By Rose Hoban

As North Carolina Medicaid changes from being the current fee-for- service system in the next two years to being a one run by large managed care organizations, leaders in the mental health system will have to rethink how they deliver care.

That was the message at the annual meeting of the state’s public mental health managed care organizations (known as LME-MCOs) in Pinehurst this week.

Right now, a behavioral health patient with Medicaid in North Carolina sees a mental health provider, but care often “stops at the neck” and the patient’s physical health needs can go unaddressed. Under the vision outlined by the General Assembly and by the Department of Health and Human Services, that’s going to change profoundly. What they’re looking for is a way to integrate behavioral and physical health care.

It’s a vision that’s being embraced by the North Carolina Council of Community Programs, which until now has been the umbrella organization for the LME-MCOs. The council is changing its name, its mission statement and its board of directors to position itself to represent all the new players who will be involved in mental health services once Medicaid transforms to managed care, probably in 2019.

“It’s a recognition that things have been changing with the LME-MCOs,” said Mary Hooper, head of the council. “In fact, it’s a recognition of the larger environmental changes that have been occurring now for five, six, seven years.”

And even as the conference hallways were filled with gossipy conversations about the DHHS takeover of Charlotte-based Cardinal Innovations, inside the meeting rooms, people were focused on the changes ahead.

“You should not be surprised this is happening here because it’s been the trend around the country for some time,” said Joe Parks, who served as Missouri’s Medicaid director as that state transitioned to managed care. Parks noted that in the past two years alone, Medicaid programs in 46 states have been reforming how they pay for Medicaid programs and changing their systems of care, usually in the direction of managed care.

“Payers want lower costs… they would like better quality,” he told a packed room. “Payers want predictability. This is a major reason that state governments like managed care, it avoids unexpected budget increases when something like hepatitis drugs get very expensive. It smooths out the costs over time.”

Parks said that state officials want integration of mental and physical health services, “but they’re not always clear what that is.”

Below the neck

Behavioral health patients are “high cost, high utilizer people who are without primary health care, who go to the emergency departments very frequently, who cost the system enormous amounts of money,” said Brian Sheitman, a psychiatrist who is the medical director of WakeBrook, the Raleigh mental health treatment center managed by UNC Healthcare. “If we can proactively treat them, it’s a win, win, win for everybody.”

Sheitman is one of the few people in North Carolina already practicing “integrated care” for people with serious mental health issues, such as bipolar disorder or schizophrenia. At Raleigh’s WakeBrook, he is part of the team that’s developed a primary care “medical home” for these patients, to not only address what happens in their heads, but in their hearts, and lower backs, and with their blood sugar levels.

Data show that people with severe mental health issues die 20 to 25 years earlier than their peers, a combination of lifestyle issues that include much higher rates of smoking, weight gain from medications, lack of self care and, for many patients, an aversion to seeing the doctor.

“I hate going to the doctor myself, I despise it,” Sheitman said, noting that 10 minute doctor visits are unsatisfying for everyone, patient and provider. This leads to burnout among primary care staff.

“People leave and turn over and go to different jobs all the time, this is annoying for most of us, but for people with serious mental illness, stability of the workforce is essential,” he said.

His practice at WakeBrook primary care allows for longer physician visits to address more of the complicated issues behavioral patients have. And everyone who works at the practice, even the receptionist, has worked with mental health patients before. Plus, if a patient shows up dealing with mental health issues at that moment, there’s someone down the hall who can help.

WakeBrook has been collecting data to show that even though this extra service in the primary care setting costs extra money up front, it saves money on the back end in the form of fewer emergency room visits, fewer behavioral health admissions and even fewer medications.

Sheitman’s budget only covers about two-thirds of the cost of the primary care costs. The rest is covered by a federal grant, which runs out in two years, and by the practice affiliation with UNC.

Sheitman is looking forward to managed care because his patients would require an extra investment of about $400 per year to make the model work. This cost would be borne by managed care companies that will become responsible for all the costs of a patient: primary care, ED visits, psychiatric admissions, medications, the works.

“You avoid one ED visit a year, you’ve saved a thousand,” he said.

But he said the current fee-for-service system doesn’t make this type of care cost effective, because it’s hard to “see” that savings.

Better business models

“When we reformed the mental health system more than a decade ago, we eliminated a community  system and it became mental health services for people with Medicaid,” said Bebe Smith, a clinical social worker who once taught at the UNC Department of Psychiatry and at the School of Social Work.

“So, many of the private providers were set up to just bill Medicaid and they weren’t set up to bill Medicare or private insurance,” she said.

That has skewed the business model, Smith argued, because it’s lead to mental health agencies that have to specialize in one or two specialty services to make the numbers work, or go under and primary care, which doesn’t get reimbursed well, goes undone.

Traditionally, if an agency can bill a commercial insurance company that pays more, the higher reimbursement received can help cover the costs for Medicaid patients with lower payment or the people without insurance at all.

“My hope is that at some point our larger health systems start doing more in terms of providing behavioral health services, because then people will have access to primary care and specialty care and it’ll be one integrated system,” she said

Mike Lancaster described how his organization, SouthLight Healthcare in Raleigh, had a two-year grant to provide primary care to mental health patients, about a third had Medicaid, a third had commercial insurance and a third were uninsured.

“What we were hoping for was the expansion of Medicaid because the 35 percent of the people who were indigent would have qualified for Medicaid,” he said. “So when the legislature didn’t expand Medicaid, we had 35 percent of our population we couldn’t afford to provide primary care services to.”

He said the primary care practice “limped along” for two years after the grant ran out until the lack of reimbursement became too much. Now, the treatment rooms for that practice sit empty.

“We have a turnkey operation, we’ve got empty rooms ready to go,” Lancaster said. Those rooms are waiting for payors who will pay for the whole patient.

As for managed care?

“Bring it on,” he responded.

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Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...