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With suicide now the second leading cause of death among children, adolescents, and young adults (aged 15-24 years old) in the United States, it is apparent that the COVID-19 pandemic has not only exacerbated rates of depression and anxiety, but also illuminated the fractures in our youth behavioral health system. In response, states are focusing on ways to advance policies that aim to expand coverage for youth mental health services.
Individuals suffering from mental health conditions or substance use disorders (SUDs) face many challenges accessing care and often do not seek treatment. Even before the COVID-19 pandemic, Centers for Disease Control and Prevention (CDC) data found 1 in 5 children were diagnosed with a mental health disorder, yet only 20% of those children received appropriate care.
In the past two years, over 100 laws in at least 38 states have been enacted with a focus on supporting schools to act as a primary access point for youth behavioral health care. At least half of all states are applying the co-location approach, where both types of care are delivered at the same site, to better integrate physical and behavioral health care. According to the Kaiser Family Foundation report, more than four-fifths of states launched initiatives related to screening for behavioral health needs, an effective strategy for Medicaid to connect those with behavioral health needs to the appropriate services.
Medicaid plays a pivotal role as the largest payer of behavioral health services, including both mental health and SUD services. Efforts to address these issues have been a focus in Medicaid at the federal level, including in the 2018 SUPPORT Act and more recently in the 2021 American Rescue Plan Act (ARPA), which provided enhanced Medicaid funding for certain behavioral health providers and mobile crisis services. The Center for Medicare & Medicaid Services (CMS) under the Biden Administration has highlighted behavioral health policy and investments as a federal Medicaid priority.
During National Mental Health Awareness Month, the Department of Health and Human Services (HHS) called for states to prioritize and maximize efforts to strengthen youth mental health and detailed HHS’ plans to support state-wide coordination across federal funding streams to expand youth mental health services. This blog highlights California’s approach and spotlights other states’ efforts to bolster the children’s behavioral health system.
State Strategies to Strengthen the Youth Behavioral Health System
There has been significant work underway in California for years to address youth behavioral health services, but up until recently it did not include substantial investments to redesign the mental health system for youth, and families. California exemplifies ways to leverage policy levers and make significant state investments to cultivate and strengthen the youth behavioral health system.
In 2021, Californiaenacted groundbreaking legislation by making significant investments to reimagine its youth behavioral health system. The Children and Youth Behavioral Health Initiative is a $4.4B investment intended to enhance, expand, and redesign the systems that support behavioral health for youth, children and families. This initiative, administered by the California Health and Human Services Agency and its departments, aims to evolve California’s behavioral health system in which all children (25 years of age and younger) regardless of payer, are served for new and existing behavioral health needs.
This multi-year strategy seeks to enhance and redesign the current behavioral health system by integrating behavioral health into physical health, education, and other areas that support children and families. With a stronger focus on prevention and early intervention, the Initiative will distribute school-linked partnership, capacity, and infrastructure grants to support implementation of the initiative for behavioral health services in schools and school-linked settings.
The Initiative will also provide incentive payments to qualifying Medi-Cal (Medicaid) managed care plans to establish interventions that expand access to preventive, early intervention, and behavioral health services for children in publicly funded childcare and preschool, as well as pre-K-12 children in public schools. Also included are efforts to submit a State Plan Amendment to incorporate the dyadic services benefit under Medi-Cal, whereby screening for behavioral health problems, interpersonal safety, tobacco and substance misuse and social determinants of health are provided for the child and caregiver or parent during medical visits. A key piece of the Initiative stipulates that every component outlined in the Children and Youth Behavioral Health Initiative Act may only be implemented if the Department of Health Care Services confirms that federal financial participation under the Medi-Cal program will not be jeopardized. Indeed, the intricate design and implementation of the Initiative would not be possible without partnerships from other State agencies, education stakeholders, subject matter experts, and community partners to deliveressential services from prevention to treatment and recovery.
California’s commitment to address youth behavioral health services at a statewide level illustrates the various efforts emerging across the country. California is one state that is advancing multi-faceted strategies through legislation and Medicaid, but other states have used various Medicaid authorities including 1115 demonstrations, State Plan Amendments (SPAs), and 1915(c) Waivers to remove accessibility roadblocks and enhance youth behavioral health services. States have taken a variety of approaches in their commitments to bolster the system of care around the country that include:
- New York amended its state plan amendment to expand the EPSDT benefit to enable a greater focus on prevention, early intervention, and expansion of behavioral health services.
- New Jersey amended its state plan to make Mobile Response and Stabilization Services (MRSS) for youth up to age 21 reimbursable under Medicaid’s EPSDT benefit.
