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Medicaid Rule Change Could Mean New Revenue For Kansas Psychiatric Hospitals

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Heartland Health Monitor

Federal officials have reversed position on a long-standing ban on paying for some inpatient psychiatric care, giving a possible boost to Kansas crisis centers.

The Centers for Medicare and Medicaid Services released a proposed rule Mondaythat will place new requirements on managed care organizations administering Medicaid, such as the three insurance companies that operate KanCare, the state’s privatized $3 billion program.

Most provisions relate to how MCOs spend their revenue, maintain their networks and assure quality. One provision, however, allows psychiatric hospitals such as the state facilities at Osawatomie and Larned to receive Medicaid funds in some circumstances.

The federal government hasn’t paid for people age 22 to 64 who are covered by Medicaid to stay in an “institution for mental disease” in the past, though it has paid for children and seniors. The change will give MCOs — and, by extension, facilities serving their clients — federal payments if a person receives treatment at a psychiatric hospital for less than 15 days in a month, according to the 1,425-page rule

Angela de Rocha, a spokeswoman for the Kansas Department for Aging and Disability Services, said state officials still are combing through the rule to determine exactly how it will affect state hospitals, crisis facilities and other mental health providers. It will be a beneficial change for at least the crisis stabilization facilities, she said.

“All of their patients are short-term stays. This would make a welcome difference to their bottom lines,” she said in an email. “This would not be a windfall, in relative terms, in the context of Kansas’ $400 million-plus annual mental health budget. But it would be helpful to our ability to serve those with behavioral health needs.”

Representatives for Rainbow Services Inc. in Kansas City, Kan., and Comcare in Wichita said they hadn’t heard about the change and would need to determine how it would affect their short-term crisis beds.

Bill Persinger, CEO of Valeo Behavioral Health Care in Topeka, said he thought the change would allow the organization to serve more people through its crisis facility but wasn’t sure about more specific effects.

It isn’t clear how many patients will be covered under the new rule. Adults with disabilities, including serious mental health conditions, are eligible for KanCare, but some may not have known they could sign up before experiencing a crisis.

KDADS and the Kansas Department of Health and Environment will need to decide how to determine eligibility for people in that situation, de Rocha said.

“We would have to work out an efficient eligibility determination process, in collaboration with KDHE, for individuals entering the mental health system who are in crisis,” she said. “Some are already in KanCare, but a great number who we believe would be eligible for KanCare are not yet enrolled.”

Kansas runs state psychiatric hospitals at Osawatomie and Larned. Seven private hospitals in Kansas also have psychiatric units for adults, with more serving seniors and children, according to data from KDADS and the Kansas Hospital Association. It isn’t clear how they will be affected, because not all of their patients stay fewer than 15 days.

CMS said the rule would be implemented in phases, starting July 1, 2017.

Megan Hart is a reporter for KHI News Service in Topeka, a partner in the Heartland Health Monitor team. You can reach her on Twitter @meganhartMC

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