GAO Issues Report: CMS Guidance Needed to Better Align Demonstration Payment Rates With Costs, Prevent Duplication

WASHINGTON, Oct. 2 -- The Government Accountability Office has issued a report (GAO-21-104466) entitled "Medicaid Behavioral Health - CMS Guidance Needed to Better Align Demonstration Payment Rates with Costs and Prevent Duplication".

The report was sent to Sen. Ron Wyden, D-Oregon, chairman, Sen. Mike Crapo, R-Idaho, ranking member of the Senate Finance Committee, Rep. Frank Pallone Jr., D-New Jersey, chairman, and Rep. Cathy McMorris Rodgers, R-Washington, Republican leader of the House Energy & Commerce Committee,on Sept. 27, 2021. Here are excerpts of summaries associated with the report.

What GAO Found: "In 2016, the Department of Health and Human Services (HHS) selected eight states to participate in a time-limited demonstration to establish certified community behavioral health clinics (CCBHC). These states, in turn, certified 66 behavioral health clinics as CCBHCs. Required to provide a broad range of behavioral health services--mental health and substance use services--CCBHCs are reimbursed by state Medicaid programs using clinic-specific rates designed to cover expected costs. Under the demonstration, states receive enhanced federal funding for CCBHC services provided to Medicaid beneficiaries.

GAO found that five of the eight demonstration states reported generally increased state spending on CCBHCs, which officials from these states attributed to an increased number of individuals receiving treatment, an increased array of services provided, or both. In contrast, officials from the other three demonstration states did not report that the demonstration resulted in greater state spending. Officials from two of these states noted that the demonstration resulted in spending decreases, citing factors such as the demonstration's enhanced federal Medicaid funding. Officials from the remaining state said the effects on spending were unknown. In addition, four of the eight states assessed potential cost savings from the demonstration resulting from reductions in the use of more expensive care, such as emergency department visits. Officials from three of the four states viewed the results of their assessments as suggestive of potential cost savings, while officials from the fourth state did not.

GAO's review of payment guidance for the demonstration from the Centers for Medicare & Medicaid Services (CMS), an agency within HHS that oversees Medicaid at the federal level, found that the guidance lacked clear and consistent information on better aligning CCBHC payment rates with costs and preventing duplicate payments. For example:

* CMS guidance gives states the option to rebase their initial payment rates after the first demonstration year (i.e., use data on actual costs incurred and number of client visits during the first demonstration year to recalculate rates for subsequent years). CMS officials said rebasing would mean states would not have to rely on anticipated cost and client visit data after the first year, and would align rates more closely with costs. While officials said CMS expected all states to rebase their rates at some point, CMS's guidance does not reflect this expectation, or provide details on rebasing, such as suggested time frames.

* CMS guidance conflicts as to whether CCBHCs that are also Federally Qualified Health Centers (FQHC)--safety net providers that generally provide some behavioral health services--should receive CCBHC and FQHC payments for the same client on the same day if provided services overlap.

Addressing these weaknesses is important to help ensure that Medicaid CCBHC payments meet requirements for Medicaid payments under federal law, including that they be consistent with efficiency, economy, and quality of care, and are sufficient to ensure access to care."

Why GAO Did This Study: "Behavioral health conditions affected an estimated 61.2 million adults in 2019. Congress has taken steps to expand access to behavioral health treatment, including authorizing the CCBHC demonstration, which is intended to improve the availability of community-based behavioral health services.

The CARES Act included a provision for GAO to report on states' experiences participating in the CCBHC demonstration. Among other objectives, this report describes what states reported about how the CCBHC demonstration affected state spending on behavioral health services; and examines CMS guidance for states on Medicaid CCBHC payments.

GAO reviewed documentation from and interviewed Medicaid and behavioral health officials from the eight CCBHC demonstration states, as well as federal officials tasked with demonstration oversight. GAO also reviewed documentation and interviewed officials from a nongeneralizable sample of three CCBHCs, which GAO selected for a number of reasons, including variation in geographic location."

What GAO Recommends: "GAO is making two recommendations, including that CMS issue clear and consistent written guidance to help states (1) better align payment rates with clinics' costs; and (2) avoid potential duplication between CCBHC and other Medicaid payments.

