Behavioral Health Services—Interagency Coordination of Services (February 2000, Report No. 00-2)

SUMMARY

The Office of the Auditor General has conducted a performance audit of the coordination and provision of behavioral health services among selected state agencies, in response to an October 6, 1998, resolution of the Joint Legislative Audit Committee. The audit was conducted under the authority vested in the Auditor General by A.R.S. §41-1279. A separate review of the Department of Health Services—Division of Behavioral Health Services (BHS) was issued in July 1999 (Report No. 99-12).

Although BHS is responsible for providing publicly funded behavioral health services in Arizona, many individuals with behavioral health needs first encounter another public agency, such as a court or the Department of Economic Security. The agencies often refer these individuals to BHS for services, but are not always able to access all of the care agency officials believe is needed for their clients. Previous studies by legislative committees and private organizations have recommended ways to improve interagency communication and reduce duplicated efforts. In this audit, in-depth case studies were conducted to explore the reasons some individuals do not receive the services requested by the referring agencies. These case studies, along with other audit methods such as interviews and reviews of documentation, uncovered common themes that help to explain interagency disagreements and suggest additional recommendations for ensuring that other agencies’ referred clients receive appropriate services.

Managed Care Focus, and Structure
That Divides Responsibility, Leads
to Interagency Disagreements
(See pages 11 through 21)

Arizona’s behavioral health system has three characteristics that contribute to interagency disagreements.

• First, its managed care focus provides some incentive for limiting services in order to minimize costs. The Regional Behavioral Health Authorities (RBHAs) that contract with BHS to administer the delivery of behavioral health services may incur financial losses if they spend more than the fixed sum they receive in advance. As a result, RBHAs monitor service utilization, require authorization for service beyond predetermined limits, and deny services when they are not medically necessary.

• Second, Medicaid rules require RBHAs to provide only services that are "medically necessary," a standard with an appropriately broad definition that provides ample discretion for allowing or denying services. According to Arizona’s definition of medical necessity, services must be expected to benefit the client’s mental or physical health, and should be delivered in the least restrictive setting proven or predicted to be effective in meeting the client’s behavioral health needs in order to conserve costs.

• Third, the fragmented structure of service provision between agencies allows cost-shifting between agencies. Other agencies can sometimes purchase behavioral health services for their clients, making it difficult to determine which agency should pay for such services for a shared client. Distinctions between agency roles are unclear in some cases.

These system characteristics contributed to interagency disagreements regarding two cases auditors examined, Todd and Irene. Todd, a 15-year-old boy referred to BHS by Child Protective Services (CPS), was receiving services in a residential treatment center where staff supervised him 24 hours a day, but these services were terminated by a RBHA psychiatrist who said they were not medically necessary. Although Todd’s court-appointed psychiatrist and CPS caseworker believed he needed to stay in the supervised setting, where he did well, the RBHA psychiatrist thought his good progress in the supervised setting indicated his behavioral problems might be caused by family problems at home. In Todd’s case, professionals disagreed about the necessity for providing services in a restrictive live-in setting.

Cost-shifting appeared to be a factor in Irene’s situation. Irene, a client of DES’ Division of Developmental Disabilities (DDD), has cerebral palsy, which does not create behavioral health problems. However, RBHA staff attempted to shift responsibility for Irene’s services to DDD, first by alleging that her behavioral health problems were caused by mental retardation, and later, when they learned she did not have mental retardation, by claiming that her cerebral palsy explained her behavior.

To alleviate these types of disputes, responsibility for some clients such as some DDD clients could be transferred away from the RBHAs. In addition, agencies could make some procedural changes and BHS could improve its oversight of the RBHAs. Specifically:

• DDD could assume responsibility for some of its own clients’ behavioral health services. This would be comparatively easy because DDD already has the needed financial and information systems in place for clients enrolled in the Arizona Long Term Care System (ALTCS).

• BHS and other agencies could reduce medical necessity disputes by working with other agencies to develop methods for routinely reviewing and synthesizing all agencies’ assessment information, and ensuring that RBHA staff responsible for performing assessments are adequately qualified.

• Finally, to ensure that clients receive adequate and appropriate care, BHS should continue to improve its oversight of RBHAs to help ensure they do not inappropriately limit or deny services.

Confusion Exists
Regarding Medicaid Coverage
(See pages 23 through 32 )

Confusion over which services Medicaid will cover explains why some clients may be denied services. Substance abuse coverage, in particular, sometimes may be misunderstood by RBHA officials, leading to inappropriate service denial. Medicaid does pay for medically necessary substance abuse services, regardless of whether the client has another behavioral health problem in addition to the substance abuse problem. In addition, Medicaid-eligible clients who have other behavioral health problems do not need to be free of substance abuse problems before they can receive medically necessary treatment. Finally, the full array of behavioral health services, including respite-like care and residential detoxification (not including room and board), can be paid for by Medicaid, as long as the services are medically necessary and provided in a Medicaid-compatible setting. In spite of this, a RBHA denied services to Maria, a pregnant teenager currently in the Child Protective Services (CPS) system. She was seeking residential drug treatment, but was denied because she did not have another behavioral health diagnosis. Similarly, Rachel is a seriously mentally ill woman currently on probation. She is receiving methadone for her heroin addiction, but has been told she must get off methadone before she can receive any other substance abuse services to address her problems with alcohol and other substances.

