Insurance Policy 1
Running head: INSURANCE POLICY
Insurance Policy for Psychiatric Hospitals
Social Work 646, Cleveland State University
December 4, 2007
Scope of the Problem
The problem addressed in this policy brief is the insurance policy regarding long-term hospitalized patients diagnosed with chronic mental illness. Past policy with Medicaid has excluded institutions that provide psychiatric care from reimbursements of federal funding. The current policy still excludes mentally ill individuals from receiving the care they need because state hospitals have either discharged a large percentage of their patients to community mental health facilities where they will receive funding, or shut down the state hospitals altogether. Some acts have been passed to try to address funding for this population, but it is the author’s opinion that legislation is still insufficient. The proposed policy is to amend Medicaid policy to include the institutions for mental disease in reimbursement so that those who need long-term psychiatric care can receive it through federally funded institutions instead of being forced into the community as unstable individuals.
Past Policy
Past policy for state psychiatric hospitals dates back to 1890 and included mentally ill and the senile elderly (Hunter, 1999). The State Care Act of 1890 closed almshouses that cared for the elderly, leaving the hospitals to work with them. States were seen as the only public administration that could support long-term patients both medically and financially (Davoli, 2003). It was the year 1965 when the Social Security Act created Medicare and Medicaid that funded long-term residential services, such as nursing homes, which allowed the elderly to be taken care of there. Two years before the arrival of Medicaid, Congress established Community Mental Health Centers (CMHCs) which took care of mentally ill patients in the outpatient setting.
The deinstitutionalization and transinstitutionalization movement caused many unstable mentally ill people to be forced into the CMHCs that were federally funded because of the Medicare and Medicaid amendment (Davoli, 2003). In Ohio alone, 93.5% of hospitalized patients were discharged between 1955 and 1994, the sixth highest percentage in the country. This means that in 1955, 28,663 people were being treated in psychiatric hospitals, a number that plummeted to a mere 1,849 by 1994. By discharging the patients into nursing homes or other community centers, the burden for fiscal responsibility was now on the federal government’s shoulders (Fact sheet, 2007). The popular view for rationalizing deinstitutionalization was the belief that antipsychotic medications were formed which was the cure-all for the psychotic patients (Davoli, 2003). Psychotropic drugs were not the main reason for the vast number of discharged patients, however. It was the formation of Medicaid and its exception to cover patients that receive psychiatric care from state-funded mental hospitals. This was named the institutions for mental disease (IMD) exclusion.
Medicaid’s legislative history shows approval for deinstitutionalization as well as Congress’ plan for the state to fund its psychiatric hospitals (Davoli, 2003). The federal government did not see the state hospitals as their duty; rather it was the responsibility of the individual state budgets to provide for the mentally ill. Due to this exclusion, states advanced deinstitutionalization merely for the financial incentive to save money. What is worse is that the CMHCs would be counted as an IMD and would not receive federal money if it contained over 50% of patients diagnosed with mental illness, if it administered psychopharmacological drugs, and had a highly qualified staff. This caused nursing homes to deny psychological medications to the patients as well as ignore their mental illness while providing them mediocre care from unqualified staff, just to receive Medicaid funding. From the mentally ill discharged from the state hospitals that were not active in CMHC programs, most ended up homeless, in prison, or victims of violence and suicide. Therefore, even though the cost-per-day in the state hospitals was more than in CMHCs, the state made up for it later through increased funding in homeless shelters and jails that were flooded by prematurely discharged patients.
Current Policy
In current policy, Medicaid will not cover anyone between the ages of 21 and 65 if they have a brain disease and need psychiatric care in a hospital (Fact sheet, 2007). The federal government’s IMD exclusion to this day does not cover any treatment in any psychiatric hospital or other IMDs. Most people who are severely or chronically mentally ill cannot afford private insurance, so Medicaid is discriminating against these people by not including them in their financial coverage. What is worse is that if one of these clients need medical treatment that is unrelated to their mental diagnosis, “they must be discharged from the IMD, have their Medicaid eligibility reinstated, be treated in a med/surg setting, and then be readmitted to the IMD” (NAMI Policy Paper, 2007). Clients should not have to go through this insurance rollercoaster to meet their basic needs.
