JOINT LEGISLATNE AD HOC COMMITTEE
ON MENTAL HEALTH SERVICES
FINAL RECOMMENDATIONS
Presented to:
Governor Fife Symington
Senator John Greene, President of the Senate
Representative Mark Killian, Speaker of the House
December 22,1993
I Senator Ann Day, Cochair Representative Sue Grace, Cochair
Senator John Huppenthal Representative Bob Edens
I Senator Sandra Kennedy Representative Hershella Horton
December 22, 1993
The Honorable Governor J. Fife Symington, 111
State Capitol, West Wing, 9th Floor
1700 West Washington
Phoenix, AZ 85007- 2848
Dear Governor Symington:
Attached are the Recommendations of the Joint Legislative Ad Hoc Committee on
Mental Health Services, established February 23,1993. This report presents short and long-term
recommendations which we believe constitute a substantial improvement to our overall
delivery system of mental health services in this state for future years.
These recommendations conclude many hours of committee hearings, working goups,
planning sessions, and considerable public input and testimony. It is our sincere belief that
with the implementation of these administrative and legislative recommendations, a more
accessible and accountable mental health delivery system will be devised.
It is our sincere hope that the legislature consider the Ad Hoc Committee's
recommendations and commit to improving this states mental health system.
Sincerely,
C4, ;&, C 7 A A . K L - -
Representative Sue Grace, Cochair
December 22, 1993
Speaker Mark Killian
Arizona House of Representatives
1700 West Washington
Phoenix, AZ 85007
Dear Speaker Killian:
Attached are the Recommendations of the Joint Legislative Ad Hoc Committee on
Mental Health Services, established February 23,1993. This report presents short and long-term
recommendations which we believe constitute a substantial improvement to our overall
delivery system of mental health services in this state for future years.
These recommendations conclude many hours of committee hearings, working groups,
planning sessions, and considerable public input and testimony. It is our sincere belief that
with the implementation of these administrative and legislative recommendations, a more
accessible and accountable mental health delivery system will be devised.
It is our sincere hope that the legislature consider the Ad Hoc Committee's
recommendations and commit to improving this states mental health system.
Sincerely,
Representative Sue Grace, Cochair
Frhona state Pegislature
17iJiJ west @ nebirrgtan
@ haunix, pri~ ann85 DU7
December 22, 1993
President John Greene
Arizona State Senate
1700 West Washington
Phoenix, AZ 85007
Dear President Greene:
Attached are the Recommendations of the Joint Legislative Ad Hoc Committee on
Mental Health Services, established February 23, 1993. This report presents short and long-term
recommendations which we believe constitute a substantial improvement to our overall
delivery system of mental health services in this state for future years.
These recommendations conclude many hours of committee hearings, working groups,
planning sessions, and considerable public input and testimony. It is our sincere belief that
with the implementation of these administrative and legislative recommendations, a more
accessible and accountable mental health delivery system will be devised.
It is our sincere hope that the legislature consider the Ad Hoc Committee's
recommendations and commit to improving this states mental health system.
Representative Sue Grace, Cochair
TABLE OF CONTENTS
Page
Background and Overview ..................................... 1 .3
Structural Recommendations .................................. 4- 8
Licensing Recommendations .................................. 9 - 11
Rules Recommendations ..................................... 12
Professional Standards Recommendations .......................... 13
Provider Contracts Recommendations ............................. 14
Eligibility Recommendations .................................... 1 5
Insurance Recommendations ................................... 1 6
Case Management Recommendations .......................... .17 .20
Outcome Measurements Recommendations ....................... 2 1.22
Funding Recommendations ..................................- 23- 24
LIST OF APPENDICES
Appendix A Funding and Expenditure Graphs
BACKGROUND AND OVERVIEW
The President of the Senate and Speaker of House of Representative appointed a Joint
Legislative Ad Hoc Committee on Mental Health Services established February 23, 1993.
Representative Sue Grace and Senator Ann Day were selected to cochair the Committee.
Other legislators assigned to the Committee were, Representative Bob Edens,
Representative Hershella Horton, Senator John Huppenthal and Senator Sandra Kennedy.
The Committee was charged with reviewing the current mental health delivery system,
including counseling services, and with developing recommendations on how to improve the
entire system. The Committee was further required to make recommendations on how to
implement mental health programs required by Title XIX of the Social Security Act that
are not related to services to the seriously mentally ill in a manner that will cause minimal
disruption of services to clients currently receiving services.
The decision to immediately appoint an Ad Hoc Committee came following a myriad of
complaints to legislators from providers, clients, the regional behavioral health authorities,
and health advocacy groups. The following is a sample of criticism pertaining to the
existing delivery system:
the current mental health delivery system has too many administrative levels;
too much duplication exists at the administrative and provider levels;
the eligibility process is convoluted and complex;
little accountability exists for expenditures of state and federal funds,
behavioral health subvention funds should not be used as a match for federal funds;
providers are not being paid for services rendered in accord with their contracts;
providers are operating without signed contracts;
case management services are repeatedly duplicated;
clients are not receiving services for which they are eligi'ble;
the children's capitation rate is unreasonably low;
no uniformity in contracts;
there is little coordination of continuity of care between the health plans and
RBHAs for the client;
the claims processing mechanism is not reconciling claims in a timely manner.
