Advocates Praise Unprecedented Removal of Federal Support for Mental Health in New Mexico Managed Care Program

Washington DC, October 20, 2000—The Bazelon Center for Mental Health Law today applauded an unprecedented decision by the federal Health Care Financing Administration to end support for mental health services in New Mexico's managed care Medicaid program. The decision came yesterday when, in response to a letter from Tim Westmoreland, director of HCFA's division for state programs, the state agreed to withdraw its Medicaid mental health services from managed care.

The Bazelon Center asked HCFA last March to deny the state's renewal request, based on serious problems with mental health managed care services, documented by the national legal center in a series of reports. Policy research analyst Rafael Semansky, the reports' author, calls the decision "extraordinary, but absolutely appropriate, given the evident collapse of New Mexico's mental health system after several years of managed care."

To his knowledge, Semansky said, this is the first time the federal agency overseeing the Medicaid program has terminated a managed care waiver. "We hope HCFA's decision will send a signal," he added. "Managed care should be a way to serve people better and more cost-effectively. But a state that wants to use it only to save money on meeting mental health needs should consider what happened in New Mexico."

Semansky praised efforts by many New Mexicans to educate HCFA staff and state legislators about the mounting deficiencies in mental health services under the waiver of Medicaid rules allowing the state to operate public health programs through a managed care program called Salud!. He commended especially "the effective grassroots work of the Human Needs Coordinating Council, a coalition of 600 health and human services clients, advocates, providers and organizations statewide." Many testified during a two-day hearing held last July by state Senator Dede Feldman (D-Albuquerque), who chairs the legislature's Health and Human Services Committee.

The coalition was supported by U.S. Senator Jeff Bingaman (D-NM), at whose request HCFA sent a team to the state to hear complaints from providers, advocates and Medicaid enrollees and who joined in urging the federal agency not to approve mental health in renewal of the state's waiver. U.S. Representative Heather Wilson (R-NM), a former secretary of the state's department for Children, Youth and Families, also made known her opposition to the mental health waiver from the outset.

The Bazelon Center's analyses of the Salud! mental health program found serious inadequacies in the availability of mental health services and their quality, in monitoring data and in grievance and appeals procedures for consumers. Important questions were also raised about excessive administrative costs.

* Few Salud! enrollees received any mental health services at all. Mental health utilization rates of mental health services for the New Mexico Medicaid population ranged from 5% to 10%, significantly below the 20% of the population the U.S. Surgeon General estimates as having a mental illness. (HEDIS Data, 1999)

* Lack of case management, a required Medicaid service that assists the consumers in gaining access to all need services. It is especially critical for children with serious emotional disturbance, who are served by various agencies. Only 486 adults and 207 children received case management over a three-month period in 1999. (Failing to Deliver: An Analysis of New Mexico Medical Assistance Data on Salud! Behavioral Health Care, Bazelon Center, September 2000)

* Lack of intensive services for adults and children with serious mental illness. Fewer than 1% of the children enrolled in Salud! (of a 9% estimated to have serious emotional disturbance) receive the intensive community-based health services they need to live in the community. Fewer than 2.5% of adults (of the 15% of adults who are on Medicaid due to a mental disability) receive intensive community services. (Failing to Deliver, 2000)

* Poor quality of mental health services, with low rates (14% to 26%) of follow-up within 7 days of psychiatric hospitalization and inadequate antidepressant medication management. (HEDIS, 1999)

* Improper denials of care and a flawed grievance process, which denied Medicaid patients' their constitutional due process rights. (Evaluation of MCO Performance, 1999; The Law and Health Issues in New Mexico: An Action Plan for the Attorney General Patricia Madrid, October 20, 1999)

* Lack of key data to monitor the delivery of mental health services, as required by New Mexico's waiver. (Evaluation of MCO Performance; Brooks, Koether, Cope and Allen, HCFA Review Team, Medicaid Program Review of New Mexico's Salud! Program)

* Excessive administrative costs of five management layers have resulted in rate cuts of between 30% and 75% to mental health providers and facilities, with the largest cuts in community-based services. (Mercer Audit, 2000; New Mexico Behavioral Health Service Analysis, Consortium, 2000)

For more information: Lee Carty, 202-467-5730, ext. 21, leec@bazelon.org or
Rafael Semansky, 202-467-5730, ext. 23, rafaels@bazelon.org