The system does not lack the money to help the mentally ill. In 1961, the country spent the equivalent in today’s dollars of $8 billion a year on mental health care (Torrey, 2003). In the year 1997, the government spent $71 billion, nine times more than 1961. The increase in spending does not provide that the mentally ill are taken care of better than they were in the past, however. Federal officials decide where the money goes, and often they are not effective in providing financial support to the right treatment centers. Research is not sufficient for measuring the imprisonment and homeless mentally ill as well as adequate housing and treatment programs for individual states. If the bureaucrats do not have this information then they do not know where to effectively place the federal money. North Carolina’s state hospitals have treated 1,140 patients in 2004 and proceeded to send them to homeless shelters (Jackson, 2006). This number compares with 763 from the year 2000; not to mention that it shut down 441 psychiatric beds in that state alone since 2001. As Jackson states, “thousands of mentally ill homeless patients are simply being recycled in and out of the state’s psychiatric hospitals, with few afforded off-ramps to stability” (2006). Discharge planning is poor and is being addressed by a national 10-year plan that will improve the planning procedures for letting go of patients and getting legislators to make CMHCs a larger part of the budget. In a study done in 2000 linking Medicaid claims files from state hospital patients to care received after discharge, only 20% had visited mental health centers within ten days, according to records (Walkup, Boyer, & Kellermann, 2000). A 2002 study showed that 36% of patients missed their first appointment at a mental health center after discharge, with a main reason being the inability to pay for such services (Massaro, 2005).
In 1983, Congress enacted a prospective payment system (PPS) for acute care in hospitals but excluded inpatient psychiatric facilities, among others (Federal Register, 2006). Congress enacted another act, the Balanced Budget Refinement Act (BBRA) of 1999, to include inpatient psychiatric services in the per diem PPS beginning October 1, 2002 (Thompson, 2002 & Federal Register, 2006).
This year, the Senate passed the Mental Health Parity Act of 2007 that included insurance coverage in individual and group health plans for those diagnosed with biologically based mental illnesses (Covall, 2007; Mental Health Parity, n.d.; & Ohio Mental Health Parity Law Applicable, 2007). However, according to the Ohio Department of Insurance, the Act does not cover Medicaid, Medicare, any federal health care program, and many others (Mental Health Parity, n.d.). So even though it seems as if this law is helpful, it does not affect the clients who are not privately insured.
Proposed Policy
The proposed policy would eliminate the Medicaid IMD exclusion to provide care for the chronically mentally ill (Davoli, 2003). Individuals with mental illness should not be punished for entering a psychiatric hospital and receiving help. Individuals should not have their illness ignored because of financial reasons. Some community services and treatment centers are not adequate in stabilizing an individual and constant supervision is necessary. By prohibiting the mentally ill from receiving federal dollars, the U.S. government ends up hurting society by causing the excluded individuals instability with potential harm to themselves or others when they need immediate assistance.
There should not be a limit to the number of days that a client can stay in a state hospital (NAMI Policy Paper, 2007). Some clients may take much longer then others to stabilize, which is why a cap for treatment should not be established if this exclusion is repealed. The length of stay for a client should be based on their individual clinical need. When the rule is removed, states could then match the federal Medicaid dollars to fund the hospitals, giving an incentive to keep the beds filled and redirect monies from the CMHCs. Directors of the IMDs could take the freed-up money and apply it to their institutions without costing the government too much. This is not stating that funds should be withdrawn from the treatment agencies, but that some cost will be indirectly shifted because of the increase of clients moving from the agencies to the hospitals. Care should not be reduced for those in the community, which will be a concern for when the IMD exclusion is removed. Another limitation for implementation is cost. The federal government will need to allocate more dollars for Medicaid reimbursement, which will take some efficient budgeting, and most likely increased taxation.
Organizations that should be involved in the elimination of this policy include the National Alliance on Mental Illness, the 110th Congress of the United States, state offices of Medicaid and insurance, National Association of Psychiatric Health Systems, and the National Association of State Mental Health Program Directors.
In addition, researching mental health services that are employed after hospitalization would prove useful in identifying patterns of discharged patients, improving strategies of care in organizations, and assisting in stabilization of mental illness (Walkup, Boyer, & Kellermann, 2000).
There is an online petition that favors repealing the IMD exclusion and the author has signed it in addition to 152 others (Repeal of the IMD exclusion, n.d.). The petition is addressed to Senators Gordon Smith, Elizabeth Dole, Hillary Clinton, Mel Martinez, and Bill Nelson. It is the hope of the author that the petition will reach the senators and raise awareness of this issue and readers will be encouraged to sign the petition as well.
