Once ranked among the nation’s best, New Hampshire’s mental healthcare system has steadily eroded since the turn of the century, and grown more distressed in the past decade as the demand for mental health services has far outrun the capacity to provide them.

In January, the NH Department of Health and Human Services released a 10-year plan to restore the system — the third of its kind in the past decade. The plan proposes an initial investment of $21.7 million in the next biennium to jump-start the process.

In his budget address, Gov. Chris Sununu said, “We’re not going to slow-roll this plan over 10 years,” adding that with budgeted funds and executive actions, two-thirds of the recommendations will be addressed immediately. He acknowledged that “these efforts will not fix the system overnight,” but expressed confidence that New Hampshire would once again “set the gold standard for the rest of the nation.”

Senate lawmakers are taking Sununu at his word and pressing to hasten pursuit of the 10-year plan with the introduction of at least two bills aimed at injecting surplus funds into the Medicaid system in order to stabilize reimbursements to providers and add more inpatient beds among other things.

Lower reimbursement rates

The decline of New Hampshire’s mental health system didn’t happen overnight and was the result of a slew of factors [See Sidebar]. Regardless of the causes, the effect has been continued and mounting financial pressures on the community mental health centers, which not only deal with patients with mental health issues, but with the effects of New Hampshire’s ongoing opioid crisis. In fact, most of the “spokes” in the state’s recently launched “hub and spoke” addiction treatment model are the very same community mental health centers.

Medicaid payments represent about three-quarters of the centers’ total revenue and 85 percent of patient revenue. Reimbursement rates, which have been among the lowest of all states and well below the national average, have not risen since 2006, and during the recession, when services were trimmed or eliminated, were reduced.  

“We live and die by the rates,” said Peter Evers, president and CEO of Concord-based Riverbend Community Mental Health Inc.

This problem was exacerbated last year during the reauthorization of the state’s expanded Medicaid program — called Granite Advantage – when the state switched over to a managed care model, said Sen. Tom Sherman, D-Rye, who sits on the Sen. Health and Human Services Committee.

He explained that before the switch, mental health and substance abuse services were being reimbursed at commercial insurance levels. These levels were higher than the reimbursement rates offered by managed care organizations such as WellSense or New Hampshire Healthy Families, for example. But last year, state legislators switched to the managed care model.

“And what that did instantly in behavioral health and mental health was to further lower reimbursement rates for services,” said Sherman. “So you've already got a system in crisis. You're competing with our neighboring states for a manpower, for, for workers, and you've already got a bunch of openings and then you're cutting available funds to pay salaries and overhead because you're reimbursement is dropping. So that's the picture coming in. And that started as of January 1, 2019.”

And the picture wasn’t that rosy to begin with.

New Hampshire Medicaid reimburses mental health providers at about 58 percent of the rates paid by commercial carriers, and both Medicaid and commercial rates in New Hampshire are lower than those in neighboring states.

According to the American Academy of Pediatrics, which surveyed Medicaid reimbursement rates in 2015, in New Hampshire a psychiatric evaluation was reimbursed at $87.82, compared to $117.42 in Massachusetts and $104.13 in Vermont. An evaluation with medical services was reimbursed at $65 in New Hampshire — the lowest rate in the country — but $95.06 in Massachusetts and $115.63 in Vermont. And 30 minutes of therapy in New Hampshire was reimbursed at $32.50, but $48.53 in Massachusetts and $51.55 in Vermont.

Although the centers primarily serve those enrolled in Medicaid, commercial insurers reimburse mental health providers at lower rates than those paid to other medical practitioners, despite a federal law requiring that mental health and substance abuse be treated on a par with medical and surgical procedures.

Milliman, an actuarial firm, reported in 2017 that, on average, mental health providers were paid 20 percent less than those providing primary care and specialist services. The same firm reported that New Hampshire was one of nine states where primary care physicians were paid 50 percent more than mental health providers for comparable services.

Financial reports prepared by the Kane Consulting Group calculated that, between 2004 and 2014, the aggregate operating and total margin of the 10 community mental health centers has fluctuated between break-even and 1.5 percent for the entire period. However, performance varied.

Some centers posted low — “generally negative” — operating and total margins while others posted margins at break-even, and four posted positive margins. The report concluded that apart from some of the top four, “none of these centers had the financial resources to significantly expand their services.”