HHS concurred with GAO's recommendations, and provided technical comments, which were incorporated as appropriate."

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September 27, 2021

To: The Honorable Ron Wyden, Chairman, The Honorable Mike Crapo, Ranking Member, Committee on Finance, United States Senate

The Honorable Frank Pallone, Jr., Chairman, The Honorable Cathy McMorris Rodgers, Republican Leader, Committee on Energy & Commerce, House of Representatives

Behavioral health conditions--mental health conditions, such as depression, and substance use disorders, such as opioid use disorder-- affect a substantial number of adults in the United States. In 2019, about 61.2 million adults had a behavioral health condition, according to the most recent estimates from the Substance Abuse and Mental Health Services Administration (SAMHSA)./1 Research has shown that low-income individuals, such as those enrolled in Medicaid--the joint federal-state program that finances health care coverage for certain low-income and medically needy individuals--are at greater risk for developing behavioral health conditions./2 Comprehensive and coordinated care is especially important for individuals with behavioral health conditions, because these individuals may have co-occurring conditions (i.e., a mental health and a substance use condition at the same time), and experience higher rates of physical health conditions./3

However, SAMHSA's survey data show that, in 2019, most individuals with behavioral health conditions--about 55 percent of adults with mental health conditions and almost 90 percent of individuals aged 12 and older with substance use disorders--did not receive treatment. Even when individuals with behavioral health conditions do receive treatment, they may not receive the full range of services needed to fully recover./4 Since March 2020, concerns about access to care have intensified due to the Coronavirus Disease 2019 (COVID-19) pandemic, and as we previously reported, evidence suggests that during the pandemic the prevalence of behavioral health conditions has increased, while access to in-person behavioral health services has decreased./5

Prior to the pandemic, Congress took steps to expand access to treatment for individuals with behavioral health conditions. The Protecting Access to Medicare Act of 2014 (PAMA) authorized funding for a time-limited demonstration program for certified community behavioral health clinics (CCBHC) in eight states, and tasked the Department of Health and Human Services (HHS) with its implementation./6 CCBHCs are required to provide access to nine categories of services, including outpatient mental health and substance use services, and primary care screening and monitoring, without regard for clients' ability to pay.7 According to HHS, CCBHCs are intended to ensure access to, and coordination of, care so that individuals receive timely diagnostic, treatment, and supportive services.

PAMA directed the Centers for Medicare & Medicaid Services (CMS), the agency within HHS that oversees Medicaid at the federal level, to issue guidance to establish a payment system to reimburse CCBHCs for services provided to Medicaid beneficiaries. In 2015, CMS issued guidance establishing a payment system for the demonstration, one that uses clinic-specific rates designed to cover the expected cost of providing the full range of required services. PAMA also required HHS to evaluate the effects of the CCBHC demonstration on access to community-based behavioral health services for individuals enrolled in Medicaid in participating areas of the state compared with non-participating areas; the scope and quality of CCBHC services compared to non-participating areas of the state and non-participating states; and the demonstration's effect on federal and state costs./8 Participating states are not required to conduct evaluations, and little is known about whether states have assessed the effects of the demonstration on outcomes or costs in their states.

The CARES Act included a provision for GAO to report to Congress on states' experiences participating in the CCBHC demonstration, including states' efforts to measure the effects of CCBHCs on clients' health and cost of care, and the accuracy of Medicaid payments to CCBHCs./9 In this report, we

1. describe steps states took to measure the effects of the CCBHC demonstration on quality of care, including clients' health outcomes;

2. describe what states reported about how the CCBHC demonstration affected state spending on behavioral health services; and

3. examine CMS guidance for states on Medicaid CCBHC payments.

