Managed care means less funds for treatment

May 16, 2011 

20090623 Deluded care

300 dpi Mike Miner color illustration showing drawing of doctor that has been torn, then patched up with Band-Aids. Can be used with stories about fixing the health care system. The Chicago Tribune 2009

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MINER — MCT

At issue | Various reports, opinions on plan to save Medicaid dollars with managed care

Gov. Steve Beshear has signed the "managed care" provision which will have a substantial impact on Medicaid.

First, managed care will use existing dollars for services to pay for a layer of bureaucracy between the Medicaid Department and providers that will sop up about 20 percent of the budget in fees and profits, leaving less available. Funds for services will be cut about 20 percent without saving the state one dime.

Any further savings would come from additional reductions to an already-reduced pool of dollars to pay for services. That is counterproductive to helping people unable to pay for their own care.

Second, going to managed care makes the state Medicaid office look like an ineffective bureaucracy that can't do its job. Are there provisions for cutting the size of the department? If not, whatever happened to downsizing government?

Some would argue the government is not increasing in size because the managed-care organization would be a separate not-for-profit or for-profit. But that would be a bit disingenuous.

Third, the total funding for Medicaid in the Northern Kentucky area is about $362 million, but funding for behavioral health care (mental health and substance addiction) makes up only 2 percent of that — about $7.24 million.

Cutting 20 percent would mean $1,448,000 less for services. Add to that the governor's 4.5 percent Medicaid cut for another $325,800. In total, $1,773,000 will be taken from a $7.24 million budget while need is increasing.

Fourth, Medicaid outpatient behavioral health care reimbursement rates have been flat for more than 10 years. The population in the eight-county Northern Kentucky region has grown 12.0 percent since the last census. Data show the number of people needing those services has grown along with the population.

The cost of hiring staff also has risen. As a result, our cost of delivering a service is higher than the reimbursement rate, yet funds are to be cut by almost a quarter. That is outrageous.

Fifth, the government and the legislature could help if they could change Kentucky's Medicaid rules to allow for direct funding of substance-abuse services. That would allow Kentucky to apply for matching funds, currently set at 20 percent Kentucky and 80 percent federal.

Just $200,000 makes Kentucky eligible for $800,000, providing $1 million for services.

Proper treatment for substance abuse also gets more individuals into recovery, thus reducing expenses for health issues in general. People take care of themselves better, reducing the need for more expensive health care for the preventable diseases associated with chronic substance abuse.

Sixth, the timing for the request for managed care proposals and implementation is too short. They were just released and are due back by May 26 with implementation July 1. The state is rushing headlong into chaos.

It amazes me that with all the information we have given to legislators on meeting the needs of people with mental health and substance abuse issues, it has produced something that is not only not helpful, it is downright destructive.

Edward L. Smith Jr., of Park Hills, is a charter member of Northern Kentucky's Mental Health/Substance Abuse Regional Planning Council.

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