From February 1993 until December 1993, the Ad Hoc Committee on Mental Health
Services held 14 full Committee meetings. Additionally, the Committee members were
assigned to subcommittees and working groups to discuss the specific topic areas and the
subcommittees were required to deliver their recommendations to the full Committee.
The Committee members initiated the development of their recommendations by identifying
six varying options for mental health delivery systems. These options assisted the members
in identifying the benefits and barriers of the different mental health delivery system
scenarios. The following is a list of the proposed options:
Option 1: Status quo. The behavioral health delivery system should remain unchanged,
with the current RBHA system overseen by DHS.
Option 2: The RBHAs should be eliminated and replaced with DHS regional offices.
Local councils should continue and should provide input and planning. A
sub- option should be to grant DHS discretion to choose to either subcontract
with a RBHA or operate a regional office at each geographical area.
Option 3: Transfer all Title XIX behavioral health services to AHCCCS, retain all
subvention or non- Title XIX, programs at DHS. Sub- options included:
a) retaining the RBHA system, or b) eliminating the RBHAs.
Option 4: Transfer all behavioral health programs to AHCCCS. Sub- options include:
a) continue using the RBHAs, and b) use health plans only.
Option 5: This option identifies whether an individual's need is primarily medical- health
oriented, or behavioral- health oriented. Clients who are primarily medical
would receive both medical and behavioral health treatment through
AHCCCS. Clients who are primarily behavioral health candidates would
receive both medical and behavioral health treatment through DHS. This
option is similar to Long Term Care clients. DHS would likely retain adult
SMIs and SEHC children, while most other clients would go to AHCCCS.
Option 6: Create a separate department composed of Behavioral Health and
Developmental Disabilities.
After many hours of discussion and testimony on the proposed options, the Committee
determined that certain issues needed to be considered in more detail before any final
recommendations concerning the options could be made. Therefore, the Committee
divided into three subgroups with the cochairs of the committee requiring the members to
develop recommendations and present them to the full Committee. Thus the following
subgroups were assigned:
1) Data This subgroup was assigned to determine indicators to measure performance
outcomes, examine costs of case management, develop a uniform data system and
other barriers performance.
2) Elieibilitv and Services This subgroup was required to examine streamlining the
eligibility process, examine outreach programs, examine mental health insurance
benefits, devise a service package, develop and coordinate crisis services.
3) Statute% This subgroup was assigned to examine the current mental health statutes,
define " medical necessity," establish timelines for phasing in adult mental health
services, and examinine methods for reducing utilization of institutional settings.
As a result of the subgroup's findings and considerable public input, numerous
recommendations were presented to the full Ad Hoc Committee. This report includes
recommendations from the subgroups which were subsequently adopted by the full
Committee. The report focuses on nine specific system areas and includes short and long-term
administrative and legislative recommendations. The areas of recommended system
modifications include: overall structural changes, licensing, rules and regulations,
professional standards, provider contracts, eligibility, insurance, case management, outcome
measurements and funding.
STRUCTURAL RECOMMENDATIONS
Recommendation # 1,
All Behavioral Health Services shall be moved to the AHCCCS program over a two- year
period, F'Y 1995 and FY 1996, and completely integrated by F'Y 1997. The new system
would have a unified eligibility criteria, and would provide each client a predefined package
of both medical and behavioral health services. Services would be provided by brokers of
health care who receive a single capitation rate for both medical and behavioral health
services.
The time frames for each stage of a system change would be as follows:
Non- Structural Committee Recommended Changes
Title XIX General Mental Health to AHCCCS
Behavioral Health Division to AHCCCS
Single Licensing Agency
Single Cap Ratemew Health Brokers Selected
Licensing Review Committee Operational
Problems Corrected in New System
Resolution of ASH'S Future Role
Oct. 1, 1994
Oct. 1, 1994
Jan. 1, 1995
July 1, 1995
July 1, 1995
July 1, 1995
July 1, 1996
July 1, 1996
Analvsig
The current behavioral health system is severely fragmented with too many layers of
administration, which spend too much capital on overhead costs and do not place clear
authority and responsibility with one agency. A change in structure is only effective in
solving problems that are caused in part or in whole by the existing structure. This is
certainly the case with the problems mentioned above.
The existing system consists of three types of clients:
Title XIX clients receiving medical s e ~ c efsro m AHCCCS, and behavioral health
services from DHS, with little coordination.
State- only MN/ MI clients receiving only medical services from AHCCCS.
State- only Subvention clients receiving only behavioral health services from DHS.
It is not good public policy to create three different groups of clients who receive different
services based on categorized eligiiility groups. Nor does it seem appropriate to classify
people by their diagnosis, segregating those who are " mentally ill" from others in need of
medical treatment. This type of segregation imposes the stigma associated with mental
illness and does not recognize the close and sometimes blurred relationship between
medical and behavioral health needs. The recommendation would create 2 groups: Title
XIX and State- only non- Title XIX. All clients would receive the same package of services
from the same health plans, with the only difference being that the Title XIX clients would
be partially financed by federal funds. The eligibility level for the state- only program shall
be set at a level which reflects the current funding level and any increases approved by the
Legislature. Savings accrued as a result of implementing these recommendations shall be
reinvested to provide increased services to clients.
