NMHA Legislative Alert
August 29, 2005

Administration Calls for Limiting Medicaid Rehab Services and Targeted Case Management
Urgent Grassroots Action Needed to Alert Congress of Profound Danger to Mental Health



Summary:

The Bush Administration recently recommended that Congress significantly narrow the definition of services that can qualify for Medicaid funding through the rehabilitation services and targeted case management optional funding categories. Adoption of these proposals would severely damage community mental health service delivery. Please call on Congress to reject these dangerous proposals.

The Administration's Proposals:

The Department of Health and Human Services has urged Congress --
to make changes to the rehabilitation services option to:
Limit Medicaid reimbursement for rehabilitative services to those that are (1) "necessary for the achievement of specific, measurable outcomes" related to reduction of physical or mental disability or restoration to the best possible functional level; (2) both prescribed, AND provided by, or under the direction of a physician or other licensed practitioner; and (3) billed under a fee schedule; AND,
Prohibit Medicaid funding for rehabilitative services that (1) could be funded through other Federal, State or local programs; (2) are being provided without charge to non-Medicaid-eligible individuals; or (3) are not provided to a specific individual.
to similarly restrict use of the targeted case management (TCM) option in Medicaid by:
Limiting Medicaid reimbursement for targeted case management to services that achieve specific, measurable outcomes for specific individuals; AND
Prohibiting Medicaid funding for case management services that (1) could be provided through any other programs or services; (2) are being provided without charge to non-Medicaid-eligible individuals; or (3) are not provided to a specific individual.


Background:

These recommendations were included among legislative changes very recently proposed by the Administration to create savings in the Medicaid program. As discussed in prior Legislative Alerts, the FY 2006 budget resolution passed by Congress earlier this year directs the Senate Finance and House Energy and Commerce Committees to find $10 billion in savings over five years in programs within their jurisdiction. Although not spelled out in the budget resolution, congressional leaders clearly intend most if not all of this $10 billion cut to come out of the Medicaid program.

The rehabilitation services option (rehab option) in the Medicaid program is widely used by states to fund community-based mental health services. This option enables states to offer a wide range of services in community-based settings as opposed to more medical settings which are required for Medicaid reimbursement through alternative funding categories including the clinic option. The rehabilitation services option currently authorizes Medicaid reimbursement for "other diagnostic, screening, preventive, and rehabilitative services, including any medical or remedial services (provided in a facility, a home, or other setting) recommended by a physician or other licensed practitioner of the healing arts within the scope of their practice under State law, for the maximum reduction of physical or mental disability and restoration of an individual to the best possible functional level."

The TCM option is used by many states to link beneficiaries to mental health and other services. TCM services are defined in current law as "services which will assist individuals eligible under the plan in gaining access to needed medical, social, educational, and other services." Thus, a key feature of this option that distinguishes TCM from other types of case management that may be funded through Medicaid is that TCM services may be used to help Medicaid beneficiaries gain access to non-Medicaid services and supports including food stamps, energy assistance, and emergency housing.

Action:

We ask you to contact your Senators and Representatives and urge them to oppose the Administration's proposals on the rehab option and targeted case management option in Medicaid. Please contact your elected representatives by letter AND by phone. Call the Capitol switchboard, 202-224-3121.

Please use or adapt the sample letter below and FAX it to your Members of Congress; please consider adding information in the letter about the role that rehabilitation services and/or targeted case management play in your state:

Dear [Senator___/Representative____]:

On behalf of the Mental Health Association of ______, and the millions of low-income Americans who need mental health care, I am writing to convey the most profound concerns regarding proposed cuts to the Medicaid program, and particularly regarding a recent Department of Health and Human Services (DHHS) proposal that Congress limit Medicaid funding for rehabilitation and targeted case management services.

The Medicaid program provides a lifeline of support for vulnerable people here in _________ who need mental health care. Medicaid enables these individuals to get critically needed services, ranging from hospital care to clinical treatment, rehabilitation, and prescription drugs. Many of these Medicaid-covered services and benefits enable people to live in their homes and communities instead of in costly institutions. Without Medicaid, these individuals would have nowhere to turn to meet their often profound needs.

Yet DHHS recently sent Congress hurriedly-considered draft legislation that would severely restrict Medicaid funding for services that are critical to people's recovery from mental illness. Although DHHS asks Congress to "clarify" the definitions of two specific services -- rehabilitation services and targeted case management (TCM) - the proposal would actually gut these two core supports for community mental health service delivery.

Rehabilitation services enable states to provide a range of comprehensive community-based services to people with mental illness, while TCM provides a mechanism to help Medicaid beneficiaries gain access to non-Medicaid services including food stamps, energy assistance, and emergency housing. Ironically, rehabilitation services and targeted case management provide exactly the type of coordinated, recovery-focused approach called for by the President's New Freedom Commission on Mental Health only two years ago and endorsed by DHHS just weeks ago, in releasing a federal "action agenda", Transforming Mental Health Care in America. To erect barriers now to the use of these important services, as DHHS has proposed, would be to turn back the clock on the progress made in mental health service delivery and to abandon what have been widely recognized as best practices in mental health that make recovery from mental illness a realizable goal.

If Congress adopts these ill-advised proposals, many people with mental illnesses will lose access to needed services that can save their lives and put them on the road to recovery. Please understand the importance of Medicaid to the care of vulnerable Americans with mental illness, and reject dangerous proposals such as those to limit Medicaid funding for rehabilitation services and targeted case management.


Marge Parrish
Special Projects Coordinator
Mental Health Association
314/773-1399