Conference of Allegheny Providers

______

White Paper

Supporting and Sustaining the System of Care

January 2017

Introduction:

People with behavioral health treatment and support needs as well as those with intellectual disabilities have, most certainly, experienced the ravages of stigma and discrimination. It has been a seemingly never ending struggle for them to be treated fairly, respectfully and with equanimity. Likewise, and consistent with the experience of the people with behavioral health and IDD needs, because rate adjustments are seldom and not scheduled with any regularity, the providers experience the struggle of almost constantly needing to seek funding and/or reimbursement rates that are at least consistent with the rate of inflation and the cost of doing business. Inflation, regulatory burden and marketplace fluctuations that drive salary demands and recruitment of staff at all levels, including psychiatry have gone unaddressed but have had reverberations within the provider community placing many providers on the margin of bankruptcy. This paper describes the position of the Conference of Allegheny Providers (CAP) regarding an enduring solution to assure the health of the provider system and therefore, those it serves and the community.

Statement of the Problem:

In the past ten (10) years, the cost of doing business has increased for all industries in the United States. Indeed, the United States Bureau of Labor Statistics reports that with exception to 2009, the Consumer Price Index (CPI) has consistently risen every year for the past 10 for an average of 1.95% per year. As service providers, we agree the cost of doing business has, without doubt, increased. We’ve seen typical increased costs in rents, food, energy, goods, employee benefits and services that we purchase from our vendors and retailers. Employee healthcare costs alone have skyrocketed from year to year with employees shouldering more of the burden of the cost through increases in their contributions and

1 deductibles. It is not unusual for providers to lament that some of their best staff are leaving the industry to go to a supermarket chain that pays more and offers more benefits. Ironically, some of the best clinicians leave the clinical setting to work for the local Medicaid MCO as salaries and benefits are superior to what providers can offer!

Despite all of the challenges in the financial management of provider agencies, CAP believes Allegheny County is uncommon in having a wealth of exemplary providers of high quality services who highly value and are open to innovation. However, rather than invest and support existing services to incorporate needed or desired innovations and best practices, the trend seems to be to invest in new and discreet services. Early in Health Choices, there was a greater sense that Allegheny County providers were welcomed to participate in discussion of service development and innovations using “Reinvestment Dollars”. While we realize that, over time, the Commonwealth has made changes in the acceptable use of Reinvestment Funds, the inability to participate in the discussion and decision making is not only a loss of that aspect of collaboration, but also the opportunity to build upon and bolster existing services while still incorporating services to new populations and service needs.

The regulatory environment has become suffocating with unfunded mandates and significant resources being redeployed to simply manage regulations at every level of care. A single service can be monitored by multiple entities each giving their own directives which are sometimes in conflict with each other. It is typical for an Allegheny County provider to have licensing or monitoring visits by: the Commonwealth (licensing), Allegheny County, Medicaid MCO (Value and/or CCBH) Quality Programs, Medicaid MCO Fraud Waste and Abuse and Allegheny County Fiscal Audits. All of the aforementioned audits/inspections are done independent of each other. Many providers have had to create specialized positions dedicated to oversee the regulatory/audit processes. Directing valuable resources to such positions detracts from the clinical mission of the organization, meaning clinical staff may be asked to perform more administrative functions, staff may not be compensated at market rates, and difficult decisions may be made to eliminate positions and/or services.

The impending implementation of the Chapter 6100 regulations for Home and Community Based Habilitation as issued by the Office of Developmental Programs (ODP), are a glaring example of the focus on regulation without accommodation of the cost to providers. While many providers agree with the values extoled in the regulations, specifically the focus on an increased effort toward community integration, ODP is silent on the specifics of how the heightened cost of compliance with these regulations will be met. Meanwhile, many providers have been forced to seek remedy for perennial inadequate rates via the legal action.