The recommended system will also eliminate an entire layer of administration by removing
DHS. State employees currently required to coordinate between agencies could be utilized
in other areas. The Regional Behavioral Health Authorities ( RBHAs) and the current
AHCCCS health plans would have to provide both medical and behavioral health services
in order to bid as a broker of services. They could provide those services themselves,
merge with each other, subcontract, or any other option they decide upon. The most
efficient and effective would survive.
Additional duplication would also be eliminated under this program. The Division of
Behavioral Health has continually had difficulty in producing accurate data on clients and
expenditures and has spent large amounts trying to improve first the Behavioral Health
Management Information System ( BHMIS), and now the Client Information System ( CIS).
In addition, the Department contracts with a third- party claims payor at a cost to the state
of nearly $ 1.8 million in N 1993. AHCCCS has a computer system with the capacity and
ability to replace all these systems, resulting in the immediate annual savings of the $ 1.8
million paid to the contractor for claims payment. Use of the AHCCCS computer system
would also improve the availability and reliability of data.
The commitment to providing services to state- only, non- Title XIX clients would continue.
However, these clients would then receive both medical and behavioral health services.
Some people currently receiving services would no longer be eligible, while others who
currently do not receive services would become eligible. In total, more state- only clients
would be served for the same level of funding because of reduced overhead costs and the
reinvestment of savings.
An incentive currently exists to treat many low- need clients, and to turn away the very
needy clients. The incentive is also against providing prevention services. These incentives
were created by an earlier decision to capitate only those clients actually receiving
behavioral health services, rather than an " enrolled" population. If a RBHA spends money
on prevention, it is expending resources that would reduce its future number of clients and,
therefore, its revenue. If you are paid a certain amount for each client, the way to survive
is to accept and keep clients that cost less than the capitation rate, and deny services to
those costing more. The solution is to capitate for a larger population as m C C a
currently does. In this way, the broker of services is responsible for all costs of their
enrollees, which encourages prevention and focuses resources on the neediest clients.
Recommendation # 2.
The Behavioral Health Oversight Committee shall review statutes, rules and policies for
conflict and continuity on an ongoing basis. The Committee shall also further define,
establish and/ or clarify statutory definitions for surrogate parents, signature parents, legal
custodian, and treatment guardian. Additionally, the Committee shall outline the extent of
their authority to provide varying degrees of guardianship to eliminate the " all or nothing"
proposition.
The Oversight Committee shall also review the role of regional residential psychiatric
facilities, also known commonly as " Puffs" and " Reffs." In addition, the continuing role of
the Arizona State Hospital needs to be determined, to include number of patients, types
of treatment, which populations shall be served, and whether some patients are better
served in community 24 hour treatment centers.
Analvsiq
Although the Joint Ad Hoc Committee on Behavioral Health Services has spent much time
and effort in reviewing the behavioral health system, it is clear that because of the
complexity of the system, ongoing reviews are necessary. Since a Behavioral Health
Oversight Committee already exists, it seems to be the most likely choice of a platform to
study statutes, rules and regulations to correct conflicts and quality.
On a periodic basis, the Committee could choose a particular section of rules to review.
The Committee's recommendation does not envision a comprehensive annual review, but
rather a plan to deal with the issues in digestible portions.
The guardianship- related statutes shall be revised to ease the ability of providers to treat
clients who are in need. For instance, treatment is sometimes denied to children under the
custody of state agencies because there is not a parent's signature, even though the child
has a diagnosed mental illness. Some parents are unavailable or do not care. The agency
is left unable to perform their custodial functions unless they want to become full guardians.
An intermediary step could be established to give them the ability to be a signator for
medical treatment only.
Additionally, the original purpose of Puffs and Reffs was to provide some residential crisis
care in rural areas to avoid costly hospitalization and transfer to metropolitan areas for
transitory conditions that could be served more effectively in the local community.
However, in practice it appears that while some are performing this function, much of the
funding might currently be used for treatment in metropolitan areas. The location and use
of these facilities shall match the purpose for their existence.
The Arizona State Hospital ( ASH) has varied in size and purpose over the years. In the
early 19603, ASH had over 1,800 patients; today, ASH averages about 450 patient.. This
change is a result of deinstitutionalization and more reliance on a community network of
providers. However, at no point has there been a distinct discussion on the role of ASH
and the adoption of a clear public policy. How many patients shall we treat at ASH?
What types of patients shall be treated at ASH? ( Forensic patients, children, adolescents,
geriatric, all of these categories?) What shall be done with the facilities at ASH? How
does ASH fit in with capitation? Why do some counties use ASH extensively and others
do not? How shall ASH be funded? All of these are areas for which there is no clear
public policy. The Legislature shall review these areas and establish a policy by July 1,
1996.
A plan shall be developed to convert the Southern Arizona Mental Health Center
( SAMHC) from a state agency to a private nonprofit agency by July, 1994.
Analvsis
SAMHC is a state- owned service provider that competes with private sector agencies. This
has created inequities in funding and has reduced both flexiiility and the options available
to the Pima County RBHk By monopolizing certain resources, this has also interfered
with the ability of private sector service providers to tailor their services to local client
needs. This problem would worsen considerably if behavioral health services were
transferred to AHCCCS.
