RD743 - Special Report: Medicaid Behavioral Health Services Realignment – December 1, 2019

Executive Summary:

Medicaid is the largest payer of behavioral health (BH) services in the Commonwealth and spent $862 million on these services in 2017. BH services are an essential part of whole-person healthcare within the Medicaid program, as nearly 1/3 of members have a BH diagnosis. While BH services play a critical role in the wellness of members, the current array of services available through Virginia’s State Plan is outdated, lacks integration of, and support for, evidence-based practices and has not manifested strong outcomes. Virginia’s Medicaid-funded BH services are characterized by an overreliance on intensive treatment services and underdeveloped opportunities for prevention and early intervention. The current service system is not structured to effectively manage member needs, promote the implementation of gold-standard practices, support alleviation of the significant psychiatric bed crisis, or successfully align with other state investments to improve access to high quality services (e.g. STEP-VA, Families First Prevention Services Act (FFPSA) Implementation, Department of Juvenile Justice transformation, Department of Education school-based health services task force). Virginia currently ranks 40th in the country for mental health care access and 41st in terms of mental health workforce supply. To improve Virginia’s BH system functioning and promote resiliency and recovery for Medicaid members, changes to the current service structure and adjustment to rates that support new services and promote fidelity to best practice standards are imperative initial steps.

The report summarizes an initial set of 6 critical services. First are the necessary services that are missing from the current Medicaid-funded behavioral health benefit - Partial Hospitalization and Intensive Outpatient. Next are alternatives/redesigns of existing services that drive fidelity to evidence-based models for our most vulnerable members with the most complex needs - Multisystemic Therapy, Functional Family Therapy, Comprehensive Crisis Services, and Assertive Community Treatment. The interagency vision of the comprehensive Behavioral Health Redesign proposal is to work alongside stakeholders on phased implementation that will transform the system’s current focus on high-intensity, acute service delivery, to a robust service array that is cost-effective, trauma-informed and focused on prevention, early intervention and recovery. The proposed phases of Redesign build upon each other but are not contingent upon each other. Each new phase will move Virginia towards the goal of improved access to care and quality of services for the entire system. The six services will be the main components within the redesigned continuum. They are designed to reduce the psychiatric bed crisis, provide evidence-based services for members with the highest needs, and align with other integral BH initiatives such as STEP-VA and FFPSA.