In addition to RBHA officials and providers being confused about Medicaid coverage for services, the courts and Juvenile Corrections may not always know whether the person they are referring for services is enrolled in Medicaid. This can result in treatment delays or denials, since the behavioral health care system has limited monies to treat people who are not entitled to Medicaid services.

BHS has initiated efforts to ensure that clients with substance abuse as well as other mental health problems receive treatment. Nonetheless, the Division should take further actions to diminish confusion and ensure that clients receive Medicaid-covered services. Specifically, BHS policies governing the services provided by RBHAs should be revised to clearly specify all the services that are covered by Medicaid. In addition, BHS should approach the Arizona Health Care Cost Containment System (AHCCCS) about changing the capitation structure because it appears to contribute to some confusion over whether Medicaid clients can receive substance abuse treatment. Currently, a different capitation rate category exists for "general mental health and substance abuse," which may inappropriately imply that children and adults with serious mental illness are not eligible to receive substance abuse services.

To address confusion over enrollment, the courts and the Department of Juvenile Corrections should adopt methods of determining whether probationers or parolees are eligible for and enrolled in Medicaid and KidsCare. These determinations should be made before making referrals to the RBHAs.

Changes Could Enhance
Ability to Secure
Specialized Services
(See pages 33 through 38)

Even when there are no disagreements between agencies, auditors’ case studies showed that some referred clients may be unable to access needed services because the services are simply unavailable. For example, Kristine, a young woman from a rural area who has a developmental disability, needed a residential placement upon her discharge from the Arizona State Hospital, but the placements available near her home could not handle her extensive needs. Although such problems appear most prevalent in rural areas, some clients’ needs are difficult to meet even in urban areas. For instance, Jake, another DDD client, was placed in a partial care facility but his I.Q. score was too low for him to benefit from that facility’s services. Other clients may be rejected by providers due to disruptive behaviors or other issues. For example, Joseph is a homeless man who is currently on probation and who has a serious mental illness. He apparently was rejected by a provider for treatment because of his past felony drunk-driving conviction.

While gaps in service availability will likely continue, particularly for sex offenders, AHCCCS and BHS could make some changes that would help to increase service availability.

• First, BHS can continue its efforts to encourage RBHAs to contract with providers for difficult-to-find services by informing them that provider contract rates are flexible, allowing the RBHAs to pay higher rates when necessary.

• Second, BHS could ensure that at least some of the RBHAs’ providers accept difficult or disruptive clients as a condition of their contracts, in exchange for higher provider fees or other incentives.

• Finally, AHCCCS could request approval from the Health Care Financing Administration to let RBHAs contract with certified substance abuse counselors and master’s-level individual providers, such as social workers and therapists, certified through the State’s Board of Behavioral Health Examiners. Currently, RBHAs can contract only with physicians, nurse practitioners, physician assistants, psychologists, and licensed provider facilities.

Expanding BHS’ Role in
Serving Juvenile Offenders
Could Save the State Money
(See pages 39 through 42 )

State dollars could be saved if services for Medicaid-eligible juveniles were provided through BHS and the RBHAs, instead of being provided by the juvenile justice system. Currently, the Department of Juvenile Corrections and the juvenile and adult probation systems pay out of their own state-funded dollars to treat juvenile sex offenders who are on parole or probation. According to Juvenile Corrections and the courts, these agencies use their own funding rather than referring these clients to the behavioral health system, since the RBHAs have refused to provide such services in the past. In addition, Juvenile Corrections currently pays for residential treatment for juveniles who are removed from correctional facilities to receive behavioral health treatment. In both cases, such services for Medicaid-enrolled individuals could be paid for by the behavioral health system with Medicaid dollars, which are provided largely by the federal government. In order to conserve state dollars and effectively leverage federal Medicaid dollars, the Division should ensure that the RBHAs are made responsible for providing medically necessary behavioral health care to juvenile sex offenders and Medicaid-eligible prisoners removed from prison for treatment.

Other Pertinent Information
(See pages 43 through 54)

During the audit, other pertinent information was collected regarding previous efforts undertaken to improve service provision for people involved with the behavioral health system and other state agencies. Since 1986, numerous studies and other efforts have been initiated to improve coordination of these services. Studies by legislative committees and private foundations have identified problems with fragmentation, redundancy, and inappropriate service delivery. To resolve these problems, suggested solutions have ranged from an overall redesign of the way services are delivered to more specific procedural improvements, such as changing the amount and type of information collected from shared clients. Specifically, the groups have recommended:

• Streamlining the service delivery system by using a centralized screening process, creating local family assistance service centers, and integrating case management by assigning a single case manager to serve interagency clients;

• Providing a full continuum of specialized services for specific populations;

• Improving communication among agencies by establishing local councils, an interagency cabinet, and multi-agency teams;

• Improving information sharing among agencies by creating a central information system, a common database or data warehouse, developing data-sharing links, and avoiding collecting redundant information;

• Providing more timely, complete, and accurate assessments by incorporating a developmental and long-term view, adopting similar guidelines, and using a common screening process; and

• Using funding more efficiently, by exploring ways to make funding more flexible, expanding an existing joint agreement for the purchase of provider services, establishing a mechanism to ensure sufficient funding, and maximizing the use of federal funds.

Read full report in Acrobat PDF format