The solution is to develop a plan to convert SAMHC into a private nonprofit provider.
The plan shall include discussion of various options for the state- owned facility, to include
the lease or sale of the property. The plan shall also address staff transition issues and
continuity of care to clients. Under no circumstances shall the resources currently devoted
to the operation of SAMHC be removed from their current geographical location.
This recommendation will allow these resources to be redistributed in the local area to
providers that have tailored their services to those that are in demand. This shall also
result in increased services to clients, at a reduced cost. After conversion, SAMHC will be
in a position to compete more favorable and effectively within the provider network.
Recommendation # 4%
Implement the Title XIX general adult mental health and substance abuse program on
October 1, 1994, as currently planned.
Analvsiq
The state shall implement the general mental health and substance abuse Title XIX
program on October 1, 1994, when the waiver expires. The location of this program shall
be in the same agency that contains all other behavioral health programs, as discussed in
Recommendation # 5 below.
Recommendation # 5.
The state shall strengthen and expand prevention services and funding. By July 1, 1994,
the director of the Department of Health Services and the director of the Arizona Health
Care Cost Containment System shall submit a plan to the Legislature detailing how this
policy can be implemented.
Analvsis
Prevention services in this state have been woefully underfunded and virtually ignored. The
cost savings as well as the avoidance of personal hardship that are inherent in effective
prevention programs are just too important to continue to be overlooked and underfunded.
Although the statutes require 20% of funding requests to be for prevention services, this
has been interpreted very narrowly to apply to only one budget line item, and even then
to be optional. The effect has been that although overall behavioral health spending has
been increasing, prevention expenditures have actually declined over the last few years.
With an increase in funding comes an increase in responsibility. Prevention programs must
be prepared to show positive measurable results. For this reason, the director of the
Department of Health Services shall develop a list of prevention programs with proven
results. This list shall then be molded into a plan for advancing prevention services and
then be submitted to the Legislature for consideration during the 1995 legislative session.
LICENSING RECOMMENDATIONS
Recommendation # 1,
All licensing shall be consolidated and placed in the Department of Health Services ( DHS).
Analysis
Currently, multiple agencies are involved in licensing providers for the same services. This
is not only unnecessary, but often results in contradictory and excessive rules and
regulations. The net effect is additional administrative cost and fewer dollars left to devote
to services to clients.
An additional problem is the unfair environment created when a provider is licensed by the
same agency that it contracts with for providing services. The provider shall be able to be
licensed to operate exclusive of any contractual agreements. An agency with a service
contract shall only be able to provide oversight of that contract; they shall not be able to
threaten a provider's license for a contract dispute.
Having only one agency license providers will make the process more fair, will significantly
reduce provider costs, will eliminate contradictory rules, and will save the state through the
elimination of duplicative licensing staff.
Recommendation # 2.
The practice of requiring the state to issue permits for behavioral health programs shall be
abolished. The state shall only license providers and provide contract compliance oversight.
All permitting shall be done exclusively by local authorities.
Analvsis
County and city governments already provide for the zoning of land use and the permission
for new provider locations. The duplication of this function by the state is unnecessary,
wasteful of resources, and does nothing but place an additional obstacle to the maintenance
of a healthy provider network. Any standards that a provider must comply with for the
state are more appropriately handled through the licensing process. This unnecessary
bamer to provider development shall be eliminated.
Recommendation # 3,
Providers shall be required to meet one consolidated state licensing standard and have only
one agency monitoring compliance with these standards. The license shall apply to all
locations of that provider. For instance, if an existing provider opens a satellite facility, it
shall not be required to apply for a new license, rather, it shall be able to operate under
its existing license. The Committee recognizes that the Department of Health Services has
the authority to accomplish this task administratively and therefore, recommends that the
Department begin to consolidate state licensing standards.
Analvsis
There shall be a standard, written set of rules that all providers of particular services must
meet. Once these requirements are fulfilled, the provider shall be allowed to contract with
any state agency without the imposition of supplemental requirements. The providers shall
be able to make normal expansions and contractions of their operations without having to
seek a new license.
Under the present system, a residential provider that wishes to purchase and operate an
additional satellite facility must pursue a license for that location as if it were a new stand-alone
provider. This is not only wasteful, but adds a great deal to provider costs. The
policy ignores the fact that many required functions can be performed centrally by the staff
of the headquarters location. For instance, what is the real difference between three
facilities with 10 beds at three different locations, compared to one 30- bed facility. There
is no reason that the state shall force the provider in the first case to have three medical
directors, three administrative staffs, three licenses, three sets of books, etc.
To remedy this situation, a provider shall have the discretion under their current license to
open satellite facilities, providing that the new location does not violate any other current
licensing standards. The provider shall also continue to have the option of separately
licensing one or more of their facilities.
Recommendation # 4.
The state shall use " deemed status" to reduce the need for multiple licensing of providers.
This policy shall be placed in statute to insure its continued usage. The Committee
recognizes that the Department of Health Services has the authority to accomplish this task
administratively and therefore, recommends that the Department begin to reduce multiple
licenses.
Analvsis
The term " deemed status" means that the state selects one or more outside licensing
agencies that it " deems" equal to or exceeding state licensing standards. The state then
accepts the license of these agencies in lieu of its own licensing process.
