New Mexico Providers Prepare for Major Restructuring of Behavioral
Health System
On July 1, New Mexico will launch an ambitious program to create a
single delivery system for mental health and substance abuse services that
will be provided through 15 state agencies. The state’s Behavioral Health
Collaborative, which will be managed by ValueOptions, means that the
state’s community mental health providers will see nearly all of their
funding rolled up into one contract.
The program will combine $300 million to $350 million for services that
range from Medicaid and indigent care for adults and children to community
correctional programs. All told, the program will cover about 60,000 New
Mexicans. A tight budget and demand for coordinated services prompted
state officials to embark on the ambitious restructuring in 2003.
With only a couple of months for the state and its managed care
contractor to prepare for the system change, many throughout the state are
hoping for the best. “This is probably one of the more ambitious projects
going on in the nation,” William C. Daumueller, president of the New
Mexico Behavioral Health Providers Association, told NC News. “We’re not a
big state, but when you look at all the things that are being rolled into
one contract, it’s a huge, massive restructuring and change in the way
business has been done over the past years.”
If the program is successful, other states might consider the approach
as a way to achieve economies of scale, Daumueller said. But if it falls
under its own weight, other states would probably want to avoid it.
State officials announced the choice of ValueOptions as the program’s
manager on April 1. “From the very beginning of this redesign process, the
Collaborative was clear that we were looking for a true partner in
streamlining behavioral health services, and I believe we’ve found that
with ValueOptions,” Pamela Hyde, Secretary of the state’s Department of
Human Services, said when announcing the decision.
ValueOptions has had prior experience in New Mexico as the manager of
one of three Medicaid behavioral health programs integrated with physical
health. (Federal Medicaid officials pulled the plug on the three-year-old
carve-in program in 2000.) The company also has experience managing
programs in Colorado, Maricopa County, Ariz., and Dallas-Forth
Worth.
The new program holds plenty of potential for coordination of
services and better utilization of funding, Daumueller said. But that
change won’t come with additional funding, and that could be something of
a challenge.
“We’re all a little apprehensive,” said Daumueller, who is CEO of
Southwest Counseling Center and on the board of directors for the
provider-sponsored network Rio Grande Behavioral Health.
Another fear that CMHCs have is the possibility of the state moving to
a strict fee-for-service system, he said. Providers are hoping that the
program will embrace more innovative and flexible forms of payment, such
as case rates and other forms of capitation, and will make use of
provider-sponsored networks.
The program’s primary objective in the first year is to get a handle on
processing data and making sure that providers get paid. “The main goal is
not to mess anything up — to make sure providers get paid and consumers
don’t fall through the cracks,” said Daumueller.
The change means that about 85 percent of community providers’ budgets
will come from one payor source. The scariest part involves services for
the indigent, which will receive flat funding for several years.
“Hopefully our expectations won’t outrun our funding, because we’re
talking about a lot of consumer choice, but there’s no extra money,” he
said. Adding providers to the system to offer consumers more choice means
money will be taken away from the system’s existing providers and that
could be troublesome.
One of the reasons the state is going to the new system is to better
utilize the funding they do have by reducing fragmentation. And hopefully
that will be the outcome, Daumueller said. “I think we’re all on the same
side as far as wanting this thing to work.”
Daumueller said the state’s decision to focus on getting providers paid
is an important one. He expects that the program will find a way to
approximate what people have been paid in the past, even if it eventually
goes to a fee-for-service system, just to get money to providers.
“Otherwise there’s going to be a lot of cash flow problems throughout the
state,” he said.
Many providers don’t have six months of revenue to
live on. A significant shortfall of cash for two or three months would
hurt a lot of them and put some of them out of business.
Providers also wonder whether they will eventually have to change
information systems. For Medicaid, it appears they will be able to submit
standard billing forms. But questions remain about reporting non-Medicaid
services. A lot of things need to happen between now and June 30, such as
developing contracts with all the providers across state. “It’s a huge
undertaking,” Daumueller commented.
A lot of good philosophy went into designing the program, which is
oriented toward recovery and resilience, but the transition to the new
system will need to be done in an orderly fashion so it doesn’t implode
under the weight of the start-up, which will be considerable.
It appears state officials chose the best proposal in selecting
ValueOptions. Most attractive to CMHCS is the managed care company’s
history of forming partnerships with providers, as they’ve done most
notably in Colorado. They’ve also selected local people with strong
experience in New Mexico to run the program. For instance, Pam Galbraith,
the program’s CEO for ValueOptions, is currently the administrator for
Behavioral Health Hospitals and Programs at the University of New Mexico
Health Services and has worked in the university’s health system for 33
years.
As with any managed care program, however, the proof is in the pudding,
Daumueller said. “It remains to be seen how well we all do our jobs.”
Providers in the state are already working to become more quality
oriented by reducing paperwork, focusing on no-shows and becoming more
productive — all changes that are essential under any system.
Daumueller has advice for providers: “Run quality services, be
productive and efficient, stay consumer-oriented, be flexible and take the
recovery model to heart. If we all do those things, regardless of whatever
else happens, we’ll be in better shape to survive and flourish in our new
environment.”
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