Ohio is overhauling the way Medicaid pays addiction treatment and mental health care and a state group says the new system could put some cash-strapped organizations out of business.
Ohio Medicaid has historically directly paid behavioral health providers, but starting July 1 the providers will negotiate with private companies like CareSource, which manage Medicaid plans on behalf of the state.
The new system will improve the quality of care while holding down costs, and is already leading to more efficiency, said Greg Moody, director of the Governor’s Office of Health Transformation.
But its been a bumpy transition so far as the state makes billing changes leading up to the July 1 transition, according to The Ohio Council of Behavioral Health Providers.
The changes come at a time when behavioral health providers are playing a critical role in responding to the opioid crisis, which contributed to a total 566 accidental overdoes deaths in Montgomery County last year.
The Ohio Council said its providers that depend on Medicaid are financially fragile and need more time to prepare for the new payment system, with many of the providers struggling with getting paid under the more complicated system with more rules to navigate to get approved for payment.
A new survey of Ohio Council member providers shows 56 percent have less than 60 days cash on hand with 37 percent having less than 30 days. Since the Jan. 1 changes, 59 percent of provider organizations reported dipping into their cash reserves, and about 35 percent of these providers had to draw down from a line of credit to support the changes, the same survey shows.
“While ultimately integration into managed care promises to be beneficial, that’s not true yet,” Lori Criss, CEO of the Ohio Council, said.
Payment delays and claim denials
One of the council’s concerns is that the Medicaid managed care companies will pay slower than when the providers directly dealt with the state, and those delays will harm providers, especially providers with tight budgets.
The state in January switched to new billing codes that the managed care insurers will be using, so instead of billing for all services under 17 codes they are now billing for 120 codes.
The Ohio Council said providers are not getting paid as quickly as they used to, as they struggle to submit claims under the more complex system.
Greg Moody, director of the Governor’s Office of Health Transformation, said the payments in the first quarter of 2018 were down 7 percent compared to the same time in 2017.
Moody said that some of the claims are being denied because the new system is better at catching inappropriate claims that the state shouldn’t be paying.
The states claims data also shows that by March, the number of rejected claims was down compared to January, which Moody said showed that providers were working through initial challenges and learning to bill under the new system.
Tom Otto, association CEO for TCN Behavioral Health Services, which has about 8,000 clients from Greene County and surrounding communities, said changes are bringing behavioral health care in line with other providers.
He said there had been some challenges earlier in the year with the billing changes, like learning to use the new system. He also said there are some limits to the new billing codes, like only getting reimbursed for the first hour of assessments when those typically run longer.
But Otto said overall that he anticipates TCN will perform well under the payment model that managed care insurance companies use based on measurements of the value of care.
“I’m actually excited that we have an opportunity to prove our treatment is effective,” Otto said.
Moody said delays in getting paid reflects the provider learning curve with the new codes, but don’t reflect an inherent problem in the design of the new system.
“What really we need to do is provide technical assistance to help providers get their claims in,” Moody said.
In the old system, Ohio Medicaid also paid the same amount for services no matter who was providing the service. Moody said the billing codes now let the state see who is providing the services and pay more for people with higher skill sets, for example reimbursing doctors more than registered nurses.
“For some of the smaller providers, this is a big change. And we acknowledged that and have tried to support them through this,” Moody said.
Sue McGatha, president of Samaritan Behavioral Health, said it was an investment to prepare staff on how to document services under the changes and they are still learning to trouble shoot glitches in getting paid.
“It took us the better part of the year to actually do all of the set up work and training for all of our staff, working with our IT vendor and our electronic health record to make all the changes necessary to be able to bill for all the new codes,” McGatha said.
Separate from the redesign, the state budget for Medicaid for fiscal year 2018-2019 budget reduced the Medicaid budget below the amount needed to run the program.
Ohio Medicaid is also facing a budget shortfall, so to balance its budget, in April the department delayed payments to providers by one week.
That saved the state $66 million this fiscal year, pushing all payments a week back so that one of the weeks is now pushed into the next fiscal year. But this has meant providers are now a week behind on getting paid.
Ohio Medicaid is still going to be close to hitting its budget and might delay payments again in June, said Moody.
Criss, of the Ohio Council, said this delay in payment makes providers financially vulnerable and less able to handle the changes of the redesign.
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