For instance, the Joint Commission on the Accreditation of Healthcare Organizations
( JCAHO) licenses Title XIX residential facilities. If JCAHO is selected for " deemed
status," then those providers that are accredited by JCAHO would not require a separate
state license accreditation. In this way, if the state can accept the standards of other
accrediting and licensing organizations, both the state and the providers can save time and
money by reducing duplicate licensing.
Recommendation # 5,
Licenses shall be provided for a three- year period, instead of only one year. During the
non- renewal years, the Department shall randomly check compliance as necessary. The
Department of Health Services has the administrative authority to accomplish this
recommendation therefore, the Committee recommends the Department begin amending
its licensing periods.
Analvsis
Annual licensing is both costly and unnecessary. The Joint Commission on Accreditation
of Healthcare Organizations ( JCAHO) which licenses Title XIX facilities, uses a triennial
licensing cycle. During the non- licensing years, JCAHO performs a much less costly walk-through
review for compliance. This system of licensure is more often used for health care
facilities.
The state shall also adopt this timeline for licensing. Not only will it reduce state and
provider costs, it will also not adversely effect the quality of operations or services.
RULES REC0MMEM) ATIONS
- 1.
A committee shall be established to review rules and regulations for certification and
licensing to eliminate duplicative efforts on the part of state agencies. The committee shall
also pursue the use of " deemed status" as a method to streamline the regulatory process.
The committee shall be composed of six members, one from the Department of Health
Services ( DHS), one from the Arizona Health Care Cost Containment System ( AHCCCS),
one from the Department of Economic Security ( DES), and three members from service-provider
representatives. AU members shall have experience and expertise in licensing
issues.
Analvsis
While reviewing the current system for delivery of behavioral health services, it has become
clear that there are many areas of duplication and contradiction between various agencies.
The Joint Ad Hoc Committee on Behavioral Health has not had the time nor the resources
to thoroughly review these complex areas and make specific recommendations. It is also
doubtful whether such a review would have been in the best venue to have maximum
benefit. By forming a committee of agency personnel and service providers, rules will be
reviewed by the stakeholders of the system who know the problems best, have the authority
to correct problems, and will benefit the most by their correction.
The committee will only be successful if there is a true commitment from the participants
to improve and simplifL the system. One such improvement appears to be the usage of
" deemed status," and this shall be the first area reviewed by the committee.
PROFESSIONAL STANDARDS RECOMMENDATIONS
Recommendation # 1,
The qualifications required to perform an evaluation shall be changed from two licensed
physicianslpsychiatrists only, to two licensed physicianslpsychiatrists if possible or one
licensed physician/ psychiatrist and one licensed psychologist.
Analvsis
In rural areas and other medically underserved regions of Arizona, it is often very difficult
and occasionally prohibitive to require two licensed physicianslpsychiatrists to perform
evaluations, Attracting high- level medical personnel to these areas is a constant struggle.
Some areas have part- time care professionals who only visit outlying areas occasionally. To
require the presence of two of these professionals at the same time for an evaluation is
unnecessarily strict and does not add to the quality of the evaluation.
The reasonable solution is to continue to strive for two physicians/ psychiatrists where
possible, but where it is not practical to allow a psychologist to substitute for one of them.
The requirements for psychologists are stringent enough that this will not significantly
reduce the quality of the evaluation. This policy will result in quicker evaluation completion
and lower costs.
PROVIDER CONTRACTS RECOMMENDATIONS
Uniform provider service contracts and uniform definitions shall be established. Each
provider shall be able to sign a single contract with the state to provide a specific array of
clearly defined services. After that contract is signed, every state agency would be able, but
not required, to contract with that provider for those services. Prices would continue to be
negotiated individually. No agency could use a provider that did not have a contract with
the state to provide those specific services. All state services would be clearly defined,
along with the requirements that must be met by each provider. The provider would then
select those services that it wished to provide and met the requirements for, and sign a
state contract.
Analvsis
Each agency defines services differently and requires different and sometimes contradictory
requirements. For example, one agency might require a master's level therapist to perform
two hours per week of counseling for a specific diagnosis, another may require a PhD level
therapist and one hour per week, and still another might require group therapy. As a
result, a provider may have three clients, all from different agencies, all receiving different
services. To make matters worse, the agency has to hire additional staff to handle each
requirement, and each agency has a separate contract, separate audits, and separate case
managers.
Under the recommendation, a provider would only have to meet one standard for all state
agencies, have one contract, one auditor, and one case manager. Currently, some providers
have to have separate contracts with each state agency, with each RBHA or Healthplan,
and with each private insurance company. The result is a confusing mess that adds a
tremendous administrative burden and reduces the quality of care. The federal government
sharply criticized the state for not having contracts signed by each provider. It is not
surprising considering the myriad of different requirements. The recommendation of a
single uniform state contract would solve this problem.
ELIGIBILITY RECOMMENDATIONS
Recommendation # 1,
All Title XIX eligibility determination shall be centralized. The single determiner of
eligibility shall be the Department of Economic Security ( DES).
Analysis
The recommendation would greatly simplify the process of entering the system, both for
clients as well as for the state agencies. We waste too many resources on confusing, lengthy
forms and massive duplication of efforts. In addition, the error rate and the costs both
from improperly treating ineligible clients that are misidentified as well as federal penalties
shall be reduced with a single eligibility determiner.
