xxAACP Newsletter, Volume 14, Number 3, Summer 2000
Regional Report
HCFA vs. California: The Battle over a Section 1115 Waiver Renewal
Despite all of these interesting stories, the biggest community psychiatry story in California has largely been overlooked by the news media. Earlier this year the Health Care Financing Administration signaled its intention not to renew California's freedom of choice waiver unless each county-based mental health plan was put out to bid.
California is one of a relatively small number of states where mental health services are largely organized on a county level. Therefore, it wasn't surprising that when the California Mental Health Planning Council was asked to come up with a blueprint for a Waiver proposal, this proposal was based on county mental health plans. Due to the desire to avoid disruptions in the system of care for seriously mentally ill individuals that can occur with managed-care implementations, the county-based mental health plans in California have only really been in existence for about two years. These two years have been busy ones as each county has struggled to develop a model for managed mental health care that integrates Medicaid and non-Medicaid patients into one system and that includes private practitioners as well as community based providers.
It was certainly a surprise, then, for those of us who've been busily working to create the systems, when HCFA announced their intention to potentially end them. Was the basis for this decision widespread dissatisfaction with how the plans were operating? Apparently not, because very quickly mental health provider organizations (like the California Psychiatric Association), consumer and family organizations (like the National Association for the Mentally Ill), and others, expressed their opposition to HCFA's proposal.
As far as could be determined, HCFA's opposition to California's waiver was based on the premise that the bidding process was an effective way of selecting high-quality mental health services. HCFA first proposed bidding all county-based mental health services in Pennsylvania. Large-scale opposition from the mental health community foiled that attempt. Ironically, a few months later the Philadelphia Behavioral Health System the largest county-run mental health system in Pennsylvania received national recognition as the winner of an innovations in American government award from the Ford Foundation and from the John F. Kennedy School of Government at Harvard University. The award noted that the Philadelphia system confirms the ability of a large municipal government to run a complex behavioral health system on its own in a way that warrants replication by other cities.
Further highlighting the anachronistic nature of HCFA's proposal, a recent report from the Milbank Foundation identified two trends with regard to managed-care for seriously mentally ill individuals: (1) most states are pulling back from full-scale contracts with private mental health organizations and relying instead on contracts with private organizations that function as the administrative service providers (for instance, King County's relationship in Washington State with United Behavioral Health); (2) many states are turning to a county-based mental health system. Whereas there's some evidence that private organizations have been able to increase access to services and to reduce unnecessary inpatient expenditures, many states have concluded that private management of services for the severely mentally ill has too much potential for undertreatment and too few safeguards to preserve safety net services.
Stay tuned, in the next couple of months we will find out whether HCFA changes its mind about bidding out the mental health contracts.
Peter Forster,
MD
Area VII Representative
211 Gough St., Suite 211
San Francisco, CA 94102
http://www.gatewaypsychiatric.com/
Back
to Summer 2000 Table of Contents