New Jersey Moves to Medicaid Fee-For-Service Payment Model

Gov. Chris Christie in January pledged to improve access to mental health care for those in poverty with an extra $100 million to back it up. But the way the money’s doled out is different. Instead of paying those who treat Medicaid patients a monthly retainer, Medicaid will pay for each patient visit. It’s called fee-for-service and has some mental health care providers warning it will put them out of business. NJTV News Anchor Mary Alice Williams recently asked the New Jersey Association of Mental Health and Addiction Agencies¬†President and CEO Debra Wentz how an increase in funding can result in a decrease in access to services.

Williams: Thanks for being with us Debra. How can an increase in funding result in a decrease in access to services?

Wentz: Well that is exactly what we’re asking ourselves. We know that the state took about $73 million of the $124 million of new dollars and used it to bring up the traditional Medicaid services to the same package and substance abuse that the Medicaid expansion population got. And that accounts for about $73 million and then there were some significant increases in substance use services, which we were very happy about. Such as the the doubling of detox services. Another increase in mental health that was very important was the increase of psychiatric evaluation services. But substance use and mental health and outpatient services is what keep people healthy and well in the community and out of the hospitals are really not working out. There aren’t sufficient rates.

Williams: These are the outpatient services then that we’re talking about that are being paid on a fee-for-service model right?

Wentz: Well everything’s being paid for a fee-for-service model but the rate increases did not hit every single rate and for example while psychiatric evaluation which isn’t in this show, assessment at the beginning of the episode of treatment increased. Our psychiatrist in advanced practice nurses spend about 20 percent of their time on that and the rest of the time they spend doing what’s called medication management. That rate did not increase at all and the current rate will not pay the salaries and benefits, let alone the overhead to deliver that service. As a result, many of our providers are estimating that they will not be able to deliver those services to over 30,000 individuals.

Williams: So, how does this actually affect patients? Is there any evidence that suggests that people will not be able to get access to services because these outpatient clinics will close?

Wentz: Yes, for mental health outpatient services. If people cannot go to the local organizations that have always provided the services because they can no longer afford to deliver them, they will go to all hospital ERs which are a much more costly part of the system to receive services in and then there will be a trickle down effect on the other services.

Williams: The proponents of this bill say that it just brings New Jersey in line with the other states.

Wentz: Well the move to fee-for-service does bring New Jersey where other states are, but they have really moved to a value based system. The fee-for-service is an interim step. Most states are moving to what’s called a value based payment. This is really not the state-of-the-art payment system for the best integrated care.

Williams: Is this just a traditional bump in the road in the long run? After this transition it’s going to work out?

Wentz: No we don’t really think so because if services are lost and organizations close down, it’s always been an underfunded system and there has not been enough capacity for mental health services and some of the substance abuse services too. So, we think that actually certain people won’t get services and that it’ll have to be corrected. It’s going to be a crisis. So, while some of the rate changes are positive and will increase access to certain services, at the same time others tens of thousands will lose services.

Williams: OK, all right thank you for being with us Debra Wentz.

Wentz: Thank you.