New Funding Scheme Complicates Mental Health Provision

Lead child welfare advocates in California fear that the state’s social services “Realignment,” the conversion of former state programs into a block grant for counties, will stunt the already-sluggish attempt to expand and improve mental health screening and treatment of foster youth and other poor children.

Patrick Gardner
Patrick Gardner

“I think one of the challenges with a realigned system that is evolving, while there are some strengths to it, is that it creates an uneven level of care across jurisdictions,” said Patrick Gardner, founder and president of Young Minds Advocacy.  “And I’m not sure that’s how the federal entitlement with Medicaid was meant to be administered.”

Nearly all foster youth are eligible for screenings, physicals and treatment for disabilities under the federally mandated Early and Periodic Screening, Diagnostic and Treatment Program. It is guaranteed for Medicaid-eligible children per the Medicaid partnership between the federal government and the states.

The idea behind EPSDT is to identify and deal with potential health issues – which include mental health, preventative health, dental health, and other special health services – at an early age as to avoid possible lifelong impact.

Many states report high utilization rates of EPSDT; California’s rate is 88 percent. But national data suggests that the majority of that is screening; Just 32 percent of children screened through EPSDT receive any treatment services, according to a report from the National Academy for State Health Policy published in 2010.

Before California’s Realignment took shape in 2011, counties in the state would spend on EPSDT through a reimbursement plan. Each county would bill the state according to how much they spent on allowable services.

Alex Briscoe
Alex Briscoe

Forty-five percent of that cost would be provided by the state, with 50 percent provided by the federal government, and the remaining 5 percent being left up to the county. That scheme, said Alameda County Health Care Services Agency Director Alex Briscoe, heavily incentivized counties to increase spending on EPSDT services.

“Anyone could put up five cents and have it get matched with 45 cents from the state and 50 cents from the federal government,” Briscoe said. In Alameda, this was accomplished by using the county’s share of funds from a master lawsuit settlement between 46 states and big tobacco firms, commonly referred to as California’s First 5 initiative.

But even with an expansion-friendly model, he said, many counties did not do all that much.

“To administer this service line is no joke,” Briscoe said. “You get paid, then go through final cost settlement. If some kid fell off Medi-Cal while you served him, you gotta pay it back. The sophistication to run EPSDT cannot be overstated, many counties don’t have the [necessary] resources or providers.”

The discussion of EPSDT has shifted from expansion to simply holding the line in the wake of Realignment. Now, each county receives an up-front allocation of money from the state, tied in with a federal share. Any additional or expansive funding the county spends on EPSDT is done from county coffers.

The total state allocation did increase from $564 million in 2012 to about $584 million in 2013. Even then, both Briscoe and Los Angeles County Department of Mental Health Director Marvin Southard said their agencies overspent the EPSDT allocations; Alameda had to put in $2 million to fund services, and Los Angeles spent $10 million.

“We’ve used…other sources to match the cost we spend over our allocation,” said Southard, director of the LA’s Department of Mental Health. “Our overall budget is about $2 billion, and a $10 million shortfall is something we can make up for.”

“We have enough other sources of revenue that we can cover these [EPSDT services] obligations for a short period of time while we wait for the state to work out its process,” Briscoe said. “If you’re a $20 million health department, how do you maintain the same levels?” Briscoe asked, “How do you pay your bills?”

Carol Sloan, an information officer at the California Department of Health Care Services, in a response to questions e-mailed from The Chronicle of Social Change, said that the state “has not heard concerns from counties that they are not able to provide the specialty mental health services to children who are enrolled in the Medi-Cal program and meet medical necessity criteria.”

According to Gardner of Young Minds Advocacy, the state made quiet assurances to counties that there would be different ways to make their budget whole if the counties overspent their EPSDT allocations.

The state has not followed through, Gardner said, because officials assumed that the state could reimburse counties through unspent EPSDT funds from other counties.

But the reality is that the state does not have authority to re-task those dollars once they go out.

One possible solution, Gardner added, would be to support overspending counties by using funds from the state’s “Growth Account,” which includes certain revenue from several administrative fees and taxes.

Sloan said in her email that the department is “currently considering, with stakeholder input, the methodology that will be used to determine the allocation of growth funds. First priority for growth are the federal entitlement programs.”

Victor Valle is a journalism intern with Fostering Media Connections.

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