Medicaid expenses hurting ADAMH agencies

The crisis facing Fairfield County's Alcohol, Drug Addiction and Mental Health Board is a direct result of its Medicaid expenditures -- the bottom line being that while those needing care continue to increase along with the increase in costs, the funds aren't.

"Our situation is more severe because of the Medicaid match problem," said Orman Hall, executive director of the board. "If you look at our overall expenditures it has grown tremendously, and we have no ability to control those Medicaid expenditures."

The Medicaid program was created in 1965 and pays for a broad range of acute and long-term mental health care services for a segment of the low-income population.

Mental health is the only major Medicaid benefit where local governments pay the bills.

When giving testimony before Senate Finance Committee in May -- in regards to the budget bill, Michael F. Hogan, director of the Ohio Department of Mental Health made this point.

"The fact that mental health is the only major Medicaid benefit where local government pays the bills is a challenge for us," Hogan said. "When Medicaid costs rise in mental health, and overall Medicaid costs in Ohio indirectly reduce resources available for other programs, mental health care for the working poor gets cut. This has gone on for several years; it will accelerate in this budget."

This is exactly what's happening in Fairfield County, Hall said.

"If you're Medicaid eligible and you show up at an agency that has a contract with ADAMH and we have any available funds in our budget, we have to pay for those services before we pay for anything else," Hall said. "We don't have enough to pay for dramatic increases being billed to our board."

The board has six contracting agencies: New Horizons, Mid-Ohio Psychological Services, The Recovery Center, The Lighthouse, the Fairfield Mental Health Consumer Group / Our Place, and Fairfield Medical Center.

In the last fiscal year -- July 1, 2002 to June 30, 2003 -- Medicaid billing for four of the six agencies was more than $3.6 million. This total was up 23.7 percent from the previous fiscal year.

The Fairfield Mental Health Consumer Group / Our Place and FMC don't bill for Medicaid services and therefore aren't included in the totals.

There are 2,056 Medicaid clients and 1,353 non-Medicaid clients in the county. This population makes up 3 percent of the total county population.

There are two primary reasons why Medicaid costs continue to rise, said Sam Hibbs, spokesman for the Ohio Department of Mental Health.

"There is increased enrollment -- more people become eligible during an economic downturn," Hibbs said. "Like all medical costs, Medicaid costs are rising faster than inflation, in large part due to increased use of prescription drugs and increased costs for those drugs and also because a higher percentage of services is being billed to Medicaid."

One advantage to Medicaid is that the local board pays 41 percent and the other 59 percent is paid by the federal government, Hall said.

"It is kind of a double-edged sword," Hall said. "Some aspects of Medicaid are very good and some are very bad."

The board also is responsible for residents -- including children in foster and adoptive care, who may live in another county.

"If they are a Fairfield County resident and need mental health services and have Medicaid, we are billed and responsible to pay for those services," Hall said.

Medicaid billing for out of county expenses was $532,469 in FY 2003, up from $460,652 in FY 2002.

Since the levy failure in last November's general election, the board has made more than $600,000 in budget reductions which in turn stream down to the contracting agencies, who then make cuts on their end.

Since agencies can't cut Medicaid services, reductions come from non-Medicaid and discretionary programs, which affects those who aren't Medicaid eligible.

"It's conceivable but not likely that if Medicaid billing trends continue -- that if you were suicidal, have a serious mental health or drug problem -- and you don't have a Medicaid card, agencies would have to turn you away because they can't treat you, because there's no money," Hall said. "There's a lot of working poor people in this county who don't have Medicaid and would be turned away. A lot of these people are being undertreated now. Most people eventually get in and receive services, but if patterns continue, it is possible that our agencies won't be able to treat them."

At this point, there is no way to cap Medicaid.

"Capping Medicaid under federal rules would mean implementing managed care which is complex, costly and creates problems of its own," Hibbs said. "More important, capping costs is not desirable, because there is a need for the care being provided."

This makes levy dollars even more of a necessity, Hibbs said.

"I think states subsidize mental health to a point," he said. "Local levy money is very crucial and it's being eaten up to pay for Medicaid match. The system overall has been flat-funded for a decade or so and there's no more money to be squeezed out of the state system. Local boards are really feeling the crunch now."