The Ohio Council of Behavioral Health & Family Services Providers.

But getting paid through the complicated system has been a problem.

Prior to the new billing codes, Medicaid denied about one in 10 of CommQuest’s claims, which can number as many as 5,200 a week, Hochadel said.

Now, the denial rate is almost four out of 10 claims, and even though most are eventually accepted, CommQuest has had to hire two workers for its billing department to iron out the problems, Hochadel said.

Child & Adolescent Behavioral Health has had a similar experience. Because of changes by the state, French said, his agency wasn’t able to start training and testing the billing system until during the holidays.

“January 1 hit and it looked like the bottom dropped out for our financials,” French said.

Like CommQuest, Child & Adolescent Behavioral Health hired another worker to do billing, and dipped into its line of credit.

French said the revenue crunch would get worse when Medicaid hands reimbursement to managed care companies, adding another layer, including pre-authorization rules, to an already complex system and cutting cash flow.

Stark County Mental Health and Addiction Recovery has tried to help local providers make the transition. The county board brought in consultants as early as 2016 to help local agencies analyze how the redesign would affect them, and more recently has provided IT assistance.

To keep cash flowing and allow local providers to concentrate on Medicaid billing, Stark MHAR has paid agencies an estimated monthly amount for board-funded non-Medicaid services with the expectation the agencies will submit bills later in the year.

Stark MHAR’s payments have helped, but the state should delay the managed care switch until July 2019, Hochadel said

“We ought to be focused on client care, and this distracts us from building programs and services,” he said.

Stark MHAR CEO John Aller said he sees clients benefiting in the long run from the changes Ohio is making, but no matter when managed care takes effect, it’s going to cause pain for local providers and some will likely close or merge to survive, until the billing system is paying on time.

“I do think the first year’s going to be significantly challenging,” Aller said.

Meanwhile, the clock on the Department of Medicaid’s website is counting down to the deadline.

In an email, Ohio Medicaid spokeswoman Melissa Ayers said the department had helped and would continue to help providers make the transition through the July 1 deadline and beyond.

Changing course

An example of how behavioral redesign has already changed the treatment landscape is Domestic Violence Project Inc.’s decision to close its Renew Counseling and Recovery Center.

Domestic Violence Project Inc. started Renew about 25 years ago so clients didn’t have to risk their safety by leaving the shelter for treatment. Over the years, the program grew from a single counselor into an income generator for the not-for-profit agency.

Behavioral health redesign changed the math.

The agency would have had to hire three to four workers to “bill and chase dollars,” and didn’t have the cash reserve needed to survive payment denials and red tape during managed care, Executive Director Cheli Curran said.

“Those two things are what put Renew out of business,” she said.

Domestic Violence Project Inc. cut staff and transferred the approximately 75 Renew clients to other providers.

Curran said the change helped the agency to refocus on its core mission.

Only 14 percent of Renew clients were staying in the shelter — the majority were referrals from other agencies — and closing Renew created space for 10 more beds.

“Going back to our core mission, we knew that what we needed was to focus on emergency housing,” Curran said. “There were over 400 people we couldn’t house last year because we didn’t have space.”

Reach Shane at 330-580-8338 or shane.hoover@cantonrep.com

On Twitter: @shooverREP

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State Medicaid changes squeeze mental health, addiction agencies