- Ohio RISE (Resilience through Integrated Systems and Excellence) for youth with complex behavioral health needs was enacted through a Medicaid 1915c waiver. Through this program, a single managed care organization provides new, targeted behavioral health services and intensive care coordination
- Washington State passed the Behavioral Health Emergency Services legislation E2SHB 1688 (Chap. 263, Laws of 2022) to ensure coverage for all emergency behavioral health services (adult and children) to protect consumers from charges for out-of-network health care services by addressing coverage of emergency BH services.
States can combine the power of their policy levers along with the cascade of forthcoming federal dollars to strengthen the youth mental health system of care. The Bipartisan Safer Communities legislation includes significant funding for mental health screening, among other critical services. The Bipartisan legislation seeks to foster the tremendous opportunity for states and schools to increase behavioral health capacity for students and mental health professionals, evidenced by the School Based Mental Health Services (SBMHS) Grant Program, the School Based Mental Health Service Professionals Demonstration Grant, and several other investments for supportive services in schools.
Ensuring equitable access to a plethora of high-quality behavioral health services for youth requires the individual and collective commitment of states. The children’s mental health crisis has reached unprecedented levels and the opportunity for states to lead by example has arrived. Fortunately, states have significant tools to address the youth mental health crisis through the design and deployment of innovative policies and mission-aligned collaborations. Federal funds and state policy levers will help advance a robust and accessible children’s behavioral health system. As our communities work to rebuild in a post-pandemic world, states have the unique opportunity to provide today’s youth with compassion, essential behavioral health resources, and integrated systems to meet them where they are.
For additional information, please read our Bolstering the Youth Behavioral Health System: Innovative State Policies to Address Access & Parity brief, which explores state policy levers to advance access and availability of behavioral health services (encompassing mental health and substance use disorders) for youth.
With 1 in 5 children experiencing a mental health condition every year and only 54 percent of non-institutionalized youth enrolled in Medicaid or CHIP receiving mental health treatment, the HMA team of Caitlin Thomas-Henkel, Uma Ahluwalia, Devon Schechingerand Debbi Witham have authored the first in a series of briefs focused on enhancing the youth behavioral health system. This brief, Bolstering the Youth Behavioral Health System: Innovative State Policies to Address Access & Parity, explores state policy levers to advance access and availability of behavioral health services (encompassing mental health and substance use disorders) for youth.
On August 7, 2022, the Senate passed the Inflation Reduction Act of 2022 (the IRA). The House approved the bill on August 12, and President Biden is expected to sign the IRA into law in the coming weeks.
The IRA addresses a range of policy topics across health care climate, energy, and taxation. Regarding health care, the IRA makes structural changes to the Medicare Part D prescription drug benefit and provides new authority for the Medicare program to address the pricing of prescription drugs in the Part B and Part D programs. The measure also extends the temporary enhanced assistance for health coverage purchased from Marketplaces, which was first approved in the American Rescue Plan Act (ARPA). In addition, the IRA updates vaccine coverage policies in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).
While the IRA provides a critical framework for the structural changes to the nation’s largest public health insurance programs, the U.S. Department of Health and Human Services will be responsible for building out the policy and operational components necessary to support implementation.
Notably, the Centers for Medicare and Medicaid Services (CMS) will lead implementation of the IRA’s Medicare and Marketplace provisions. The changes to the Part D benefit and the development of entirely new processes and policies to support the IRA’s drug pricing provisions require significant resources and consideration of direct as well as indirect impacts for the health care market. The agency can use a variety of regulatory tools to support implementation, including issuing standalone Requests for Information (RFIs), convening stakeholder engagement sessions, updating policy manuals, and undertaking notice and comment via the formal rulemaking process, among others.
CMS’ strategic plan emphasizes the value of stakeholder engagement, and this is likely to lead to multiple opportunities for public input, particularly as CMS implements the new Medicare provisions of the IRA. For example, the agency must develop the policy parameters for reforming the Part D benefit design and is likely to seek input from Medicare Advantage (MA) and MA Prescription Drug Plans (MA-PDPs), providers, vendors, and consumer advocacy groups among others to inform its approach. CMS will also need input from the stakeholder community as it establishes the timelines, reporting, and negotiating mechanisms impacting Part B and D prescription drugs pricing and how it will implement the inflation penalty policies outlined in the IRA.
The IRA’s extension of the American Rescue Plan Act’s (ARPA) enhanced eligibility for premium assistance through 2025 provides more near certainty around eligibility and enrollment for this market. This may led to renewed momentum for CMS to engage with states and stakeholders on Marketplace policies and structures.
Many of the details around how the IRA’s health care policies will be implemented are unknown at this time. Stakeholders will want to monitor CMS’ progress and provide feedback with data-informed analysis and concrete and practical recommendations as these opportunities are announced.
