Until last week, Medicaid appeared to be on the chopping block, with Republican lawmakers in Washington preparing to make deep cuts to the federal health insurance program for low-income and vulnerable people through a massive overhaul/repeal of the Affordable Care Act.
Nonprofits, advocacy organizations and individuals were vocal in their opposition to these proposed cuts, arguing that they could hurt some of the most vulnerable citizens. Then, last week, those plans went awry, when Senate Republicans failed to muster the majority needed to pass their health-care reform plans.
The fate of the ACA — and Medicaid — is now in limbo, but most experts believe that future cuts to the program are likely.
I wanted to understand more about the potential impact that Medicaid cuts could have on people living with mental illness and addiction, so I called Tim Walsh, Minnesota Adult & Teen Challenge vice president of long-term recovery and mental health services.
Right off the bat, Walsh schooled me in the terminology: “Federally, these funds are called Medicaid,” he explained. “In Minnesota, they’re called Medical Assistance.” Then he began to list Minnesota mental health and addiction programs that he felt could be affected by cuts to Medical Assistance. The list was long, and Walsh didn’t pull any punches.
MinnPost: What impact could federal cuts to Medicaid have on mental health care in Minnesota?
Tim Walsh: In Minnesota, Medical Assistance affects the whole continuum of mental health services. We have used Medical Assistance quite assertively in this state to support the infrastructure of mental health systems. It’s integral to everything we do. If you take Minnesota Adult & Teen Challenge as an example, approximately 90 percent of our clients are on Medical Assistance in one form or another. And that’s just one little snapshot.
MP: Can you explain just how embedded Medical Assistance is in Minnesotans’ mental health care?
TW: If you look at the whole continuum of services, from early intervention into mental health outpatient services, for people who qualify for Medical Assistance, the program pays for all diagnostic assessments, all psychological testing, all treatment planning services, all mental health services, including individual counseling, group counseling, couples’ counseling, group therapy, multigroup therapy. Everything we think about as an intervention into mental health, Medical Assistance pays for some of that.
If a person sees a therapist at a community mental health clinic, the clinic would be taking Medical Assistance dollars to pay for services. Medical Assistance also pays for community health centers and outpatient clinics. Some services in residential treatment facilities are paid for under Medical Assistance. And if someone has to have hospitalization when they are in psychiatric crisis, those services are paid for under Medical Assistance.
MP: What about Minnesotans who live with serous mental illness and receive ongoing care? How would their lives be affected by Medical Assistance cuts?
TW: There are about 226,000 people in Minnesota who have a serious and persistent mental illness (SPMI). In order for them to stay in the community and lead healthy, independent lives, they need community services and support. Medical Assistance pays for that as well. The government has a strong interest in people staying out of institutions. They are interested in seeing people living in the community as independently as they can.
People in that situation need medication management for their psychotropic medications. They need medication management and case management. Their case manager is paid for partly through Medical Assistance. There are also whole range of supports, including independent living skills and peer specialists that are paid for by Medical Assistance.
MP: Could cuts to Medical Assistance have an impact on the lives of people with substance use disorder?
TW: Medical Assistance does not just cover mental health. It also covers addiction issues and the co-occurring disorders of mental health and substance use. Medical Assistance pays for outpatient chemical dependency services and inpatient short-term services at facilities like ours. It can provide for outpatient services while someone is in a residential housing facility.
MP: What about Minnesota’s mental health crisis services? Are they funded through Medical Assistance?
TW: Yes. Medical Assistance helps to pay for mental health crisis services, including telephonic counseling, outreach and mobile crisis teams. If people require hospitalization or day treatment or long-term mental health services, Medical Assistance also pays for that.
MP: Can you explain the reforms as outlined in the health care plans that have been proposed?
TW: Two Medicaid reforms were being considered under the House and Senate health care plans. One was a per-capita payment based on each state’s population. The other was a block grant based on the prior year’s funding plus an inflator, which budgets for inflation.
MP: What’s your opinion about these approaches?
TW: Health care advocates call them a “decrease on the increase.” Medical costs are rising faster than inflation. Over time, it will mean that even if the government factors in an inflator, because the cost of medical services are rising faster than the cost of inflation, the end result will be decreased services and more managed services statewide, which will drive out more providers. When that happens, fewer services will be available to clients.
MP: Would the impact of these kinds of cuts be different in Minnesota than in other states?
TW: I happen to think that Minnesota is expertly managed as it relates to Medical Assistance, our provider systems and our nonprofit managed care organizations. When it comes to Minnesota, I think the answer is that we would actually be affected less than states that are managed more poorly. If our state is given more freedom and more autonomy to manage dollars and target those dollars to more evidence-based practices and the supports that help people stay in the community, do I think Minnesota will do pretty well with compared to other states? Actually I do, but my larger concern is for other states with poor management. When you start messing around with essential benefits, some states are going to cut those pools of funds that are the most expensive and hardest to manage. The most expensive and hardest to manage funds are mental health and addiction services. With the opioid epidemic in this country, that would be a horrible time to cut those dollars.
MP: Can you explain what sets Minnesota apart from other states?
TW: People like Sue Abderholden from NAMI, state lawmakers and other advocates have worked together to create a modern, integrated set of mental health services that work well together based on people’s needs. Many of these services are paid for by Medical Assistance.
I think Minnesota is going to do better than other states because we are managed better. We have a better system. We have better insurance. We have better managed care. Our provider system is sophisticated. We have better services. But even the increase we anticipate will not keep up with inflation in medical services. Therefore the revenue will lag behind the costs. We will have to decrease the amount, duration and the intensity of services we provide. That’s what we’re predicting and that’s our concern.
MP: Earlier in this conversation, you said that 90 percent of Minnesota Adult & Teen Challenge’s clients are on Medical Assistance. How could funding cuts impact the care your organization provides?
TW: Like most nonprofits, Adult & Teen Challenge understands how to operate close to the bone. Because we have a lean cost model and we have generous donors that provide for things like our buildings, our capital costs and scholarships, that decreases our overall costs. We are able to provide our services at one-fifth of the cost of the state’s highest-cost providers. But, because we are so lean, that also means we don’t have many places to cut. We’re already a nonprofit. We compensate at a nonprofit level. We are creative about funding overall services with group residential housing combined with Medical Assistance and commercial insurance, but if you cut Medical Assistance rates, we’re going to have to decide whether we’re going to be able to provide all of those services. You can’t operate an organization less than cost. That’s nonsensical. Even Adult & Teen Challenge, as lean as we are, will have to decide what services we can and can’t provide under a new funding source.
MP: Do you feel like your organization is in financial limbo right now?
TW: In order to provide the services we provide, we have to sink tens of millions of dollars into the facilities we have. How do you plan for the future if you don’t know what the future is going to be? Right now only one out of nine people in Minnesota who needs mental health and addiction treatment are getting that treatment. If we wanted to expand those services statewide so we are helping one in eight people, how would you do that in this policy environment without jeopardizing our entire organization?
When you have an uncertain policy environment, people don’t know how to prepare for the future. So they start acting conservatively. I understand that impulse. As good stewards of an organization, you don’t want to stretch your funding too far. If you stretch too far, you can jeopardize everything. We don’t have the luxury of hoping that the funding is going to be there. We have to work with what we know.
MP: So that means you are forced to act conservatively?
TW: You could say that. We’re opening up a women’s facility in Rochester on November 1. Last year we added beds in our Brainerd facility. Two years ago we opened a boys’ facility in Buffalo. We are not being so conservative that we are not trying to meet needs, but if we knew what was going on with Medical Assistance, we would know if we could expand to meet more of the needs that are already out there.