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January 13, 2014 The Honorable Beverly Mackereth Department of Public Welfare Public Health and Welfare Building 625

Forester Street Harrisburg, PA 17120 Submitted via email Dear Secretary Mackereth: I am writing on behalf of the Pennsylvania Association of County Administrators for Mental Health and Developmental Services (PACA MH/DS) to offer comments on the proposed 1115 demonstration waiver for Healthy PA. PACA MH/DS is an affiliate of the County Commissioners Association of Pennsylvania. PACA MH/DS represents 48 county-based entities responsible for administration of mental health and intellectual disability services, as well as 21 behavioral HealthChoices oversight entities. We appreciate efforts to expand availability of insurance coverage for Pennsylvania residents, and our comments offer several suggestions to ease implementation of this model and assure continuity of care. In addition to the following recommendations related to Healthy PA, PACA MH/DS strongly urges the Governor to maintain base funding for community services. This funding is necessary to offer housing options, employment options and supports, prevention, information and referral, and emergency and crisis services which cannot be paid for with Medicaid dollars and are not covered by private insurance. These supports remain critical under expanded insurance coverage, and base funds should be preserved to maintain them. Specialty Payment Model for Behavioral Health – Behavioral health conditions are a costdriver for physical health care and Pennsylvania’s managed care model for behavioral health has a proven track record of increasing access to service while reducing costs with very low administrative overhead. Counties and behavioral health managed care organizations (BH MCO) are partners who understand how to manage the behavioral health service delivery system in order to meet the needs of individuals with behavioral health conditions, including serious mental illness. The current Behavioral HealthChoices program structure, including specialty financing (the carveout) and county right of first opportunity, must be maintained for both high and low risk Medicaid program participants. Counties are supportive of better coordination of physical and behavioral health care as recently addressed in the State Innovation Model planning

Pennsylvania submitted to CMS, and believe these objectives can be achieved with distinct financing for physical and behavioral health plans. PACA MH/DS is interested in partnering with DPW and other stakeholders to explore the potential for Medicaid managed care organizations (MCOs) to be the health plans for the Healthy Pennsylvania private coverage option. We believe this can be done consistent with the existing carveout financing model. One option would be to have physical health and behavioral health MCOs present a coordinated Qualified Health Plan in the regions where they operate. Counties are experienced in managing HealthChoices and could be a partner for the Commonwealth in this endeavor. There may be continuity of coverage advantages and cost-savings achieved by having the Medicaid MCOs be the exclusive health plans for anyone up to 133 percent of the federal poverty level who is receiving subsidized insurance that is not employer-sponsored. Capitation and Risk – Forty-three counties serve as primary contractors for Behavioral HealthChoices capitated payment. This means they manage risk through various mechanisms including collaboratives, stop loss insurance and fee-based arrangements with MCOs. PACA MH/DS requests more information about the basis for capitation payments in this model. If low risk, healthier individuals who are eligible for Medicaid choose the private coverage option, this will increase the chance that average or total spending for Medicaid recipients will exceed capitation. Because the risk pool will be changed, it will be difficult for actuaries to project changes in cost or historical spending, and the rate-setting process may need to be modified, at least in the start-up years, to make adjustments based on new enrollment patterns. Covered Benefits – Pennsylvania’s application attempts to align Medicaid coverage with the private insurance market. PACA MH/DS requests additional information to clarify how supplemental services, evidence based practices and promising currently supported by the Behavioral HealthChoices program will be impacted. Services that could potentially be impacted include Assertive Community Treatment teams, non-hospital drug and alcohol treatment, psychiatric rehabilitation and intensive outpatient programs. Behavioral HealthChoices partnerships between MCOs and the counties also led to the funding of several promising practices with demonstrable outcomes. The availability of all these services will have significant consequences for individuals and underlying health care costs, as well as costs for the criminal justice system and other social services. Benefit limits – Utilization data from HealthChoices oversight entities supports the Department’s analysis that benefit limits are sufficient to cover current levels of utilization by 90 percent of the enrolled population. One exception to this is targeted case management – there are a significant number of people without a serious mental illness who receive targeted case management, and PACA MH/DS asks DPW to further examine the impacts of limiting TCM to the population with SMI. We also urge DPW to give additional thought to an efficient benefit

limits exception process to assure continuity of care for the other ten percent who exceed these levels. PACA MH/DS suggests that the individual continue to receive medically necessary services for the duration of the benefit limits exception process, and that benefit limits only apply after a final determination has been made. Premiums and Work Search Requirements – Under Healthy PA, premiums and work search requirements are tied to eligibility for Medicaid coverage and the private coverage option. From a policy standpoint, counties strongly support efforts to increase employment opportunities for individuals with disabilities who are able to work, but good health is a pre-requisite for employability of the medically frail population. PACA MH/DS suggests that the medically frail population not lose eligibility due to failure to comply with premiums and work search requirements. This, combined with addressing concerns related to specialty services, evidencebased practices and promising practices as previously noted, will help assure continuity of care and clinical best practices which are essential to prevent people with significant medical needs from decompensating. Our members are concerned that it is very administratively complex to assure timely notification of provider, payer and consumer if benefits are suspended due to failure to pay premiums or comply with work search requirements, as well as to restore eligibility when the requirements have been satisfied. This could result in increases to uncompensated care which will weaken the viability of a fragile provider network. Self-Assessments as Basis for Assigning Individuals to Medicaid High Risk/Low Risk Benefits - Academic research indicates that people tend to err on the side of good health in their health self-assessments. The proposal also states that if individuals do not comply with the selfassessment, they will be placed in the low risk category. In a system with two tiers of Medicaid benefit, there is a need to develop a responsive process to move individuals between the high risk and low risk categories as required by diagnosis, changing needs and response to treatment. PACA MH/DS supports vesting the MCOs with authority to make decisions about risk categorization based on provider diagnosis and assessment of health care needs. Administrative Functions – New administrative functions which will result from the proposal as drafted include: assessing and collecting premiums as well as making adjustments to premiums based on compliance with wellness incentives, tracking work search requirements, notification of eligibility changes due to failure to comply with premium payments or work search requirements, processing of a higher volume of benefit limits exceptions as well as reviewing and making determinations on exception requests for the work requirement. Some of these functions will be contracted out. County assistance offices will have additional workload to enroll individuals. The ability of the Department and its contractors to perform these functions

without interruption in continuity of care will be critical to counties who have responsibility for the criminal justice system and other social services costs. Thank you for considering our comments. If you have questions or would like to discuss any of these issues further, please contact me at 717-232-7554 x 3113 or email krotz@pacounties.org. Sincerely,

Kristen Rotz Executive Director