When it comes to delivery of mental health services, counties from Santa Clara to Orange are bracing for a double dose of policy medicine that could improve outcomes and coverage if side effects don’t undermine the health of the caregivers before patients can be transitioned to the new system.

The good news, according to Patricia Ryan, executive director of the California Mental Health Director’s Association (CMHA), is that the combination of federal healthcare reform and the state mental health parity law could mean more people will be covered by insurance that actually pays for mental health and addiction services.

The Wellstone/Domenici Mental Health Parity/Addiction Equity Act that went into effect in October of 2009 requires all group health plans covering more than 50 employees to cover mental health and substance use disorder treatment with no more restrictive co-payments, deductible or treatment limitations than applied to other medical benefits.

Meanwhile the individual mandate, competitive health plan exchanges and cost-sharing subsidies for people making up to 400 percent of the poverty limit measures in federal healthcare reform could bring more people into the primary care prevention loop than ever before.

Similarly, all the new enrollees in Medicaid (Medi-Cal) will benefit from the Wellstone/Domenici Parity Law and the mandatory mental health and prescription medications it will cover.

“That could be a big relief for the public system,” Ryan said. “Often it was the counties that ended up dealing with uninsured who had no where else to turn during dire mental health and/or drug and alcohol abuse emergencies.”

Rachel Loewy, a professor at the Prodrome Assessment Research & Treatment (PART) Program at UCSF, said the addition of funding just starting to have an impact from 2005’s Proposition 63 Mental Health Services Act, which imposes a 1 % income tax on personal income in excess of $1 million. The program was designed to fund local initiatives. In the end, Loewy thinks increased intervention will save local government money by preventing problems before they end up in the jails.

The key factor in determining whether the 58 counties that act as Medicaid input providers will make a smooth transition could be timing, according to Ryan.  

The deadline to set up healthcare exchanges and bring the newly-eligible Medicaid recipients into the system is January of 2014. However, counties were allowed to begin adding people as soon as April of 2010 thanks to a Section 115 waiver.

In applying for the waiver, California Dept. of Health Care Services said that “California can demonstrate the value of integrate care service delivery models for … high-needs, complex populations, strategies to include safety net providers in delivery system reform and approaches to slow the rate of growth in Medicaid spending.” In other words, by paying for more integrated care earlier, counties (and thus the federal government) could end up spending less later. Plus, the increased enrollment could result in increased federal dollars for consumer assistance programs, high risk pool funding and grants to develop counseling programs.

At the same time, however, Medicaid payments and county budgets are shrinking so doing more will less and less becomes even more important.

Kirsten Beronio, vice president of Public Policy and Advocacy at Mental Health America pointed to a number of opportunities to improve delivery systems in a recent presentation to CMHA. The Medicaid health home option, grants for co-location of primary and specialty care and grants for community health teams and school-based health centers could make mental health more accessible. Similarly, Medicaid Inpatient psychiatric care demonstrations, grants for early childhood home visitation and workforce strategy grants could help communities – particularly rural communities – could help build a safety net. Many of those programs have already become available or will be in the next year.

“I’m hoping we can start helping people sooner rather than later,” Ryan said.

California Psychiatric Association estimates 20 percent of the population will have some sort of serious mental illness during their lifetime. That calculates out to more than 7 million people in California. “It is a huge need,” Ryan said.

J.T. Long can be reached at jtlongandco@gmail.com