Issue Brief: The intersect of health reform and systems of care for children's behavioral health care.
Wotring, J., & Stroul, B. (2011).
Washington, DC: Georgetown University Center for Child and Human Development, National Technical Center for Children's Mental Health.

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(President Obama signing health care legislation into law in 2010)

Introduction and Purpose
This is a time of monumental change in health systems across the United States. With the passage of the Patient Protection and Affordable Care Act on March 23, 2010, referred to as the Affordable Care Act (ACA), an additional 41 million Americans will gain access to health care and the financing, organization, and delivery of health services, including mental health and substance use services, will be revolutionized. Activities are underway to implement provisions of the ACA in 47 states and the District of Columbia, as well as at the federal level. As states and federal agencies plan and implement the ACA, particular attention must focus on how mental health and substance use services (collectively referred as "behavioral health" services in this Issue Brief) will be covered and provided and, in particular, how the needs of children with serious behavioral health challenges and their families will be met.

The system of care approach has been the major framework for improving delivery systems, services, and outcomes for children with mental health needs for the past 25 years, shaping system reforms in many states, communities, tribes, and territories (Stroul, Blau, & Friedman, 2010; Stroul, Blau, & Sondheimer, 2008). Extensive research and evaluation have documented the effectiveness of this approach for improving the organization and delivery of children's mental health services, and for improving clinical and functional outcomes for children and their families (Manteuffel, Stephens, Brashears, Krikelyova, & Fisher, 2008). Although the system of care approach continues to evolve to reflect advances in research and service delivery, the core values of community-based, family-driven, youth-guided, and culturally and linguistically competent services are widely accepted. In fact, the guiding principles calling for a broad array of effective services, individualized care, and coordination across child-serving systems are extensively used as the standards of care throughout the nation.

The system of care approach offers tested models for implementing many provisions of the ACA in order to address the needs of children with or at risk for serious mental health and substance use challenges and their families. Applying the system of care approach to the implementation of health reform can assist states to build on 25 years of experience in system reform and, at the same time, meet the central goals of health reform—assisting Americans to obtain affordable, appropriate health insurance; improving the quality of care; increasing efficiency and reducing costs; and improving health outcomes. The ACA also provides an opportunity for states and communities to sustain and expand key elements of the system of care approach that are already a part of their service delivery systems.

Health Reform: Expanding Access to Health, Mental Health, and Substance Use Services
There are currently over 50.7 million uninsured people in the United States, and it is estimated that the ACA will provide coverage for 41 million of them (Congressional Budget Office [CBO], 2011; Washington Post, 2010). Coverage will be provided by expanding Medicaid and the Children's Health Insurance Program (CHIP), through the implementation of Health Insurance Exchanges that will offer an opportunity for individuals to purchase private health insurance policies at reduced rates, and through incentives for small businesses to provide health insurance to their employees.

Medicaid will be expanded to cover individuals with incomes up to 133% of the federal poverty level; the federal poverty is currently $22,350 for a family of four (Federal Register, 2011). CHIP will cover approximately 6.5 million additional children. It is estimated that by 2019, the expansions in Medicaid and CHIP will increase enrollment in these programs by 33%, covering approximately 17 million additional individuals (CBO, 2011; Washington Post, 2010).

The creation of Health Insurance Exchanges will further expand access to coverage. It is estimated that exchanges will provide coverage to an additional 24 million individuals with incomes up to 400% of the poverty level. The ACA also includes financial incentives for small businesses to offer insurance to their employees, penalties for large businesses that do not offer insurance, and a mandate for all individuals to obtain health care coverage beginning in 2014. An estimated 95 percent of U.S. citizens and other legal residents will have health insurance within six years (CBO, 2011; Washington Post, 2010).

Since behavioral health is an integral part of health, behavioral health benefits will be included in Medicaid, CHIP, and policies purchased through Health Insurance Exchanges. It is estimated that between 20% and 30% of the newly covered individuals (approximately 6 to 10 million) will be persons with mental health or substance use disorders who will require specialty services from behavioral health professionals (Substance Abuse and Mental Health Services Administration [SAMHSA], 2011a).

Another significant influence on access to behavioral health services has resulted from enactment of the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 that requires health insurance plans containing behavioral health benefits to allow consumers the same number of mental health visits as for other kinds of health care, at no greater cost, and not subject to any additional limitations. The law now will require all health plans sold through the state Health Insurance Exchanges to cover mental health and substance abuse services coverage at parity with physical health coverage (Mental Health Parity and Addiction Equity Act, 2008).

