State alters mental health payments

Clinics to receive flat fee instead of pursuing claims

May 17, 2002|By Jonathan Bor | Jonathan Bor,SUN STAFF

The Maryland health department unveiled a plan yesterday to ease the financial pressures that have forced about a dozen mental health clinics to close in recent months.

Health Secretary Dr. Georges Benjamin said the clinics will be paid a flat fee to care for uninsured - or underinsured - patients, freeing them from the hassle of pursuing claims for services.

At the same time, the state will impose stricter income-eligibility requirements on "gray zone" patients, so called because they make too much to qualify for Medicaid but lack private insurance or enough coverage to afford care.

That group accounts for about 16,000 of the 80,000 people who are served by the outpatient clinics.

Beginning July 1, new "gray zone" patients accepted into the program will get free services only if they earn under 116 percent of the federal poverty level - less than about $10,000 for a single person without dependents.

Also, though the health department is guaranteeing that it will continue to serve every "gray zone" patient currently in treatment, Benjamin said it will "trickle in" new patients only as the budget allows.

"We have a responsibility for patients we are currently taking care of," Benjamin said.

The health secretary said the growth in the number of uninsured people seeking care has slowed in recent years, so the number who are denied services should be small.

The changes, required to a great extent by the budget passed last month by the General Assembly, were arrived at during meetings involving health department, legislators and industry representatives.

Operators of mental health clinics had complained that rates paid by the state Mental Hygiene Administration had forced many to run deficits, some so severe that clinics closed.

The budget provides a $42 million increase in funding for community mental health services, increasing total spending to $446 million. Not quite half of the money comes from federal matching grants.

The health department plans to increase the rates paid to psychiatrists who see patients at the clinics but doesn't plan rate increases for the broad range of services offered there.

The agency said the shift to a grant system for coverage of "gray zone" patients should help ease clinic operators' common complaint that they waste time and money chasing claims that are denied, delayed or lost in the system.

In some respects, the change marks a partial swing back to the state's former way of paying for services.

For many years, the state issued grants that clinics could use to pay for care. This forced clinics to live within budgets, limiting the number of patients they could serve in a year.

But in 1997, the state shifted to a fee-for-service system, reimbursing clinics for each service offered to each patient. The intent was to make mental health services more widely available, but the state never anticipated rolls would double in four years.

Recent efforts at cost-containment have angered clinic operators, who said the state was trying to squeeze them.

Yesterday, clinic operators said the changes should help reduce administrative costs but might also exclude people who need services.

"I'm hoping that the state is right - that there won't be too many people waiting to come in," said Rich Bayer, chief executive of Upper Bay Counseling and Support Services in Elkton and president of the Community Behavioral Health Association of Maryland.

Brian Peake, director of Step Inc., which operates centers in Baltimore, Easton, Westminster and Bel Air, said uninsured people who don't qualify will have difficulty. "If you're making $10,000 a year, once you've paid for your medications, you don't have much left over," Peake said.

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