Opting Out of Medicaid Expansion: Impact on Encounters With Behavioral Health Specialty Staff in Community Health Centers

More effectively addressing the behavioral health needs of patients is key to health care delivery system reform (1,2). Providing access to colocated primary care and behavioral health services is one strategy to reduce unmet need for behavioral health services. Health centers are critical access points for primary care and behavioral health services in underserved communities (3). To receive funding under Section 330 of the Public Health Services Act, federally qualified health centers are required to serve all patients without regard to ability to pay and provide mental health and substance abuse treatment services on site or by referral (4). Over four in five health centers offer on-site mental health services, and half offer substance abuse treatment services on site (5); behavioral health specialty staff in health centers had over six million encounters in 2013 (6). In recognition of the need to expand capacity in underserved areas, the Affordable Care Act (ACA) contains funding to expand the health center program (7).

The potential of the ACA to increase access to services, including those provided by behavioral health specialists in health centers, is affected by state decisions regarding whether to expand Medicaid. As it was written, the ACA increases access to affordable insurance by two main avenues: the Medicaid expansion to residents at or below 133% of the federal poverty level (FPL) and tax subsidies for low-income Americans in households above 133% FPL to purchase insurance through the ACA health insurance marketplaces with no exclusions based on preexisting conditions. The Supreme Court decision allowed states to opt out of expanding Medicaid, and as of June 2014, 24 states had opted out, leaving up to 3.6 million individuals uninsured who might have been covered if all states expanded (8). Most health center patients fall below the poverty line, rendering them ineligible for tax subsidies to purchase marketplace plans. Thus many uninsured health center patients in opt-out states might still lack access to affordable insurance, particularly those with incomes below 133% FPL.

In opt-out states, the ability of the health care infrastructure to build capacity for critical services such as those provided by mental health and substance use disorder specialists in health centers might be not be fully realized, affecting access to care in underserved communities. On-site capacity is crucial because unmet need for mental health services in the United States is increasing (9), and nearly every county has a shortage of mental health professionals, particularly providers who can prescribe medications (10). More than one in three health center patients reported unmet need for mental health services in 2009 (11). Similar to other types of specialty services, affordability is a barrier to access (11,12), and it is difficult to find community-based behavioral health providers that accept uninsured and Medicaid patients (13,14).

To shed light on the indirect impact of state Medicaid expansion decisions, this study calculated the estimated impact of states’ decisions to opt out of expanding Medicaid on the estimated utilization of services provided by mental health and substance abuse treatment specialists in health centers in 2020. The impacts of Medicaid expansion on insurance coverage rates (15,16), HIV screening and treatment (17,18), mortality (19), and state (8,20) and employer (21) budgets have been examined. This study estimated the number of additional encounters with mental health and substance use disorder specialists that could occur in health centers if all states were to expand Medicaid by 2020. Previous research indicates that behavioral health service capacity in health centers is particularly sensitive to funding levels, compared with other services, because on-site behavioral health services are not required (22). This study highlights the missed opportunities inherent in states’ Medicaid expansion opt-out decisions (23). The findings can be used to guide policies intended to decrease unmet need for behavioral health treatment, particularly among patients in underserved communities.

Methods

This study used the 2012 Uniform Data System data set, which is maintained by the Health Resources and Services Administration. Health center grantee organizations report patient demographic data annually at the organization level, including insurance mix, the number of full-time–equivalent mental health and substance use disorder treatment specialty staff members, the costs of the services provided by these specialists, and the number of encounters they provided. These data do not include behavioral health services provided by primary care staff, case managers, and peers. Descriptive statistics were calculated for 2012, stratified by Medicaid expansion status in 2014.

Previous research indicates that patients remain loyal to health centers when they gain insurance (24). State Medicaid expansion decisions are likely to affect health center revenues because a higher percentage of patients will become insured in expansion states. Using the projected case mix by insurance status and total patient caseload and following the methodology reported by Ku and colleagues (3), we estimated the total potential health center revenue in 2020 that will not accrue to health centers if states continue to opt out of Medicaid expansion; we derived these estimates by multiplying the projected case mix by the payment gap for patients with each type of insurance. The payment gap was defined as the difference between the average cost and the average reimbursement per patient, divided by the average cost per patient. For marketplace plans, the payment gap was calculated as the average of Medicaid and private insurance estimates.

