Washington State

House of Representatives

Office of Program Research

BILL

ANALYSIS

Health Care & Wellness Committee

HB 2639

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Description: Concerning state purchasing of mental health and chemical dependency treatment services.

Sponsors: Representatives Moeller, Harris, Green, Cody, Morrell, Clibborn, Riccelli, Van De Wege, Bergquist and Freeman; by request of Governor Inslee.

Brief Summary of Bill

  • Expands the scope of work and membership of the Adult Behavioral Health System Task Force.

  • Directs the Department of Social and Health Services and the Health Care Authority to establish up to nine regional service areas.

  • Establishes contract requirements for the purchase of behavioral health services for Medicaid and non-Medicaid clients and factors to consider in the purchasing process.

Hearing Date: 1/27/14

Staff: Chris Blake (786-7392).

Background:

Community Mental Health System.

The Department of Social and Health Services (Department) contracts with regional support networks to oversee the delivery of mental health services for adults and children who suffer from mental illness or severe emotional disturbance. A regional support network may be a county, group of counties, or a nonprofit or for-profit entity. Currently, 10 of the 11 regional support networks are county-based, except for one which is operated by a private entity.

Regional support networks are paid by the state on a capitation basis and funding is adjusted based on caseload. The regional support networks contract with local providers to provide an array of mental health services, monitor the activities of local providers, and oversee the distribution of funds under the state managed care plan.

Approximately 40 percent of the state's resources for community mental health services are supported by federal Medicaid funding. Receipt of these funds is conditioned upon compliance with federal requirements. In July 2013 the federal Centers for Medicare and Medicaid Services (CMS) notified the Department that it characterizes Washington's system for purchasing mental health services through capitated contracts with local governmental entities as violating federal procurement principles. The CMS identified two options for Washington: (1) openly procure behavioral health services so that regional support networks and other commercial entities compete on the same basis; or (2) comply with federal procurement principles by shifting to a cost-based reimbursement system for regional support networks. The CMS has requested that the Department submit a corrective action plan.

Chemical dependency services.

The Department contracts with counties to provide outpatient chemical dependency prevention, treatment, and support services, either directly or by subcontracting with certified providers. The Department determines chemical dependency service priorities for those activities funded by the Department.

Adult Behavioral Health System Task Force.

In 2013 the Legislature established the Adult Behavioral Health System Task Force (Task Force) to examine the reform of the adult behavioral health system. Specifically, the Task Force must review the adult behavioral health system and make recommendations for reform related to:

The Task Force is comprised of two members of the House of Representatives, two members of the Senate, five members appointed by the Governor from various agencies, and a tribal representative. The Task Force begins on May 1, 2014, and must report its findings by January 1, 2015.

Summary of Bill:

Adult Behavioral Health System Task Force.

Topics are added to the review that the Adult Behavioral Health System Task Force must conduct. In addition to making recommendations for the way that services are delivered to adults with mental illness and chemical dependency disorders, the Task Force must consider the way that the services are purchased. Specifically, the Task Force must provide recommendations:

The membership of the Adult Behavioral Health System Task Force is expanded to include three members appointed by the Washington State Association of Counties. The date that the Task Force begins is moved from May 1, 2014, to February 1, 2014.

Regional service areas.

The Department of Social and Health Services (Department) and the Health Care Authority (Authority) must jointly establish regional service areas by September 1, 2014. By July 1, 2014, the Washington State Association of Counties may propose the composition of up to nine regional service areas to the Department, the Authority, and the Task Force. The regional service areas must:

When counties form a regional support network, it must be consistent with the boundaries of a regional service area.

Contracting for behavioral health services.

The term "behavioral health services" is defined to include both community mental health services and chemical dependency services. The Department and Authority contracts to provide behavioral health services, whether for persons eligible for Medicaid or not, must include specific provisions related to:

The process for purchasing behavioral health services must give significant weight to several factors, including:

When purchasing behavioral health services and medical care services, the Department and the Authority must use common regional service areas.

Specific requirements that regional mental health programs prioritize certain populations and provide enumerated services are replaced with a general requirement that regional support networks provide medically necessary services to Medicaid enrollees according to state and federal requirements and to non-Medicaid enrollees according to state priorities.

The Department's auditing procedures for regional support networks must be designed in such a way that they assure compliance with contractual agreements. The Department's duty to certify regional support networks is eliminated.

In addition to using resources for regional support networks, the Department may use resources to incentivize improved performance regarding client outcomes, integration of behavioral health and primary care services, and improvement of care coordination for persons with complex needs.

Elements are added to the list of services covered by regional support network programs, including peer support counseling, community support services, resource management services, and supported housing and supported employment services.

Contracting for chemical dependency services.

Any regional support network contract for behavioral health services or program to treat persons with alcohol or drug use disorders must provide medically necessary services to Medicaid enrollees according to state and federal requirements and to non-Medicaid enrollees according to state priorities.

Appropriation: None.

Fiscal Note: Not requested.

Effective Date: The bill takes effect 90 days after the adjournment of the session in which the bill is passed, except for section 1, relating to the Adult Behavioral System Task Force, which takes effect immediately; and sections 4 through 17, relating to standards for mental health and chemical dependency programs, which take effect April 1, 2016.