An overview of many of the IRA’s health care provisions follows. Our team of experts can provide tailored analysis and support to clients as they begin to unpack the full breadth of the IRA’s policy changes and implications for Medicare Advantage and Part D plans, providers, vendors, consumer advocacy groups and other stakeholders.
- Part B and Part D Drug Pricing. Requires the Secretary of HHS to select a list of drugs eligible for negotiation, and enter into agreements with select manufacturers, negotiating a “maximum fair price” (MFP) for each selected drug in the Medicare program. The Secretary is required to negotiate on a certain number of drugs per year, 10 drugs in 2026; 15 drugs in 2027 and 2028, and 20 drugs in 2029 and subsequent years. The number of drugs negotiated will accumulate over the years, such that up to 60 drugs could be negotiated by 2029. Manufacturers who are not in compliance will face an excise tax that could far exceed the cost of drugs sold over time and civil monetary penalties.
- Prescription Drug Inflation Rebates. Requires manufacturers to pay rebates for Medicare Part B and D drugs with prices rising faster than inflation. The rebate calculation would be based on units and pricing in Medicare and would determine an inflation-adjusted payment amount based on the percentage by which the price exceeds the inflation benchmark, as determined by the Consumer Price Index for All Urban Consumers (CPI-U). If a manufacturer fails to pay the rebate, then they would be subject to a civil monetary penalty either equal to or at least 125 percent of the rebate amount for the quarter.
- The Part D inflation rebate takes effect October 2022 for Part D drugs and biologics.
- The Part B inflation rebate begins January 2023 for single-source drugs or biologics and certain biosimilar products. The IRA also includes an inflation growth cap on beneficiary coinsurance in Part B, beginning April 2023.
- Part B Payment for Biosimilar Biological Products. Amends Medicare’s Average Sales Price (ASP) payment methodology in cases where the ASP during the first quarter of sales is unavailable to establish a payment rate for biosimilars. The IRA also updates Medicare Part B reimbursement for certain biosimilar products for a five-year period beginning on October 1, 2022, by increasing the add-on payment from six percent of the reference product’s ASP to eight percent of the reference product ASP.
- Medicare Part D Assistance for Beneficiaries and Benefit Design. Increases the qualifying income amount (federal poverty level (FPL)) for the full Low-Income Subsidies (LIS) under Part D, from 135 percent of the FPL to 150 percent of the FPL, starting in 2024. The IRA also adjusts the cost-sharing requirements in the Part D benefit by:
- Eliminating cost sharing in the catastrophic phase of the benefit in 2024;
- Setting an annual out-of-pocket (OOP) limit for enrollees at $2,000 beginning in 2025;
- Capping monthly premium increases for a prescription drug plan in 2024 through 2029 at six percent per year. The Secretary may make a one-time adjustment to the beneficiary Part D premium contribution percentage in 2030 to ensure longer-term beneficiary premium reduction; and
- Adjusting the benefit coverage liabilities for the initial coverage phase and catastrophic coverage phase.
- Coverage for Insulin. Requires Medicare to cover select insulin products and not apply a deductible or impose cost-sharing more than $35 or 25 percent of the negotiated price (including all discounts) for a 30-day supply. Beginning in July 2023, Medicare must exempt from beneficiary deductibles insulin provided through durable medical equipment (DME) and ensure that coinsurance for a month’s supply of insulin administered through DME does not exceed $35. High-deductible health plans (HDHPs) will be able to cover selected insulin products with no deductible without impacting their status as a HDHP, starting in 2023.
- Medicare, Medicaid, and CHIP Coverage for Vaccines. Requires full coverage of Advisory Committee on Immunization Practices (ACIP)-recommended adult vaccines under Medicaid and CHIP without cost-sharing. The IRA also increases the Federal Medical Assistance Percentage (FMAP) by one percentage point, for adult medical assistance for such vaccines and their administration, during the first eight fiscal quarters on or after the date of the IRA’s enactment.
- Requires Medicare Part D provide full coverage without cost sharing of ACIP-recommended adult vaccines for plan years beginning on or after January 1, 2023.
- Enhanced Temporary Assistance for Marketplace Coverage. Extends the ARPA’s expansion of Advanced Premium Tax Credit (APTC) eligibility and amounts through 2025. ARPA modified the affordability percentages used for the calculation of APTC to increase subsidy amounts for individuals eligible for assistance.
Experts from HMA and HMA companies are supporting clients as they begin to strategize and formulate initial recommendations for federal agencies and plan for implementation. We will continue to monitor developments in this area and provide additional updates as more information becomes available.