These figures were used to estimate the revenue that could be used to support the provision of behavioral health services delivered by behavioral health specialists on staff in health centers. Because health centers are not-for-profit organizations, they use revenues to cover the costs of providing services to patients. We assumed that in 2020, health centers will spend the same percentage of total revenues to cover services provided by mental health and substance abuse treatment specialty staff as they did in 2012. The percentage of total costs, including administrative overhead (described as “allocation of facility and nonclinical support services” in the Uniform Data System), that was allocated to encounters with behavioral health specialty staff stayed constant between 2009 and 2012. So, the 2012 percentages of total costs used to provide behavioral health specialist services were used to estimate the percentage of total costs allocated to behavioral health services in 2020: 4.9% for mental health specialist services and .7% for substance abuse treatment services. As noted in the discussion of limitations below, this assumption does not factor in the potential increase in demand for behavioral health services.

The number of encounters that might occur in opt-out states if these states expand Medicaid by 2020 was calculated by dividing the estimated revenue that would have been used to cover behavioral health services by the estimated cost per encounter with behavioral health specialty staff in 2020. The 2020 cost per encounter was estimated by dividing the total number of encounters reported by mental health and substance abuse treatment specialty staff in 2012 by the costs of providing these services, assuming a 4% annual growth rate. Based on the proportion of patients in each nonexpansion state in 2012, state-level estimates were produced by dividing the additional behavioral health encounters projected for 2020. Stata version 12.0 and Microsoft Excel 2010 were used for the analyses.

Results

At baseline in 2012, health centers in nonexpansion states were more likely to be in the South and were less likely to be in the Northeast, West, or Midwest, reflecting the characteristics of the states that did not expand Medicaid for the 2014 plan year (Table 1). Health centers in nonexpansion states were more likely to be located in rural areas; 57.6% of health centers in nonexpansion states are in rural areas, compared with 39.2% of health centers in states that expanded Medicaid. Health centers in states that did not expand Medicaid were smaller and less likely to have quality accreditation or recognition as a patient-centered medical home in 2012, compared with health centers in states that expanded Medicaid by 2014.

A higher percentage of health center patients in nonexpansion states were uninsured at baseline (42.9%, versus 34.8% in expansion states). In addition, a lower proportion of health center patients were covered by Medicaid in nonexpansion states in 2012, prior to ACA implementation. Slightly over one-third of patients in expansion states were covered by Medicaid (38.6%), compared with 29.7% in states that opted out of expanding by 2012. Differences in the race-ethnicity mix of health center patient caseloads were also observed, with a higher percentage of Hispanic patients and a lower percentage of black patients in health centers located in states that expanded Medicaid by 2014 compared with states that did not.

Estimated Impact of Medicaid Expansion Opt-Outs on 2020 Health Center Revenues

The estimated 2020 case mix of patients will differ in health centers located in states that opt out of Medicaid expansion, compared with the case mix that would have occurred in opt-out states if all states were to expand Medicaid by 2020 (Table 2). If opt-out states do not expand by 2020, over one in three patients will be covered by Medicaid in 2020 (37.1%), and 29.2% will be uninsured. If these states expand Medicaid by 2020, almost half of each health center’s patients will be covered by Medicaid (47.1%) and the uninsurance rate is projected to drop to 21.5%.

In 2020, third-party payments fall short of covering the costs of service provision. [An additional table, provided in an online supplement, provides details.] If all states expand Medicaid by 2020, an additional $229,607,165 in revenue is projected to accrue to the nation’s health centers, because of the reductions in losses from treating uninsured and underinsured patients and the provision of services that are not reimbursed by insurers, such as behavioral health services delivered on the same day as medical services and enabling services, such as transportation and translation (Table 2).

Impact of Revenue Changes on Behavioral Health Service Provision

If all states expand Medicaid, then by 2020, the estimated additional revenue that could flow to health centers could be used to cover the costs of service provision by behavioral health specialists. We calculated that 4.9% of total accrued costs in health centers in 2012 were for mental health services provided by specialists and that .7% covered the costs of providing specialty substance abuse treatment services. Assuming that the percentage of health center expenditures allocated to service provision by behavioral health specialists stays constant from 2012 to 2020, an estimated $11 million of additional funding might be available to cover the costs of providing mental health services, and over $1.5 million more might be allocated to the provision of substance abuse treatment services in 2020, if all states opt to expand Medicaid by then (Table 3).

Overall, if current nonexpansion states expand Medicaid by 2020, an estimated additional 59,214 mental health encounters and 11,480 encounters with substance abuse treatment specialists might occur in health centers in these states. This is equivalent to a marginal increase of 70,694 encounters with behavioral health specialists that could occur in 2020 if all states expand Medicaid by then. If Florida, Texas, and Pennsylvania expand Medicaid, a combined total of 25,268 additional behavioral health encounters could be provided to health center patients in these states in 2020.

