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Mental Health Liaison Group Members


Peter Newbould & Chris Koyanagi, Cochairs, Health Policy Committee


Medicaid Signon Letter


December 14, 2005

As mentioned in our December 2 meeting, we are circulating a letter expressing opposition to several provisions in the House-passed budget reconciliation legislation that would harm Medicaid beneficiaries.  The following letter explains our concerns on EPSDT, targeted case management and copayments.  As the conference discussions of this bill will begin soon, we need to get the letter out quickly.  To cosign please reply to this email or call Peter at 202-336-5889 by COB on Thursday, December 15.

Letter to be sent to Sens. Grassley & Baucus and Reps. Barton & Dingell

On behalf of the undersigned organizations in the Mental Health Liaison Group (MHLG), we are writing to urge that Congress ensure the final version of the Deficit Reduction Act of 2005 (H.R. 4241/S. 1932) does not adversely affect children and adults with mental and emotional disorders who depend upon the Medicaid program for access to mental health care.  We are particularly concerned about provisions in the House bill that would modify the coverage for children and adults with these disorders.

Retain Coverage of Services Deemed Medically-Necessary: Many of the critical community services individuals with mental disorders need are covered through the Rehabilitation, Clinic or Targeted Case Management (TCM) services of Medicaid.  Section 3124 of the House bill would allow states to offer these individuals a different benefit package, one based on private insurance (benchmark) plans.  However, these plans typically have severe and inappropriate limitations on the extent of coverage (limits on the number of outpatient visits or inpatient hospital days) and do not cover the intensive community services that states now offer to persons with serious mental disorders under Medicaid.  Depriving children and adults of access to effective community services increases the likelihood that they will experience institutional placement, homelessness, or other dire consequences.

Keep the EPSDT Mandate For All Children: Provisions in the House bill that would eliminate the Early and Periodic, Screening, Diagnosis and Treatment (EPSDT) mandate for many children are harmful.  While the bill protects children in mandatory eligibility categories, including SSI children, many children with serious mental and emotional disorders who qualify for Medicaid through other optional groups would be at risk.  Under current Federal law, all children have access to any medically-necessary service covered under Medicaid – a protection that enables them to receive prompt care for any health condition.  This protection is critical because untreated mental disorders can escalate into more serious problems.

As President Bush’s New Freedom Commission on Mental Health noted in its final report, early intervention can have a significant impact on the lives of children and adults who experience mental health problems.  The Commission recognized that “early childhood is a critical period for the onset of emotional and behavioral impairments” and concluded that “[s]ince children develop rapidly, delivering mental health services and supports early and swiftly is necessary to avoid permanent consequences.”

Beneficiary Out of Pocket Increases Will Harm Access: The House bill allows states to charge premiums for Medicaid and permits providers to deny services to individuals who have failed to pay their premiums or copayments.  Denial of care based on inability to pay for low-income individuals who have no other recourse is unconscionable.

Medicaid-Covered Services to Medicaid-Covered Individuals Should Be Reimbursed: We support the language in both bills that clarifies non-governmental entities with an obligation to pay for a service (such as a health insurance plan) must be billed first.  However, we are concerned that both the House and Senate bills contain language allowing the federal government to deny federal financial participation to states for services that are covered by Medicaid and provided to a Medicaid-eligible individual, but which might be covered by another government program.  Such changes fundamentally alter the nature of Medicaid as an insurance program, and the denial of Federal matching funds may well result in the service not being furnished at all.  Medicaid beneficiaries, not the states, will be most harmed by these provisions.

For example, under the Individuals with Disabilities Education Act (IDEA), schools are responsible for funding related services for children with disabilities.  Under current Medicaid law, any Medicaid service furnished to a Medicaid-eligible child is paid by Medicaid, even if the service is part of the child’s special education program.  Because IDEA appropriations are capped, the proposed third party payment language denying federal Medicaid payments in these circumstances will almost certainly result in the child not receiving the required service.

In conclusion, it must be remembered that Medicaid is a critical part of America’s safety net.  The cuts in Medicaid contained in these bills will be devastating to individuals with mental disorders and to the public mental health system that relies on Medicaid as its major source of funding.  Medicaid must continue to play its significant role in underpinning the health and mental health systems in this country as low-income individuals covered by this program have nowhere else to turn.


American Psychological Association
Bazelon Center for Mental Health Law

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