General Provisions
The ACA includes a number of general provisions that protect consumers' rights to access health care (Patient Protection and Affordable Care Act [ACA], 2010). A significant provision prohibits practices such as denial of coverage due to pre-existing conditions, annual and lifetime caps on coverage, and rescission of coverage due to health conditions. Adults denied insurance because of pre-existing conditions can now access insurance through high-risk insurance pools until 2014, when insurance companies will no longer be able to deny them coverage. However, this requirement is already in force for children under age 18, and, therefore, they can no longer be denied coverage due to pre-existing conditions. Another provision allows young adults to be covered under their parents' insurance plans until they reach the age of 26.

An ACA component of particular importance for children is the creation of a grant program to support Maternal, Infant, and Early Childhood Home Visiting Programs. These programs are now offered in 49 states and focus on improving the well-being of families with infants, toddlers, and preschool children. They provide nurses, social workers, or other professionals who meet with at-risk families in their homes, evaluate their needs, and connect them to services and supports that can make a positive difference in their child's health, development, and ability to learn (U.S. Department of Health and Human Services [DHHS], 2010).

The ACA also addresses the reality that racial and ethnic minority populations are disproportionately uninsured, often face systemic barriers to accessing health care services, and experience worse health outcomes. Accordingly, the act includes specific actions to address racial and ethnic health disparities and to promote cultural and linguistic competence in service delivery (ACA, 2010; SAMHSA, 2011a).

Other provisions of the ACA encourage states to coordinate and integrate primary care and specialty services for individuals with chronic problems through the use of health homes. States are encouraged to experiment with new models of integrated behavioral health and primary care in order to improve outcomes and reduce the costs of care. Health reform also seeks to improve the quality of medical practices, improve health outcomes in measurable ways, reduce industry waste and duplication, prevent medical error, enhance patient safety, increase the use of technology, and perhaps most difficult, "bend the curve" of rising costs (ACA, 2010; Washington Post, 2010).

All of these general provisions can positively impact access to treatment and the quality of care for children, youth, and young adults with behavioral health challenges, and their families. However, careful data collection and monitoring will be needed to ensure that these ACA provisions are implemented as required, and that appropriate and sufficient services are provided.

Major Components of the ACA
Given its alignment with the goals of health reform and its positive outcomes, the system of care approach provides an effective framework and approach for implementation of the major components of the ACA. The components of the ACA that have direct relevance to the system of care approach include:

1. Essential benefits packages in Medicaid, CHIP, Health Insurance Exchanges, and other insurance plans
2. Medicaid and CHIP expansion
3. Health homes
4. 1915(i) State Medicaid Plan Amendments
5. Money Follows the Person
6. Accountable Care Organizations

Essential Benefits in Medicaid: Work is currently underway to define a benefit plan that will be a "benchmark benefit package" for newly eligible Medicaid populations enrolled under the ACA. All new Medicaid enrollees will be entitled to this benchmark benefit package, and states can choose to offer benefits that exceed the benchmark package. The Department of Health and Human Services (DHHS), including SAMHSA, is undertaking activities to delineate an "essential benefits package" for behavioral health services to recommend for inclusion as part of the benchmark plan in Medicaid.

Insurance Exchanges and Other Insurance Plans: A Health Insurance Exchange is a governmental agency or nonprofit entity established by a state to offer an array of qualified health insurance plans for purchase by individuals with incomes from 133% to 400% of the federal poverty index and for small businesses. States must have their exchanges in place by January 1, 2014, or the federal government will develop an exchange for the state. States have wide discretion in setting the standards, requirements, and rates for plans offered in their Health Insurance Exchanges. States will determine the benefits that must be offered by the plans and will create rules to ensure that plans are transparent regarding both the benefits provided and their costs. Nearly all states have already received federal funds to assist in covering the costs of planning and implementing their exchanges.

In addition to the benefit package under development for Medicaid, an essential health benefits package is being developed by DHHS that will apply to all insurance plans offered through Health Insurance Exchanges, as well as to individual and small group health insurance markets outside of the exchanges. The Institute of Medicine (IOM) is charged with submitting recommendations to the Secretary of DHHS, and it is anticipated that rules regarding the essential health benefits package for insurance plans will be proposed by DHHS in 2011.

The ACA requires that the essential benefits package be the same as a typical employer-sponsored health insurance plan. The ACA also requires the Secretary of DHHS to ensure that this benefit package is appropriate for vulnerable populations, which includes children with behavioral health treatment needs. The statute lists general categories that must be covered, such as mental health and substance use disorder services, rehabilitative and habilitative services, and preventive and wellness services. Further, the ACA specifies four possible tiers of benefits. The silver and gold tiers are required, and as an option, states may enrich benefits by creating bronze and platinum plans. However, no details are specified under the categories of services or for specific benefits within each tier, leaving states with decisions to make regarding the services to include.