Fading finances

Years of low reimbursement rates have also stymied progress that might have otherwise occurred.

In 2012, the Disabilities Rights Center brought suit in federal court against the state on behalf of clients unnecessarily institutionalized because of the shortcomings of the mental health system. The state settled the suit, agreeing to take immediate steps, which mirrored earlier recommendations to expand and improve community-based services within six years.

For the first time, mobile crisis teams were established in Manchester, Nashua and Concord to respond on-site and around the clock to those in crisis to avert unnecessary hospitalization or incarceration. Likewise, for the first time Assertive Community Treatment teams would be extended throughout the state with capacity to serve 1,500 people on-site in a timely manner. The state also undertook to expand supportive housing programs and employment services. The settlement provided for an “expert reviewer” to report twice each year on implementation and compliance of the terms.

The most recent report, issued in July 2018, found “some real and measurable accomplishments,” but noted that “implementation issues remain time-consuming and frustrating” and “there are areas of continued non-compliance.”

Following the settlement, state expenditures for mental health rose from $97.6 million in FY 2013 to $144.1 million in FY 2015, an increase of 48 percent, and reached $159.4 million in FY 2018. General fund expenditures for mental health jumped 74 percent, rising from $51 million to $89 million in the same period.

However, the NHCBHA, while supporting the settlement though not party to it, has stressed that the centers, despite their strained finances and short staffs, are responsible for offering the services the settlement requires. The association claims that because reimbursement rates fail to cover the cost of these services, the centers have been left to subsidize these programs.

In addition, introduction of a new Medicaid payment system, which outsources care management and payment administration to Medicaid care organizations, has added to centers’ paperwork burden, according to Craig Amoth, CEO of the Greater Nashua Mental Health Center, who has written that staff at one center completed more than 56,000 documents in addition to documenting clinical services.

Doctors with Boarders

Another casualty of low reimbursement rates is patients in mental health crisis having to wait weeks at a time in hospital Emergency Rooms because there are not enough inpatient beds --voluntary or involuntary --in the state to house them.

During this time, they are fed and housed and in some cases are checked on by a contracted Psychiatric provider once a day until they can be transferred. Sherman explained that under the current system, the hospital eats this cost, since neither Medicaid nor commercial insurers reimburse for the time spent in the emergency room.

“So if I have Harvard Pilgrim and I have a mental health benefit, but I am not going into another facility I am just sitting there, the insurers are not paying the hospitals for that time,” Sherman said. “They were saying nothing is being done, we’re not going to pay for it. So the hospitals were taking a bath on the ER boarding crisis.”

The National Alliance for Mental Illness New Hampshire (NAMI-NH) reported that the number of mentally ill involuntarily held in hospital emergency rooms awaiting admission to New Hampshire Hospital or a DRF has risen by 350 percent in the past three years.

According to DHHS, the average daily waiting list by month was 24 in the 2014 fiscal year, 25 in 2015 and 28 through June 2016, then rose to 40 between July 2016 and July 2017 before jumping to 50 between August 2017 and May 2018. Moreover, many inpatient stays have lengthened for lack of community-based resources, especially housing, hindering the process of returning patients to the community.

‘Encouraging’ efforts

DHHS began addressing the most immediate issues before releasing the most recent 10-year plan in January. In FY 2019, which ends on June 30, the department temporarily raised Medicaid reimbursement rates by $6 million and made a targeted payment of $5 million to community mental health centers.

At the same time, lawmakers are seeking to draw from the state’s $130 million surplus to invest another $9.5 million in the mental health system in FY 2019. Sherman’s SB 11 along with SB 5 sponsored by Sen. Cindy Rosenwald, (D-Nashua) will specifically take aim at reimbursement rates in order to address some capacity and funding issues.

“We want to jump-start this process and implement the 10-year plan in two years,” Sherman said, adding he was encouraged that the governor indicated he too favored accelerating the 10-year plan. “His priorities mirror the priorities we have in our bills,” said Sherman. “The governor’s willingness to reinforce what the Senate is doing is encouraging.”

“[The governor’s] priorities mirror the priorities we have in our bills,” said Sherman,  the prime sponsor of Senate Bill 11, which, in January, was passed in the Senate on a 16-8 vote and was referred to the Senate Finance Committee.