Recommendation # 2,
Once it is made available, the Committee shall review the financial data relating to the
proposal to establish Title XIX eligibility on a percentage- of- poverty- level basis. If the
Committee decides to adopt such a recommendation in part or in whole, a co- payment
schedule shall be included.
Analysis
Recent discussions concerning the effects to the state of seeking a federal waiver to base
Title XIX eligibility on a percentage of the federal poverty level have brought up many
possible benefits, as well as a few potential problems. The issue definitely deserves more
discussion and analysis. Unfortunately, at this point the impact on current state- only
populations and on state matching fund requirements is not clear. It is also uncertain what
the federal reaction would be to such a proposal, and what the actual details of such a
waiver would include. For these reasons, the Committee shall review this proposal at
length, and not make a premature recommendation in this area.
INSURANCE RECOMMENDATIONS
Recommendation # 1.
Establishment of a reinsurance program shall be considered for geographical areas where
the number of program enrollees is insufficient to adequately distribute risk under a
capitated system.
Analvsis
A very small population can place excessive risk on a health broker for high- cost individual
cases. This may result in financial instability of the broker, a lack of bidders to be the
broker, or in the medically inappropriate early termination of services to high- cost clients.
A reinsurance program would have the state share in a portion of costs that exceeded a
certain pre- established level. This maintains the financial incentive of the broker to reduce
costs, while reducing excessive risk from capitating a small population.
CASE MANAGEMENT RECOMMENDATIONS
Recommendation # 1.
Standardized qualifications shall be established for case managers and case coordinators.
Case managers shall be licensed by the Arizona Board of Behavioral Health Examiners to
insure compliance with these standards. The minimum requirements for licensure shall be
a bachelor's degree in a related field and five years of behavioral health experience, or a
master's degree in a related field and three years experience.
Case coordinators will not be required to be licensed by the board but are required to be
a mental health professional or mental health technician, or a person with a high school
diploma or GED and a combination of behavioral health education and experience totaling
three years, and must be supervised by a qualified mental health professional or clinical
supervisor.
The roles of the Case Management and the alternative of Case Coordination shall also be
clearly defined. Case Managers shall be responsible for managing a patient's mental health
services consisting of a set of services and activities which are identified, planned, obtained,
coordinated, monitored, and continuously evaluated. The process of case management is
based on the results of the assessment, the evaluation and treatment planning, and is
structured around the unique needs of the patient. Development of the individual service
plan, monitoring and evaluation of the continued need for service is the primary
responsibility of the case manager.
The case coordinator is responsible for the basic individual service plan coordination,
identification of service providers, authorizing services based on the individual service plan
and follow up. Case coordinators are prohibited from developing individual service plans.
& I&&$
Case managers play a very important role in patient care and are the principal
administrator of a patient's overall treatment and service plan. Additionally, the case
manager handles the contact between the patient, family, and service providers. For these
reasons, patienl shall be provided some guarantee that case managers are competent and
qualified professionals. Therefore, minimum standards of qualifications for all case
managers must be established.
This recommendation shall also be adopted to support recommendation # 3, which would
eliminate the assignment of multiple case managers for a single patient. Currently, some
agencies argue that they must assign a case manager because another agency's existing case
manager is not qualified to make behavioral health decisions. If all agencies are required
to maintain the same standards, this will no longer be a problem.
Recommendation # L
Case management shall only be used when appropriate. When a case manager is not
required, the health broker shall use case coordinators to approve treatment in accordance
with the patient's treatment plan, and the service provider shall be held accountable for
patient treatment.
Patients who are receiving services from more than one provider or patients receiving
treatment for more than 30 days may require a case manager. Patients who have only one
provider or patients who receive less than 30 days of treatment shall not be assigned a case
manager, but shall instead use a case coordinator. For instance, a person who requires two
weeks of treatment at one provider, would be assigned to a case coordinator who would
then select an appropriate provider. The provider would then be responsible for the
treatment of that individual.
Patients receiving substance abuse counseling shall not use a case manager. Substance
abuse clients are best served when the provider of services is allowed to perform the
tunctions currently performed by an external case manager.
This recommendation is directed to all state agencies responsible for contracting for case
management and case coordinator services. Such agencies shall strive to implement the
Committee's recommendations pertaining to the appropriateness of case management
utilization.
Analvsis
Given the diversity of levels of need of services for behavioral health patients, case
management services are often times necessary. However, some patients need very little
or no case management at all; rather, their services could be monitored easily by a case
coordinator. Therefore, case management services shall be utilized to assist patients with
numerous providers and case coordinators shall be utilized to monitor patients with one
provider. On average, case coordinators are able to handle case loads of nearly 10 times
the amount of case managers. This will not only result in significant savings, but also
focuses resources on those clients who will benefit the most.
The system has also deprived some providers of the ability to practice medicine. Currently,
a RBHA determines a client's treatment plan, picks out a provider, and then has a case
manager, contract managers, and quality assurance personnel constantly overseeing and
ordering the method of treatment. The provider is then unable to treat the client in the
way they feel is most appropriate. Each provider is required to meet stringent licensing
requirements and is staffed with professional medical personnel. This intrusion into specific
treatment decisions by personnel who may have little or no behavioral health education or
experience is clearly inappropriate and often treatment averse. The provider shall be
allowed to treat the individual, and then be held accountable for the success or failure of
their efforts, without constant case- by- case intrusion.