Medicaid and Children's Health Insurance Program (CHIP) Expansion
Medicaid and CHIP expansions provide a vehicle for delivering needed behavioral health services to many more children. It is estimated that the expansions in Medicaid and CHIP programs will increase their enrollment by 33% by 2019. Another benefit of Medicaid expansion under the ACA is that young adults exiting foster care will, starting in 2014, be automatically enrolled in Medicaid through age 25. Those young adults will have access to all necessary health and behavioral health services covered under the state plan.

Health Homes
Health homes are a Medicaid option available for states to design programs to better serve persons with chronic illnesses, serious mental health conditions, and/or addiction disorders. Health homes must provide for an individual's primary care and disability-specific service needs in one location, and must provide care management and coordination for all of the services needed by each person. The major goal is to provide more comprehensive, coordinated, and cost-effective care for individuals with disabilities than is generally provided when services are fragmented across multiple health providers and organizations. A letter from the Centers for Medicare and Medicaid Services to state Medicaid Directors states that: "The health home provision authorized by the ACA provides an opportunity to build a person-centered system of care [emphasis added] that achieves improved outcomes for beneficiaries and better services and value for state Medicaid programs" (Centers for Medicare and Medicaid Services [CMS], 2010). The federal government will provide 90% Federal Medical Assistance Percentages (FMAP) for two years for certain services including comprehensive care management, care coordination, health promotion, comprehensive transitional care from inpatient to other settings including appropriate follow-up care, individual and family support, referral to community and support services, and the use of health information technology to link services, as feasible and appropriate. A second goal is for states to experiment with innovative reimbursement methodologies for services, including case rates, inclusive salaries, and other mechanisms to save on the costs of care.

The ACA also delineates examples of providers that may qualify as health homes, such as physicians (including pediatricians, gynecologists, and obstetricians), clinical practices or clinical group practices, rural health clinics, community health centers, community mental health centers, home health agencies, or any other entity or provider that is determined appropriate by the state and approved by the Secretary of DHHS. Given the license to include other types of entities, states may want to designate additional providers, subject to CMS approval, such as agencies that offer behavioral health services. Designated providers must have systems in place to provide health home services and must satisfy certain qualification standards.

Health homes are designed to operate under a "whole-person approach" to care that addresses all of the health-related needs of the person and uses a "person-centered" planning process to identify and provide needed services and supports. Teams of health care professionals are also expected to coordinate care. Teams can be comprised of medical professionals, social workers, and mental health and substance use prevention and treatment providers.

1915(i) State Medicaid Plan Amendments
New 1915(i) State Medicaid Plan Amendments (SPAs) allow states a means to change their Medicaid plans to offer Home and Community-Based Services (HCBS) as an option for serving more individuals. Individuals with incomes up to 150% of the federal poverty level, and individuals with disabilities receiving up to 300% of the maximum Supplemental Security Income (SSI) payment (for 2010, 300% of SSI is equal to $2,022 per month) will qualify for services under this option. States may include several different populations under a single 1915(i) SPA. Examples of populations that can be served include: 1) adults with severe mental illness, 2) seniors at risk of placement in nursing homes, and 3) children with a serious emotional disturbance.

States may not waive the requirement to provide services statewide, nor can they limit the number of participants in that state who may receive the services if they meet the population definition. In order to limit costs, however, states may identify a very specific population in an SPA request. A state could, for example, focus an SPA only on children with serious emotional disorders who have had two or more psychiatric hospitalizations, rather than include all children with serious emotional disorders, thereby limiting the number of eligible individuals and the associated cost impact on the state. The SPA may also be phased in over a five-year period, allowing states time for providers to develop new, flexible, home and community-based services, and time to secure the financing necessary to implement the SPA. One benefit of 1915(i) SPAs is that children with incomes up to 150% of the poverty level no longer must meet the criteria for institutional care to receive "waiver-type" services like respite or wraparound facilitation (an intensive service planning and case management process). States using the 1915(i) SPA vehicle will neither bear the burden of renewing a short-term waiver application and will not be required to demonstrate "cost neutrality." 1915(i) SPAs will be approved by CMS for a five-year period and may be renewed.

Money Follows the Person
Enacted as part of the Deficit Reduction Act (DRA) of 2005, the Money Follows the Person (MFP) Rebalancing Demonstration is part of a comprehensive strategy within Medicaid to assist states, in collaboration with key stakeholders, to make widespread changes to their long-term care support systems. This initiative was included in the ACA and encourages states to reduce their reliance on institutional care while developing community-based, long-term care alternatives. The target population for this initiative includes children and youth with serious emotional disorders who have been in psychiatric hospitals or Psychiatric Residential Treatment Facilities (PRTFs).