Discussion

At baseline in 2012, health centers in states that opted out of expanding Medicaid in 2014 were disproportionately rural, located in the South, smaller, and less likely to have attained accreditation for quality of care or recognition as a patient-centered medical home. Health centers in opt-out states also had more uninsured patients and lower Medicaid caseloads compared with health centers in states that expanded Medicaid by 2014. These current disparities in uninsured and Medicaid case mix will only be exacerbated. Our findings highlight the impact of insurance case mix on the provision of nonrequired services in health centers, such as mental health and substance use disorder services. If all states expand Medicaid by 2020, we estimate that nearly $230 million in additional revenue could accrue to health centers in states that are currently opting out. If health centers are able to hire additional staff, this revenue could cover the costs of over 70,000 encounters with mental health and substance use disorder specialists, in addition to general medical, dental, and other services.

This study indicates that expanding Medicaid would likely result in higher utilization of behavioral health services in health centers, highlighting an important indirect benefit of Medicaid expansion. The estimates in this study are consistent with previous research demonstrating that health centers’ capacity for the provision of nonrequired services, such as mental health and substance abuse treatment services, is particularly vulnerable to fluctuations in health center revenues (22). This increase in health center capacity is in addition to the positive impacts on access to care among patients who would become newly eligible for Medicaid coverage (25).

One implication of these findings is the critical importance of reducing uninsurance among health center patients by enrolling as many eligible individuals as possible. Outreach and enrollment activities are affected by state policies, so reducing the hurdles to effective outreach activities is critical (26). Also, streamlining enrollment requirements to enroll those who are eligible for Medicaid would be helpful, because at baseline, only 61.7% of eligible individuals were enrolled in Medicaid (27).

These findings also highlight the importance of team-based care, given the limited capacity for patient encounters with behavioral health specialists in health centers. Training for teamwork and for the use of collaborative and integrated models is needed to ensure that the behavioral health specialists practicing in health centers are supporting primary care providers as they care for patients with behavioral health needs (28). The most recent funding opportunity to expand mental health and substance use disorder treatment capacity specifically requires the provision of integrated care (29). It is important to note that, even as on-site behavioral health capacity in health centers increases, strong linkages to community-based behavioral health services are needed, particularly for services such as detoxification, residential treatment, and intensive outpatient treatment. Previous research shows that unmet need for mental health services is more likely to be found among patients with more severe mental illness, highlighting the need to ensure that health center patients have access to the full continuum of services (11).

Several limitations of the study should be noted, given that these results are sensitive to the assumptions used to generate the estimates. In particular, these analyses did not account for the potentially increased demand for behavioral treatment services because of expanded insurance coverage for these services. Health centers are required to be responsive to the service mix demands of health center users, by conducting periodic needs assessments and having patient-majority governing boards. Therefore, increased demand for behavioral health services among health center patients, as a result of increasing insurance coverage for behavioral health services and less cost sharing, might drive increased spending on behavioral health services as a percentage of total health center spending (30,31). Therefore, our estimates of the number of behavioral health encounters that could occur in 2020 if all states expand Medicaid by then might be conservative. Also, this study examined only encounters with behavioral health specialists, but some behavioral health services are likely to be provided by primary care staff. Information on behavioral health services provided by primary care staff, case managers, and peers is not available in the Uniform Data System; increasingly, behavioral health services are delivered by nonspecialists, so this is a critical shortcoming of the data set. Finally, there is a lag between revenue receipt and the ability to hire a specialist, so these projections might overestimate the additional number of encounters for patients with behavioral disorders that might occur in 2020 if all states expand Medicaid by then.

This study focused on the provision of behavioral health care by mental health and substance abuse treatment specialists in health centers. Future research should monitor the indirect impact of state Medicaid expansion decisions on other types of capacity and utilization within health centers, as well as throughout the health care delivery system. The impact on community mental health centers, rural health clinics, hospitals, and other safety net providers is especially critical to understand. Future research should also aim to bolster the evidence base for team-based care, so that behavioral health specialty staff can be most effectively utilized in health centers and other settings.

Conclusions

Addressing patients’ behavioral health needs is essential to care delivery transformation, and health centers are critical access points for medical and behavioral health services in underserved communities. As not-for-profit organizations with a mission and statutory mandate to increase access for underserved communities and populations, health centers use revenues to cover the costs of service provision. Given the limited number of behavioral health providers willing to accept patients who are uninsured or covered by Medicaid, health centers will remain a primary source of behavioral health treatment services for underserved populations. There is a clear need for on-site behavioral health services at most health centers, but financial constraints might limit the ability of health centers to expand their scope of services, particularly in states that opt out of expanding Medicaid.