One of the most important effects of the Patient Protection and Affordable Care Act (ACA) is the profound change in the coverage of behavioral health services.  Building on the Mental Health Parity and Addiction Equity Act of 2008, the ACA requires both Medicaid and Medicare to provide far more robust behavioral health benefits, especially in the area of substance abuse. This expansion of benefits is not without growing pains – healthcare providers are waking up to the new reality of a vastly expanded need for substance abuse and other mental health services.

As state Medicaid programs struggle to finance these new benefits, the need for behavioral healthcare providers and clinicians has become acute.  This is especially true in Kentucky, where access to substance abuse care is crucial due to the epidemic of prescription drug and heroin addictions.

Fortunately, however, the Cabinet for Health and Family Services has taken proactive steps to strengthen and expand behavioral health infrastructure to meet the ACA’s directives.

New Class of Providers

Prior to the ACA, Kentucky’s Medicaid program reimbursed behavioral health services through community health programs such as Bluegrass Comprehensive Care Services. Now, however, the Commonwealth has recently finalized regulations that create a new class of providers that can receive payment from Medicare or Medicaid for the provision of behavioral health and substance abuse services.

One of the new provider types, licensed under 902 KAR 20:430, is the Behavioral Health Services Organization (BHSO), which is authorized to provide a comprehensive array of services that may include physician, therapy, residential and other services.

This new licensure category has created an opportunity for healthcare providers to provide a broad array of mental health and substance abuse services in a non-hospital outpatient setting that may be reimbursed by Medicaid and Medicare for the first time.  Receiving licensure as a BHSO, however, now allows these providers to also enroll in the Medicaid and Medicare programs.

In addition, Kentucky’s Medicaid program now recognizes a group practice of licensed therapists as providers, enabling these groups to receive reimbursement for covered therapy services.

One of the more direct benefits of becoming a BSHO is that it may provide physician services for medically directed substance abuse treatments that include prescribing medications for opioid addiction.  Prior to the ACA’s mandate, Kentucky’s Medicaid program would not reimburse a physician treating a patient with substance abuse disorders. Physicians may also treat these patients in their practices and bill Medicaid for their services.

Motivating Physicians

Unfortunately, Medicaid and its MCOs have not reimbursed these services at a level that motivates physicians to provide these important services to patients with substance abuse disorders. The inadequacy of payment creates barriers to accessing treatment as physicians have no incentive to treat these often difficult patients.

When  federal limitations on the numbers of patients that can be treated by physicians is coupled with low reimbursement for physicians, access to care for Medicaid patients is further limited – often preventing patients from obtaining the very treatment that will allow them to function.  Now, medically directed treatment is a covered Medicaid service, which should provide access to eligible patients who previously had to pay cash to get this important treatment.

Step in the Right Direction

Kentucky’s Cabinet for Health and Family Services has cleared the way for Medicaid to provide a host of new covered mental health and substance abuse treatments that will address a crucial need in the Commonwealth. The healthcare industry is at the start of massive changes in how behavioral health is provided and in what settings. These new providers are Kentucky’s attempt to bolster existing infrastructure in behavioral health, particularly in the area of substance abuse treatment.

While a step in the right direction, these organizations are far from a perfect solution.  To make these services available, Medicaid must pay for them at a level that motivates providers to make them available.  In addition, identification of behavioral health problems must be integrated into primary care through behavioral health screenings accomplished by primary care physicians with attendant training for accurate referral.

Lisa English Hinkle is a Member of McBrayer, McGinnis, Leslie & Kirkland, PLLC.