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Articles   |    
Current and Future Funding Sources for Specialty Mental Health and Substance Abuse Treatment Providers
Katharine R. Levit, B.A.; Elizabeth Stranges, M.S.; Rosanna M. Coffey, Ph.D.; Cheryl Kassed, Ph.D.; Tami L. Mark, Ph.D., M.B.A.; Jeffrey A. Buck, Ph.D.; Rita Vandivort-Warren, M.S.W.
Psychiatric Services 2013; doi: 10.1176/appi.ps.201200298
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Ms. Levit, Dr. Coffey, and Dr. Mark are affiliated with the Behavioral Health and Quality Research Division, Truven Health Analytics (formerly Thomson Reuters Healthcare), where Ms. Stranges and Dr. Kassed were affiliated when this work was done. Dr. Kassed is currently with the American Association for Clinical Chemistry, Washington, D.C. When this work was done, Dr. Buck was with the Center for Mental Health Services and Ms. Vandivort-Warren was with the Center for Substance Abuse Treatment, both at the Substance Abuse and Mental Health Services Administration. Dr. Buck is currently with the Center for Clinical Standards and Quality, Centers for Medicare and Medicaid Services, Baltimore. Ms. Vandivort-Warren is currently with the Office of Special Health Affairs, Health Resources and Services Administration, Rockville, Maryland. Send correspondence to Ms. Levit at Truven Health Analytics, 7700 Old Georgetown Rd., Suite 650, Bethesda, Maryland 20814 (e-mail: katharine.levit@truvenhealth.com).

Copyright © 2013 by the American Psychiatric Association

Abstract

Objectives  Goals were to describe funding for specialty behavioral health providers in 1986 and 2005 and examine how the recession, parity law, and Affordable Care Act (ACA) may affect future funding.

Methods  Numerous public data sets and actuarial methods were used to estimate spending for services from specialty behavioral health providers (general hospital specialty units; specialty hospitals; psychiatrists; other behavioral health professionals; and specialty mental health and substance abuse treatment centers).

Results  Between 1986 and 2005, hospitals—which had received the largest share of behavioral health spending—declined in importance, and spending shares trended away from specialty hospitals that were largely funded by state and local governments. Hospitals’ share of funding from private insurance decreased from 25% in 1986 to 12% in 2005, and the Medicaid share increased from 11% to 23%. Office-based specialty providers continued to be largely dependent on private insurance and out-of-pocket payments, with psychiatrists receiving increased Medicaid funding. Specialty centers received increased funding shares from Medicaid (from 11% to 29%), and shares from other state and local government sources fell (from 64% to 46%).

Conclusions  With ACA’s full implementation, spending on behavioral health will likely increase under private insurance and Medicaid. Parity in private plans will also push a larger share of payments for office-based professionals from out-of-pocket payments to private insurance. As ACA provides insurance for formerly uninsured individuals, funding by state behavioral health authorities of center-based treatment will likely refocus on recovery and support services. Federal Medicaid rules will increase in importance as more people needing behavioral health treatment become covered.

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Table 1Expenditures (in millions of dollars) for mental health and substance abuse treatment, by specialty provider and payer, 1986 and 2005a
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a Source: Substance Abuse and Mental Health Services Administration, National Expenditures for Mental Health Services and Substance Abuse Treatment, 1986–2005 (1)

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b Includes federal block grants to state and local governments

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c Includes Medicare, the federal portion of Medicaid, and other federal sources

Table Footer Note

d Includes the state and local portion of Medicaid and other state and local sources

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Table 2Percentage distribution of expenditures for mental health and substance abuse treatment, by specialty provider and payer, 1986 and 2005a
Table Footer Note

a Source: Substance Abuse and Mental Health Services Administration, National Expenditures for Mental Health Services and Substance Abuse Treatment, 1986–2005 (1)

Table Footer Note

b Includes federal block grants to state and local governments

Table Footer Note

c Includes Medicare, the federal portion of Medicaid, and other federal sources

Table Footer Note

d Includes the state and local portion of Medicaid and other state and local sources

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