Case management shall not be determined by diagnosis. For instance, a Seriously Mentally
I11 ( SMI) client who is committed to the Arizona State Hospital ( ASH) shall not have a
case manager. The staff of ASH shall be held responsible to provide those services to the
patient. There has been some evidence that payments have been made for case
management for clients in similar situations in which little or no actual work was required
on the part of the case manager.
Recommendation # 3.
One agency shall be established as the lead agency responsible for establishing a patient's
service plan when more than one agency is in involved. For patients who are involved with
more than one agency, the agency that has custodial responsibility for the patient shall be
the lead agency. In the absence of custodial responsibility, the first agency to treat the
client shall remain the lead agency.
The lead agency is responsible for establishing the patient's service plan and shall be
accountable for case managing that patient. AU other agencies involved with the treatment
of the patient must comply with the service plan established by the lead agency. The lead
agency shall be responsible for all costs of implementing the treatment plan that are not
subsequently covered by other agencies.
For example, a child under the jurisdiction of the Department of Youth Treatment and
Rehabilitation ( DYTR) would have DYTR as his lead agency. DYTR would then develop
an individualized treatment plan ( TIT) with personnel that meet the standard licensing
criteria. If the child was eligible for Title XIX or other programs, DYTR could refer the
child to those programs. Those programs could not change the ITP or assign an additional
case manager. They would pay for those portions of the ITP that they covered, and the
lead agency would pay for all uncovered services.
Analvsis
When more than one agency is involved in delivering care, in order to ensure continuity of
care and coordination of services without service duplication a lead agency must be
established. The current system results in chaos. Clients have a different case manager for
each agency, ITP's are developed by each agency which are many times contradictory, and
custodial agencies are not allowed to fulfill their fiduciary responsibility to their clients. The
duplication of services and interagency arguments cost the state significant sums of money
while simultaneously reducing the quality of services. Clients are left in the middle, trying
to sort out how to receive treatment.
If each agency must employ case managers that meet minimum licensing standards, then
another agency shall not be allowed to second guess the first agency. In the same spirit,
the lead agency shall be ultimately responsible for paying for the uncovered portions of the
ITP, since they were the ones that developed it. This change will result in substantial
savings by reducing duplication and eliminating some interagency squabbling. The client
will also benefit by dealing with only one case manager and one ITP.
Recommendation # 4.
The performance of Case Managers shall be evaluated. Since the use of case managers is
both costly and critical to the effectiveness of treatment for some clients, evaluation criteria
shall be established to measure the effectiveness of each case manager.
This recommendation is directed to all state agencies responsible for contracting for case
management services. Such agencies shall strive to implement the Committee's
recommendations pertaining to the over utilization and duplication of case management
services.
Analvsis
Case managers shall be evaluated based on the same factors that require their use. For
instance, case managers are needed to guide clients between various providers, arrange
transportation, and insure that the client does not fall through the cracks. Therefore, the
case manager shall be evaluated on factors such as the following:
Percentage of appointments missed by the client.
Length of time between initial call by client until services are received.
Percentage of clients who complete intake but never receive treatment.
Improvement in client's illness.
Improvement in client's ability to work, go to school, remain in the community.
Percentage of clients enrolled in SSI, Title XIX, etc.
OUTCOME MEASUREMENTS RECOMMENDATIONS
Recommendation # 1,
Every dollar spent in the system shall have a purpose and a goal. The broker of behavioral
health services shall be required as part of the contract requirement to develop treatment
goals and to measure outcomes. These outcomes shall be measured over at least one year,
in addition to other shorter- outcome measurements.
The broker of services shall be required to report these results to the state agency
responsible for the program. After the first year, the state agency shall review these
submissions from various brokers of services, and select the best methodologies for tracking
results. These methods shall then be established as standards for all of the brokers of
services.
For example, funds expended for prevention shall be directed toward the prevention of a
specific illness. The prevalence of this illness occurring in the treated population shall then
be compared to a control group of non- treated people to determine the effectiveness of the
program.
Analvsis
Currently, we have little, if any, indication as to the effectiveness of behavioral health
expenditures. Citizens of Arizona are entitled to know what benefit they are receiving for
their tax dollars. Simply spending money efficiently for behavioral health does not ensure
any improvement in the quality of life for citizens. It is imperative to know which programs
work, and which do not. This can only be accomplished through establishment of goals,
and measurement of outcomes. Those programs that work can be expanded, and those
that do not can be ended. This will maximize the benefit for each dollar expended.
Recommendation # 2,
A system shall be instituted which will provide interlocking incentives throughout the system
to improve the delivery of services. One component of this effort shall be the
establishment of monthly client satisfaction surveys which would be tied to financial rewards.
To insure impartiality, the surveys shall be conducted by an independent polling company
or by the Auditor General. Another component shall be the establishment of monthly
public reports that detail the number of clients and payments made to each provider.
When implemented properly, these incentives will help to drive the entire system to focus
on excellence.
The existing system does not provide incentives to provide high quality care, nor does it
provide information to the public on which providers are doing well. By providing these
incentives, significant strides can be made in improving the system.