To describe steps states have taken to measure the effects of the CCBHC demonstration on quality of care, including clients' health outcomes, we reviewed documentation provided by officials from the eight original demonstration states: Minnesota, Missouri, Nevada, New Jersey, New York, Oklahoma, Oregon, and Pennsylvania. We also reviewed other relevant documentation describing provision of care and services, including information provided by officials or publicly available information published by federal evaluators and relevant stakeholders, such as a behavioral health research organization and an advocacy group. In addition, we interviewed officials from state Medicaid agencies, behavioral health agencies, or both, from the eight demonstration states between November 2020 and April 2021. We focused our analysis on the states' voluntary efforts to examine quality of care beyond what was required under the demonstration; for example, we asked states about the types of measures and tools they used./10 We also interviewed officials from selected CCBHCs to obtain their perspectives about the CCBHC model and clinic evaluation efforts. We selected a non-generalizable sample of three CCBHCs to achieve variation with regard to geographic location, Medicaid delivery systems, and CCBHC payment models./11 To describe what states reported about how the CCBHC demonstration affected state spending on behavioral health services, we requested documentation from, and conducted interviews with, officials from state Medicaid agencies, behavioral health agencies, or both, from the eight original demonstration states and officials from three selected CCBHCs.

We reviewed any documentation provided by these officials, which included summary information and results from state assessments that states voluntarily undertook to examine the demonstration's effects on state spending on behavioral health services. We also reviewed other relevant documentation describing state-related demonstration costs, spending, and planning, including information available on state and federal websites, such as budget documentation and state plan amendments.

To examine CMS's guidance for states on Medicaid CCBHC payments, we reviewed CMS's 2015 guidance on establishing and updating clinic-specific reimbursement rates, sets of questions and answers regarding CCBHC payments that CMS published on its website, and presentation slides from technical assistance webinars related to CCBHC payments that CMS conducted in 2015 and 2016. We interviewed officials from the three HHS agencies with responsibility for the CCBHC demonstration: SAMHSA, CMS, and the Office of the Assistant Secretary for Planning and Evaluation, which is tasked with conducting HHS's evaluation of the CCBHC demonstration. We also reviewed HHS's evaluation reports on the demonstration, and interviewed officials from the eight original demonstration states and three selected CCBHCs previously mentioned.

We assessed CMS's CCBHC payment guidance to determine the extent to which it helps ensure that Medicaid CCBHC payments meet requirements for Medicaid payments under federal law, which require that they be consistent with efficiency, economy, and quality of care, and are sufficient to ensure access to care./12

We conducted this performance audit from August 2020 to September 2021 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

See footnotes here: https://www.gao.gov/assets/gao-21-104466.pdf

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Conclusions

The CCBHC demonstration has allowed states to experiment with a new model of care, with the goal of ensuring access to comprehensive, coordinated, and timely care for individuals with behavioral health conditions. The length of the demonstration has been extended from 2 years to over 6 years, expanded to two additional states, and there is congressional interest in expanding the demonstration nationwide. As the demonstration grows, it is critical that CMS provide consistent and clear guidance to states to ensure that payment rates are better aligned with clinics' costs and reduce the potential for duplicate Medicaid payments.

Safeguarding resources intended to help ameliorate behavioral health conditions for vulnerable populations is especially important in the context of the COVID-19 pandemic, which has exacerbated behavioral health concerns across the nation and underscored the need for access to care.

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Recommendations for Executive Action

We are making the following two recommendations to CMS:

The Administrator of CMS should issue clear and consistent written guidance that highlights the importance of rebasing CCBHC payment rates based on actual costs and provides more detailed information on when and how states should rebase their rates, such as suggested time frames. (Recommendation 1)

The Administrator of CMS should provide clear and consistent written guidance to states on how to avoid potential duplication between Medicaid CCBHC payments and other Medicaid payments. (Recommendation 2)

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Agency Comments

We provided a copy of this draft report to HHS for review and comment.

HHS provided written comments, which are reprinted in appendix II. In its comments, HHS noted the range of activities CMS had taken to provide guidance to states on Medicaid CCBHC payments, as reflected in our report, while also acknowledging the need to clarify guidance for the demonstration moving forward. HHS concurred with both of our recommendations, and stated that CMS will update its written CCBHC payment guidance to provide additional information for states on (1) rebasing rates based on actual costs, and (2) avoiding duplication between CCBHC payments and other Medicaid payments. HHS also provided technical comments, which we incorporated as appropriate.

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The text of the GAO report is available at https://www.gao.gov/products/gao-21-104466

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