The Affordable Care Act (ACA) has emphasized the importance of psychiatry in a world of integrated care, but we witness a shortage of psychiatrists and those remaining demand work conditions and

2 compensation that are markedly increased with astronomical fees being paid. Non-physician staff most often bears the brunt of cost containment efforts with salary stagnation or marginal increases. Again, we see the limiting nature of the regulatory climate which severely restricts service options that are less expensive but of equal quality. For example, physician duties that are stipulated but not meaningful, ratios and use of alternative prescribers. Consequently, recruiting becomes difficult and despite our best efforts, we believe the quality of care delivered is at risk.

For years, value-based contracting has been discussed as an inevitable shift in funding policy. Providers are not opposed to reasonable metrics and data expectations that would be used to determine what constitutes value. However, our experience as providers tells us that data requirements are sometimes imposed capriciously without commitment that the data will actually be used or even reviewed. As one of our CAP colleagues has said; “We have lots of data, but no information.” Again, the notion that every mandate passed to providers comes with a cost should not be overlooked and only data that will actually be used, should be collected. Furthermore, efforts should be made to eliminate redundancy, superfluous data collection and match other data standards, such as MACRA or Meaningful Use requirements. We understand that the role of Evidence Based Practices (EBPs) are an important component for guiding and judging the value of a service, the incorporation of which must be considered an investment in the future. However, how can a provider underwrite such an investment with so many other competing demands for capital? Foundations must be considered as possible “investors”, however, the provider will still likely need to bring to the table some cash or effort that translates to lost revenue/productivity.

In Pennsylvania, Medicaid Managed Care Organizations (MCOs) have received line item budget increases largely from year to year, but there seems to be no mandate that such increases are passed along to fortify and adequately compensate the delivery of services. Nor are these increases distributed equitably across the state to each MCO. While mechanisms exist for providers to formulate and submit individual and group rate increases, the process is cumbersome and frustrating and not always awarded. In the past eleven (11) years, Allegheny County providers have received rate increase five (5) times for outpatient treatment programs, but it should be noted that these increases have been for select services types within outpatient treatment and not across the board increases. It should be noted that rates were decreased once as well. Blended Service Coordination; another high volume service, has had three (3) rate changes in the past (11) years all of which were associated with the regulatory change disallowing travel as a billable service. The rate changes were two (2) increases and one (1) rate decrease. Providers have consistently reported that the current rate assigned since 2014 is inadequate, however, there is no commitment to review or increase the rate.

Proposal:

By statute, Pennsylvania holds the capacity to guarantee cost of living adjustments for line items or services that are felt to be critical. Ideally, CAP would advocate that the Commonwealth take a stand in

3 advocating for a strong and high quality network of providers and services as an integral part of the health and safety of the community. Action should be taken to write and pass legislation that would assure that the cost of living and doing business are addressed via funds to be directed to providers on an annual basis that is consistent with the CPI (inclusive of food and energy). County operations and MCO’s should be required to first, support the delivery of services before their own administrative operations are supported and expanded. Off-setting benefits to the field of human services brought about by the provider community should be taken into account with the system of care sharing in the savings and potentially offsetting CPI driven increases. For example, correctional facilities that are able to downsize or close because of the transfer or release of behavioral health consumers to community providers should fund services via those savings and/or establish a system in which specialized services or created or simply the “money follows the patient”. Utilization of the CPI would allow the providers a benchmark through which they will be able to plan budgets, compensate staff and make other operational decisions while providing an even playing field within the community. Providers would be in a much enhanced position to respond to changes in care delivery and in incorporating best practices; staff talent, knowing that they are valued and can expect a living wage would be less likely to leave the field, but rather may invest is furthering their career within behavioral health.

Alternatively, CAP recommends that key services are formally reviewed by the local authority/MCO on an annual basis to assure that the rate of reimbursement is adequate for inflation and/or mandates are funded and do not represent an unfunded mandate, such as the implementation of new assessments, etc.

CAP commits to assist in the furtherance of this model for review and implementation in the interest of services that are high quality, accessible and cultivate a workforce that is rewarded for excellence.