The independent survey company would survey each month a random 10% of the clients
of each provider. The clients would rank the provider they received services from on a
scale of 1 to 10. The surveyor would then calculate an average client satisfaction score for
each provider. Each RBHA, or broker of services, would then receive a score based upon
the weighted score of the providers that they use. The state agency responsible for
behavioral health would receive a score based on the weighted scores of the brokers of
services.
These scores would then be published monthly. Areas of the state or individual providers
with very high scores would be readily identified, as would areas or providers with low
scores. This information would make it easier to find areas to focus on improvement, and
areas to copy successes. A RBHA will focus more resources with providers with high
scores, which will in turn encourage providers with low scores to improve. Most
importantly, the prime benefactor will be the clients. This is because their satisfaction
becomes the driving force in the system.
In addition to the independent client survey, a monthly survey of provider satisfaction with
the brokers and the state agency shall be conducted, as well as a survey of the satisfaction
of the brokers with the state agency. In this way, all levels will be able to reflect their
satisfaction or dissatisfaction with other levels.
Based on information provided by the brokers, a monthly report shall also be published by
the state agency, listing the number of clients and payments made to each provider.
Providers that are not getting referrals can compare themselves to those that are in order
to improve their methods of operation. These reports shall be made after the contracts
have been negotiated so as not to interfere with the sealed bid process.
An additional option would be to provide small incentive payments to providers who
receive high- satisfaction scores. This would heighten the incentive to improve these scores.
FUNDING RECOMMENDATIONS
Recommendation # 1,
Title XIX and non- Title XIX programs, for both children and adults, shall be budgeted as
separate line items and footnoted to restrict non- Title XIX funds from being expended for
Title XIX programs.
Analvsis
Without separate line items of funding, any shortage in Title XIX funding can be easily
covered by using non- Title XIX funds. Due to the frequency of Title XIX cost overruns,
this could result in the system becoming a Title XIX- only system. Since the Legislature has
consistently supported continued non- Title XIX subvention funding, a separate line item
shall be budgeted to insure that a certain amount of the total system funding is dedicated
solely to state- only clients.
Recommendation # 2*
Capitation rates shall be based on a total population, not just on those currently in
treatment. In addition, where warranted due to special circumstances, special consideration
shall be given to add- on capitation rates. Examples of this are areas where transportation
is required from remote locations, there is a lack of economies of scale due to low- client
counts, and areas where it is difficult to attract personnel without additional compensation
stipends.
Analysis
An incentive exists to treat only low- need clients, and to turn away very needy clients.
There is also no incentive to provide prevention services. These poor incentives were
created by an earlier decision to capitate only those clients actually receiving behavioral
health services, instead of an " enrolledt' population.
If a RBHA spends money on prevention, it is expending resources that only reduce its
future number of clients and, therefore, its revenue. If you are paid a certain amount for
each client, the way to survive is to accept and keep clients that cost less than the
capitation rate, and deny services to those that cost more.
The solution is to capitate for a larger population, as AHCCCS currently does. In this way,
the broker of services is responsible for all costs of their enrollees, which encourages
prevention and focuses resources on the neediest clients, because this is the most effective
way for the health care brokers to reduce their greatest exposure to costs.
There will continue to be difficulties in providing adequate care to rural areas, sparsely
populated areas, and other medically underserved areas until special cost factors are
recognized and funded. To give the same per- person capitation rate to pay for services in
a high- volume hospital in Phoenix as to transport a client from Page to Flagstaff for
treatment with overnight stays, is unworkable. Blind capitation without reasonable
adjustments for such factors will continually underfund rural areas and actually widen the
gap between metropolitan and rural health care services. As a state, we shall provide equal
services to all of our residents.
APPENDIX A
Joint Legislative Budget Committee
Staff Memorandum
I DATE: December 15, 1993
TO: Representative Sue Grace 1 -
FROM: Michael Fiscal Analyst
I SUBJECT: REQUESTED GRAPHS
I As you requested, the 11 attached graphs show the distribution of funding and clients, as
well as a historical perspective on state behavioral health expenditures. Graph 1
demonstrates the increases that have been made in funding, as well as the impact of new
I federal funds due to Title XM implementation. Graphs 2- 4 show the size of behavioral
health within the Department of Health Services ( DHS) budget. Graphs 5- 7 show the
distribution of funding based upon client category. Graphs 8- 11 show the numbers and
I percentages of clients by category and by RBHA.
Some of the numbers used to generate these graphs were estimated, but any variance would
not significantly impact the information that is depicted. If you would like further
information, please let us know at 542- 5491.
I MB: jb
Attachments
xc: Joint Ad Hoc Committee on Behavioral Health Members
8 Joint Ad Hoc Committee on Behavioral Health Staff
Ted Ferris, Director JLBC
( Millions)
- m m m m -
GRAPH 3
Department of Health Services
FY 1994 Non- Appropriated
( Estimates)
GRAPH 6
Substanc
Department of Health Services
FY 1994 Non- Appropriated
( Estimated)
ASH
r ( 2.0%)
\ I
Mental Health
SMI
Child TXlX
( 30.9%)
GRAPH 10
Percentage of Clients by RBHA
( As of October 15, 1993)
All Other
NARBHA ( 9.8%)~
I-'
I-'