Congress initially authorized up to $1.75 billion in federal funds for the MFP Demonstration program through 2011 to increase the use of home and community-based services and reduce the use of institutionally-based services. The funds are also intended to strengthen the ability of state Medicaid programs to ensure ongoing, high-quality home and community based care to individuals transitioning from institutions.

The ACA provides an opportunity for more states to participate in MFP in addition to those states that are already participating in the demonstration, and will help states continue to build and strengthen their demonstration programs. The ACA extended the MFP Demonstration Program through September 30, 2016, with an additional $2.25 billion appropriated over four years. Any unused portion of a state grant award made in 2016 would be available to the state until 2020. The ACA also expanded the definition of the eligible population for the demonstration to include individuals who reside in an institution for more than 90 consecutive days (down from 180 days in the original MFP demonstration). This change makes it possible for many children and youth who receive treatment in PRTFs to transition to the community with needed services and supports that otherwise are typically covered only in a Medicaid waiver (such as wraparound facilitation, respite, therapeutic mentoring, intensive in-home services, parent support partners, and others), with the added benefit of enhanced federal Medicaid match. A formula is used to determine the match that involves dividing the current FMAP in half and then adding that number to the current FMAP. A state currently at 50% would receive an enhanced match of 25%, which would take the entire match to 75% FMAP, with an upper limit of 90% FMAP. The enhanced federal match is available for 365 days after each individual's discharge from the institution.

Accountable Care Organizations
Accountable Care Organizations (ACOs) are structures created by the ACA that are responsible for providing, managing, and coordinating the total care of a defined population of 5,000 or more individuals. ACOs will be created by linking a group of providers within a single entity with shared governance, and with clinical and financial incentives to provide high-quality health services at a reduced cost. They may serve as a "neighborhood" medical and behavioral health care network that consists of multiple primary care practices, health homes, and specialty providers such as family-run organizations, residential treatment services, and hospitals.

The ACA calls for demonstration pilots of ACOs for Medicare enrollees and at least one pilot of a pediatric ACO, but does not specify how behavioral health (or more specifically children's behavioral health) should be incorporated. Current planning for ACOs appears to be primarily among large health care organizations and hospital systems. Many of these organizations are attempting to acquire specialty practices, such as nonprofit community mental health centers, to bring behavioral health expertise into their medical-surgical networks.

Most states are in the early stages of defining ACOs for their health systems and will have major decision-making authority about their design, business models, operational requirements, quality standards, and performance requirements. The National Committee for Quality Assurance (NCQA) will issue draft standards for ACOs, and CMS will issue regulations for ACOs, in part based on ongoing demonstrations.

Conclusion
Systems of care and health reform intersect in a number of important ways that have implications for the future implementation of both. The alignment of goals is clear in that both systems of care and health reform are designed to increase access to health care services, increase the array of available services and supports, improve the coordination of care, improve the quality and outcomes of care, improve the cost-effectiveness of services, and better invest resources. Systems of care have demonstrated that the availability of a broad range of treatment and support services for children's behavioral health is effective in preventing more serious problems and in mitigating overall health care system costs. Further, an individualized, wraparound approach to service planning and delivery has proven effective in many states and communities and has been the primary approach used to operationalize the system of care philosophy at the service delivery level, ensuring that children and their families receive optimal, appropriate, and cost-effective care. Care coordination and management at the individual and system levels have reduced fragmentation and resulted in better use of resources. Systems of care have demonstrated that there are, in fact, cost-reducing and cost-effective alternatives to serving children in hospitals, residential treatment centers, and other institutional settings, which is especially important during this time of fiscal challenges. These and other elements of the system of care approach may be new for insurance companies, but have been used effectively for many years by states and communities.

As planning and implementation activities for health reform gain momentum, it is essential to consider the implications for children, adolescents, and young adults with behavioral health challenges and their families and to determine how their needs will be addressed. The system of care approach has been embraced as the basis for a "paradigm shift" in the children's mental health field, as well as in other child-serving systems and even adult service systems. Given the close alignment of goals, the system of care approach provides a valuable framework and value base for health reform and defines critical elements of children's behavioral health services that should be incorporated into the implementation of the ACA. The ever-growing knowledge base and experience with systems of care can make a vital contribution to structuring ACA implementation to effectively provide children's behavioral health services in order to achieve shared goals. In turn, the ACA and health reform provide a strategic and important vehicle for sustaining and expanding systems of care and the gains made for children and youth with behavioral health challenges and their families in states, communities, tribes, and territories across the country.

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