Millions Could Lose Behavioral Health Access via Medicaid After PHE Winds Down

Millions more vulnerable Americans have access to behavioral health services because of a temporary federal edict that helped people get and keep Medicaid coverage.

But the days of that edict — the public health emergency — are numbered, putting millions at risk of losing Medicaid and access to health care services.

A dramatic administrative change within a complicated program such as Medicaid could have wide-ranging impacts on people most in need of behavioral health services, research shows and some industry leaders tell Behavioral Health Business

Medicaid alone accounted for about 30% of all spending on mental health in the U.S. in 2020, according to a federal report.

In January 2020, the federal government issued a public health emergency declaration (PHE) in response to the coronavirus pandemic. That created the legal grounds for many federal agencies to operate differently to better respond to the pandemic. It also created a shot clock of sorts for the pandemic.

Congress passed the Families First Coronavirus Response Act (FFCRA) in March 2020. Among other things, it prohibited states from disenrolling people from Medicaid during the PHE lest states lose a Medicaid funding increase; states could then begin a process to get back to normal eligibility and enrollment processes within 12 months of the end of the PHE.

U.S. Health and Human Services (HHS) Secretary Xavier Bacerra renewed the PHE for another 90 days, effective April 16, setting the expiration date for the loosened regulatory framework in July.

The Centers for Medicare & Medicaid Services, which oversees its titular government-backed health plans, has released several rounds of documents and tools meant to help states unwind their Medicaid programs from the PHE.

Federal PHEs last 90 days. HHS has indicated that it would give 60 days’ notice that it would terminate the PHE. That would put the 30-day mark at May 16.

Still, the sometimes cryptic nature of state bureaucracies may inevitably lose people, Beth Keeney, CEO and president of Jeffersonville, Indiana-based Lifespring Health Systems, said in an interview.

“Anytime you disrupt an established norm or process as it relates to insurance, people are going to lose coverage,” Keeney said. “The last thing that we want is for somebody to walk into an appointment with a specialist or go to pick up a medication and then find out they’ve lost coverage.”

As may be indicated by their eligibility for a safety net health plan, Medicaid enrollees often have several social determinants of health that they have to grapple with just to get care. These can include financial issues, a lack of transportation, inflexible work schedules or family care obligations. Adding the burden of reapplying for Medicaid benefits could be more substantial than for others.

“Your health care looks very different when you’ve got good insurance and lots of opportunity and you can leave in the middle of the day to go to a doctor’s appointment,” Keeney said. “It’s very different when you’re an hourly wage earner, who is dependent on being at work all of the time. When are you going to find time to get your paperwork together for Medicaid?”

Keeney also fears a backup of Medicaid redeterminations that were on hold for two years within state agencies that could gum up the works for years to come, potentially leaving patients in a lurch.

Lifespring Health Systems, a nonprofit certified behavioral health center and federal-qualified health center that serves 11 counties in Southern Indiana, is hoping for and will rely on clear direction from state regulators to help with a smooth transition. It is also taking on the administrative burden of helping Medicaid enrollees.

“What makes things challenging is we don’t really know what the new landscape will look like,” Keeney said.

Keeney didn’t know how many of her organization’s patients might be at risk of losing coverage or who may have to face redetermination but said the organization is highly dependent on Medicaid reimbursement.

The largest share of Lifespring Health Systems’ patients, about 40%, are on Medicaid while another 15% are uninsured. About 20% have commercial insurance while 25% are on Medicare, the federal health plan for seniors.

Unprecedented Medicaid enrollment during pandemic

At a national level, 15.8 million could lose Medicaid coverage if the PHE expires after the third quarter of 2022, according to an analysis released in March by the nonprofit research organization the Urban Institute.

“Medicaid enrollment has risen to unprecedented levels since the start of the COVID-19 pandemic,” the analysis states, adding that the number of people on Medicaid and, thus, the number of pending eligibility determinations and redeterminations, are also unprecedented. “Further, some stakeholders worry the rate at which enrollees are inappropriately disenrolled will be higher after the PHE than was typical before the pandemic. If this happens, the number of people losing coverage could be higher than we project.”

A more recent analysis by the Kaiser Family Foundation finds that 5.3 million and 14.2 million people could lose Medicaid coverage at the end of the PHE. It further projects that total Medicaid enrollment could have reached 110.3 million by the end of the current federal fiscal year, Sept. 30, 2022, if the PHE and continuous enrollment requirements remained in place.

The latest CMS data shows 87.9 million Americans were enrolled in Medicaid and its companion program, the Children’s Health Insurance Program (CHIP). Since February 2020, enrollment in Medicaid and CHIP has increased by 16.3 million, or 23%, with 15.9 million being adults, according to the latest data.

“I’m very concerned about it,” Justin Hartman, chief revenue officer for Franklin, Tennessee-based addiction treatment provider Landmark Recovery, told BHB about the resumption of Medicaid redeterminations. He also worries that people who lose Medicaid coverage would lose access to health benefits altogether.”

For most states, individuals whose adjusted income is $18,750 or less a year qualify for Medicaid.

“What $20,000-a-year job is providing full-time benefits for individuals out there? It doesn’t exist,” Hartman said. He also said it’s dubious to assume that people at this income level are able to afford an individual health insurance premium.”

Paying premiums for individual health insurance plans that meet the specifications for federal payment assistance could become harder. In March 2021, Congress passed enhanced premium tax credits for individual health plans purchased on health insurance plan exchanges via the American Rescue Plan. However, those enhanced credits expire at the end of 2022. Democrats included extensions of these credits in President Joe Biden’s signature legislative initiative called the Build Back Better Act. The legislation passed out of the U.S. House of Representatives in November but has since stalled in the Senate.

About half of the roughly 400 beds that Landmark Recovery presently operates are dedicated to serving people with Medicaid. By the end of April, the company could have another 160 Medicaid beds come online, with Medicaid making about 75% of the company’s business, Hartman said.

Landmark Recovery’s approach to growth is to build facilities that cater to people who pay out-of-pocket or use commercial health insurance to access addiction treatment services. Then, the company uses the proceeds from that facility to establish another facility that caters to Medicaid enrollees, whose plans reimburse at much lower rates than commercial insurance.

“Everybody knows Medicaid rates are pretty terrible rates, but Medicaid rates are better than not getting reimbursed whatsoever,” Hartman said, adding that the company also offers charity care. “We can service all facets of the population — those with insurance, those on Medicaid, those who self-pay.”

Even if there were a cataclysmic decrease in the number of people who have coverage via Medicaid, Hartman believes that Landmark Recovery wouldn’t be impacted because of the massive demand for addiction treatment and a major dearth of addiction treatment providers that accept Medicaid.

“There are not enough beds in the United States to serve the underprivileged. No exception,” Hartman said. “The worry is for every patient that doesn’t have access to critical care through Medicaid is a life potentially lost.”