Joint Medicaid Oversight Committee: Medicaid Budgeting and the Behavioral Health Redesign

On September 21, the Joint Medicaid Oversight Committee (JMOC) met to discuss the state budget process and the Behavioral Health Redesign and, on September 22, the state convened one of its regional forums on the redesign for providers. These two events can demonstrate how policy is discussed in the context of committee and the practical effects these discussions may have on the behavioral health system.

In JMOC, Directors Barbara Sears and Tracy Plouck presented on the Medicaid budget and the behavioral health redesign. To frame the conversation, the administration presented its current biennial funding scheme as a “gap,” citing the lack of policy tools authorized by the General Assembly in the most recent budget process. As they explained, cuts to hospital rates and adjustments to hospital supplemental payments and managed care were necessary to achieving budget neutrality in the appropriation expectations set by the legislature. This framework was not well-received by members of JMOC who made claims that the acceptance of the budget by the governor may be unconstitutional, that efforts to control costs could be made at the expense of providers and the clients they serve, and that the Ohio Department of Medicaid did not have the adequate legal authority to change payment rates. Specifically in regard to redesign, several members voiced concerns that the current budgeting proposal, and the redesign itself, could cause complications in the delivery of care for individuals with mental illness or substance use issues.

Interestingly, the context of this conversation seems to overlook the policy fundamentals of JMOC and Medicaid budgeting. First, JMOC, as we have written about previously, is legally obligated to establish a spending growth rate for the program which the Medicaid director must adhere to in the executive proposal to the General Assembly. This means that any spending associated with the program is primarily shaped by JMOC. Second, the initial JMOC target was exceeded by the director’s budget request to the General Assembly, something which was later clarified as being a symptom of casemix methodology which did not accurately capture the number of aged, blind, and disabled in Ohio’s program. Third, the General Assembly, being constitutionally obligated to establish the appropriation levels for Medicaid, did not enact the policies associated with the director’s request, leading to the current gap in funding. Last, it is important to note that appropriations and spending are not the same thing, meaning the director will only exceed the appropriation once the spending outstrips the levels set because Medicaid is an ongoing reimbursement program dependent on federal match. As such, the claims of budget unconstitutionality are inaccurate.

With this background, it is curious as to why members of JMOC, represented by policymakers who ultimately determine appropriations, would criticize the director and the administration for using the legally authorized abilities to manage rates, especially in the context of the redesign. Ultimately, if the General Assembly felt as though the appropriations were insufficient and that providers needed to be protected, they had the growth target and the biennial budgeting process to address those concerns. What’s more, it demonstrates why placing rate authority with the General Assembly would make it difficult for Medicaid to meet the day-to-day demands of the program as it appears the connection between rate construction, appropriations, and growth targets is not comprehensively understood by policymakers – a problem which would only stifle efforts to control costs and achieve value in Medicaid.

On the ground, this friction between the branches can be felt first-hand by providers. Since the announcement of the redesign a few years ago, providers have been advocating their position with policymakers to address their concerns with the changes in Medicaid reimbursement and the carve-in into managed care. This advocacy, which has been documented in previous blogs, has led to several delays and adjustments in funding for the redesign. Moreover, the administration has ramped up its efforts to educate providers and the public about what redesign entails and how that affects their business processes through a website, continual email communications, and in-person trainings.

One example of this effort to educate behavioral health providers is the series of regional forums being held by the plans in collaboration with the state. During these forums, providers learn specific information about contracting with managed care organizations (MCOs), ask technical questions, and meet key contacts from each of the plans. At the most recent of these forums in Columbus on September 22, providers were updated on the adjusted redesign implementation timeline and received a crash course on managed care, covering details on contracting and credentialing, the prior authorization process, and supports available to providers. Representatives from the plans stressed the importance of contracting with plans early in preparation for the go-live date on July 1, 2018. To provide some flexibility for the providers, rates have been locked in by the Department of Medicaid for the first year of the new system, though the managed care plans expect to use year one as an opportunity to collect key data on patient outcomes across providers as they prepare to move to a value-based reimbursement model in the years ahead.

With the evolution of this conversation with providers, the Ohio departments of Medicaid and Mental Health and Addiction Services play a key role in managing the necessary flexibility system transformation requires. Despite the concerns of policymakers on JMOC, it is the very authority of the administration in the development of rates, contracting, and benefit design which has allowed for the redesign to become more successful. While some may argue that the redesign is not necessary or is potentially harmful to access and quality, it does represent the most apparent effort of the state to address cost and integration for one of the most complex and expensive populations in Medicaid. If anything, the fact that this is an initiative of the administration means that future adjustments can be made more easily and nimbly as the transition unfolds.