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A REVIEW OF MINNESOTA MEDICAID REIMBURSEMENT RATES: 2004-2014, Impacts on Mental Health Providers

Woelfel, Amanda

In response to comments from mental health providers that Medical Assistance rates are insufficient to provide quality care, and have been falling behind over time, the author and facilitators of this study have reviewed the impact of the last 10 years of rate changes in Minnesota for mental health services under Medicaid. While highly variable according to individual practice characteristics, our analysis of actual practices shows that Minnesota’s previously passed Medical Assistance rate increases for mental health providers have not been sufficient to keep pace with medical inflation, and have contributed to a shortage of mental health providers in the workforce. In particular, while the 23.7% rate increase delivered in 2007 was a step in the right direction, the value of the increase has eroded significantly over time. The rate increase does not apply to all providers providing important mental health access, and many clinics receive even lower rates than indicated if using master’s level providers. Therefore, we recommend that the Minnesota Legislature take the following steps to improve mental health reimbursement under Medical Assistance, and address the significant financial challenges threatening access to care for our state’s residents:

• Extend the 23.7% increase to all mental health providers, and not tie increases to status as Community Mental Health Center or CTSS certification
• Implement a disproportionate-share type payment to Medicaid mental health providers
• Eliminate Master’s level cutback
• Bring rates at least in line with Medicare—most are well below for non Community Mental Health Centers (noting that Medicare rates for mental health are often insufficient as well)
• Make PMAP data publicly available; audit PMAP payments to ensure rates are correctly paid, and ensure current fee schedules are implemented immediately
• Implement additional HCPCS codes to cover currently non-billable services

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Conducted on behalf of NAMI Minnesota. Supported by the Kris Nelson Community-Based Research Program, a program of the Center for Urban and Regional Affairs (CURA) at the University of Minnesota.
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