Rosenwald’s bill—SB 5—Sherman explained, will take roughly $3 million out of the surplus to cover the amount of money lost in Medicaid reimbursements when the state switched to a managed care system. Sherman said that money could end up representing as much as $40 million in federal matching funds.

He explained that New Hampshire has two kinds of Medicaid—traditional and expanded. With traditional Medicaid, the state covers 50 percent of the costs, the feds cover the other 50 percent. Under expanded Medicaid, the state covers 10 percent of the cost, the feds cover the other 90 percent.

“So whatever money we invest,” Sherman said. “There is a significant return on investment.”

As for Sherman’s SB 11, that one aims to address both the Emergency Room boarding crisis and the lack of beds in the state by creating more beds, raising reimbursements for hospitals, creating a boarding rate and requiring insurers to pay for mental health services a person receives while waiting for a bed, among other things.

The measure would appropriate $2 million to increase rates to establish additional community-based beds and $1 million to raise voluntary inpatient admission rates to create additional community-based inpatient beds.

SB 11 would also appropriate $3 million to renovate existing hospital space for construction of three new or expanded Designated Receiving Facilities (DRFs), each with at least 10 beds and all in regions with a dearth of inpatient treatment capacity. In return for the funds, hospitals would commit to operating the DRFs for a minimum of five years.

The bill would also require commercial insurers to compensate hospital emergency departments and mental health providers for the cost of boarding and treating those with symptoms of mental illness at a rate comparable to those paid for medical and surgical services.

Another $3 million would be appropriated to the Affordable Housing Fund of the NH Housing Finance Authority to provide transitional housing to those leaving mental health treatment facilities.

Next Steps

Sherman warns that none of these bills are silver bullets and that long term planning and funding will be necessary going forward. What makes him optimistic that this time may be different than the other times, is that there so far has been overwhelming bipartisan support for properly funding the behavioral health system in New Hampshire. And that may start with the 10-year plan.

The 10-year plan recommends expenditures of $11.95 million in FY 2020 and $9.7 million in FY 2021, which will be considered as the biennial state budget is prepared

“At a minimum,” the plan recommends sustaining the increase in reimbursement rates by $3 million in each year of the coming biennium, while noting that additional funding with a federal match would be required to bring rates to the national average. The plan calls for developing a timeline to reach the national average.

The rates for DRFs would be doubled to provide incentives to expand existing facilities and open new ones. The plan recommends applying $1.2 million in each year of the biennium for each additional DRF with 10 beds, along with $2 million for hospitals to renovate space for new DRFs in return for a commitment to maintain as well as run them for at least seven years.

The plan also recommends constructing a forensic hospital for civilly committed, mentally ill adults housed at the New Hampshire Hospital. In his budget address, Sununu said the facility would be built on the New Hampshire Hospital campus with capacity for 60 patients at an estimated cost of $40 million. The project would open some 30 beds at New Hampshire Hospital.

For the first time, the 10-year plan includes specific measures and recommendations to address the mental health of children. Among these is an option of opening a residential treatment facility for children now served at New Hampshire Hospital at the Sununu Youth Center in Manchester, where a 36-bed unit could be renovated. Apart from providing a more appropriate environment for children, this project would enable a wing of the hospital to be renovated, adding another 48 adult beds to its capacity.

The plan also recommends investing $4.2 million in the next biennium for supervised housing for youths, respite beds for peers and more beds for adults.

The housing bridge program, which subsidizes rents for qualified applicants receiving mental health services, would also be expanded. Another $2 million would fund transitional programs for adults and children who no longer require inpatient care but are not prepared for independent living. And in response to a 48.3 percent increase in the suicide rate between 1999 and 2017 — the third highest in the country — the plan recommends applying $1.9 million toward suicide prevention and community education.

“The multi-pronged effort we will undertake is, quite frankly, the single largest step this state has ever taken to reform our mental health system,” said Sununu in his budget speech. Still, it is the first step of more that must follow.

As Senator Sherman said, “the proof is in the pudding.”

[This story was produced for The Granite State News Collaborative as part of its Granite Solutions reporting project. For more information, visit collaborativenh.org.]

[GSNC Project Editor Melanie Plenda contributed to this report]

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