As deadlines near for behavioral and mental health providers to transition to a fee-for-service model, some providers have concerns over whether the change will limit services.
New Jersey is one of the last states to move to a fee-for-service system, where providers can charge the state only for specific services. State legislators say the new model will free up money to expand consumer access to services. But providers worry the new model will limit what they can offer.
“We get community grants to provide a lot of our services and extra programs, but we may not be able to do those types of projects in the future,” said Christine Miller, director of family services at Mental Health Association in Atlantic County.
The state has been in the process for several years to transform how it pays for behavioral and mental health services. The fee-for-service model reimburses health providers, who are gradually transitioning to the system, for specific services based on Medicaid rates.
Department of Services acting Commissioner Elizabeth Connolly reported to the state Assembly Budget Committee in May the already transitioned 16 mental health providers and most addiction treatment providers “have adjusted well and are appreciating the budget flexibility” with the system.
To ease the statewide transition for all providers, which officially began last summer, Gov. Chris Christie appropriated $127 million in the state’s fiscal year 2017 budget.
But some mental health advocates said they anticipate funding shortages at local organizations, which would affect consumers using counseling, case management, group support and other services for mental illnesses, substance use disorders or both.
“Some of the fee-for-service rates are inadequate, forcing many providers to determine if they need to eliminate or significantly reduce any of their services,” said Debra Wentz, president and CEO of the New Jersey Association of Mental Health and Addiction Agencies, which includes 160 organizations.
Miller said the Atlantic County organization offers several programs and services that would be at risk of disappearing under a fee-for-service system. That remains a major concern, she said, as the mental health center is many times the first point of contact for local residents.
Christie signed a bill last month to establish two oversight boards and an independent evaluation contractor to monitor and assess the state’s transition to the fee-for-service model, a move applauded by advocates on both sides of the issue.
Department of Human Services experts told providers earlier this year the state has significantly raised reimbursement rates for certain services, including medication treatments for Medicaid patients.
But opposing advocates said it still leaves others, such as education and outreach efforts, without adequate funding.
Wentz said the oversight bill signing was “a positive step, yet only half the solution,” and called for the state legislature to pass the Community Mental Health Safety Net Act, which proposes $90 million in safety-net funding to help providers during the first year of the fee-for-service system.
Despite any positive progress with the transition, experts say any changes to Medicaid funding at the federal level will complicate New Jersey’s system.
“The Medicaid expansion and fee-for-service reimbursement in New Jersey rely heavily on the enhanced federal match for Medicaid,” Wentz said. “If this funding is lost or significantly reduced, the current system of care would be decimated.”