Key organizations and individuals who are relevant for this issue:
Mary Jo Hudson
Director
Ohio Department of Insurance
2100 Stella Court
Columbus, OH43215-1067
Telephone: (614)644-3458 Tollfree: (800)686-1578
Fax: (614)752-0740
Email:
Website: http://www.ohioinsurance.gov
Mark J. Covall
Executive Director
National Association of Psychiatric Health Systems
701 13th Street, NW, Suite 950
Washington, DC 20005-3903
Phone: (202)393-6700
Fax: (202)783-6041
E-mail:
Website: www.naphs.org
Mark E. Schutter, Ph.D.
Superintendent
National Association of State Mental Health Program Directors, Midwestern Association for State Mental Health Organizations Larned State Hospital, RR 3, Box 89 Larned, Kansas 67550
Phone: (620)285-4360
Fax: (620)285-4357
E-mail: Website: http://www.nasmhpd.org/state_hospitals.cfm
Jim Mauro
Executive Director
Ohio NAMI – National Alliance of Mental Illness
747 East Broad Street
Columbus, OH43205
Telephone: (614)224-2700 Alternate Phone: (800)686-2646
Fax: (614)224-5400
Email:
Website: www.namiohio.org
Judith Lazor
Information Referral Coordinator
NAMI Greater Cleveland Department
1400 West 25th Street, 4th Floor
Cleveland, OH 44113
Telephone: (216)875-7776
Fax Unavailable
Email:
Website:http://www.nami.org/MSTemplate.cfm?Section=Homepage62&Site=NAMI_Greater_Cleveland&Template=/ContentManagement/HTMLDisplay.cfm&ContentID=53598
Tomma Flint
Ohio Department of Health, Office of Policy and Leadership
246 North High Street, 7th floor
Columbus, OH 43215
Telephone: (614) 728-9173
Fax: (614) 644-8526
Email:
Website: http://www.odh.state.oh.us
Terry Allan, MPH, RS
Head Coordinator
Cuyahoga County Health District (1800)
5550 Venture Drive
Parma, OH 44130
Telephone: (216) 201-2000
Fax: (216) 676-1311
Email:
Website: www.ccbh.net
Sandra Stephenson
Director
Ohio Department of Mental Health
30 E. Broad Street, 8th floor
Columbus, Ohio 43215-3430
Telephone: (614)466-2596 Tollfree: (877)275-6364
Email:
Website: http://www.mh.state.oh.us
Angela Bergefurd
Chief
Office of Medicaid
30 E. Broad Street, 7th floor
Columbus, Ohio 43215-3430
Telephone: (614)387-2799
Email:
Website: http://www.mh.state.oh.us/communications/odmhoffices/offices.medicaid.html
Glossary
Almshouse – a home for poor people; a form of indoor relief prevalent before the 20th century, in which shelters funded by philanthropy were provided for destitute families and individuals. In recent decades, almshouses have largely been replaced by outdoor relief programs in which needy people are provided with money, goods, and services while living in their own homes (quoted from Social Work Dictionary).
Community Mental Health Centers (CMHCs) – a local organization, partly funded and regulated by the federal government, that provides a range of psychiatric and social services to people residing in the area (quoted from Social Work Dictionary).
Deinstitutionalization – the process of releasing patients, inmates, or people who are dependent for their physical and mental care from residential care facilities, presumably with the understanding that they no longer need such care or can receive it through community-based services (quoted from Social Work Dictionary.)
Institutions for Mental Disease (IMD) exclusion: Institutions for Mental Disease (IMDs) are inpatient facilities of more than 16 beds whose patient roster is more than 51% severe brain disorders by primary admitting diagnosis. Federal Medicaid matching payments are prohibited for IMDs with a population between the ages of 22 and 64. IMDs for persons under age 22 or over age 64 are permitted, at state option, to draw federal Medicaid matching funds (quoted from Treatmentadvocacycenter.org).
NAMI – National Alliance on Mental Illness - one of America’s largest grassroots organizations that improve the lives of those with mental illness.
Ohio Senior Health Insurance Information Program (OSHIIP) – covers Medigap policies, long-term care insurance, Medicare health plan choices, Medicare rights and protections, and help with filing an appeal.
Transinstitutionalizing – the practice of placing clients into different institutions from the ones to which they legally belong because of the belief that the legal placement is inappropriate (quoted from Social Work Dictionary).
References
Barker, R.L. (2003). The Social Work Dictionary (5th ed.). Baltimore, MD: NASW Press.