Sweeping redesign of state’s mental health services policy underway

Wyoming is redesigning how it provides behavioral health services, and while most of the details are still to be determined, it seems clear fewer people will qualify for state-funded treatment. The upshot, however, according to advocates, is that by focusing scarce resources on those who need help the most, the state can prevent expensive and painful cycles of institutionalization and family breakups. 

House Bill 38-Community behavioral health-priority populations passed during the 2021 legislative session, requires the Wyoming Department of Health to reconsider the state-funded mental health and substance abuse system. 

Wyoming pays for many mental health and substance abuse services provided through a network of community behavioral health centers. In recent years the state put about $44 million annually into such programs, but demand for services consistently outstripped funding and supply. Then budgeters reduced mental health funding by $7.5 million annually — roughly 17 percent. That reduction was put in place Thursday, the first day of the fiscal year.  

HB 38, the result of a yearslong effort, was an attempt to get the most impact out of that oversubscribed investment. One of the mechanisms to that end involves  establishing priority treatment groups.  

Now the Department of Health, lawmakers and other stakeholders are wrestling with translating that new statutory mandate and others into functional policy.   

A report is due to the Joint Labor, Health and Social Services Committee Sept. 1. It’s expected to include recommendations for how to repurpose funds and implement the changes called for in the legislation. Full-scale implementation will likely take years. 

During the second of three public sessions on the redesign Tuesday in Riverton, Franz Fuchs, chief data analyst at the health department, described the ongoing effort as “a big animal.

“We’ve approached this redesign effort with a very cautious, and I think very iterative approach,” Fuchs said. “We’re taking small steps and circling back, trying to work through a lot of the very thorny and really big issues that we’re talking about.” 

Rep. Lloyd Larsen, R-Lander, who co-chairs the Select Committee on Mental Health and Substance Abuse and sits on the redesign steering committee, said in a May interview that  consensus existed among stakeholders, lawmakers and officials that certain populations should be prioritized for receiving services paid for by the state. 

Those categories include people coming out of the Department of Corrections with severe mental illness, people who would otherwise be admitted to the State Hospital in Evanston and families in which lack of intervention could lead to a child being removed from the home. 

The state has for years operated on a general access model where anyone, regardless of the level of treatment needed, was eligible for state-funded services if unable to pay — essentially a first-come first-served model with no prioritization based on circumstance or condition. Larsen said the legislation makes it so that certain people seeking help for mental health and substance abuse would need to find an alternative to state-funded treatment. 

“It’s just a matter of good policy,” Larsen said. “Do we have an open door policy where anybody, regardless of who they are, gets mental health services paid for by the state? And the consensus was no, that’s not the role of state government.”

But not everyone agrees that establishing prioritized categories is the right approach. Andi Summerville, Wyoming Association of Mental Health and Substance Abuse Centers executive director, is concerned that adding access barriers for those not in priority categories will lead to escalating issues that could have been avoided by earlier, less expensive interventions, she said. 

The legislation established three tiers of priority, with tier one as the highest priority and tier three the lowest. Tier one includes those involved in the criminal justice system, adults with acute or severe mental illness and families at risk. Clients categorized under tier two — indigent adults whose disorder interferes with their ability to function in society and who do not have insurance covering substance abuse or mental illness treatment — would need to earn a household income less than 150 percent of poverty level to be eligible for state funds. Tier three clients are those who are indigent, without insurance and whose income is below 150 percent, but who lack a disorder that impairs function in society. 

“In tiers two and three, the financial cutoff level is at 150 percent of poverty level, and generally right now most of the counties run that up to 300 percent, so you’re essentially slashing general access by half,” Summerville said. “In most places, we don’t have an answer on where those people should go.”

According to 2021 federal poverty guidelines, individuals making more than $19,320 would not be eligible for state support in tiers two or three. 

Rep. Sue Wilson, R-Cheyenne, who is on the steering committee and chairs the House Labor, Health and Social Services Committee, said she doesn’t see the redesign as necessarily reducing the number of people eligible for services. Instead, it just brings those most in need to the front of the line. 

“Right now, there is a de facto prioritization, which is kind of first come first served,” Wilson said. “My hope is that it just means that people with greater needs will be prioritized over people with lesser needs.”

The fact that the state must redesign the system in a way that leaves some who are unable to pay ineligible for public support is indicative of systemic failures that the Legislature will need to address in other areas, Rep. Karlee Provenza, D-Laramie, said. 

“I think if we can honestly expand Medicaid, that that’s going to help with funding some of this,” Provenza said. “I think if we can come to grips that we need to fund this and that it will save us money that we’ll be better off. I just worry about any model that might have to turn people away because they can’t pay.”

Four stakeholder and lawmaker working groups are working to settle the unanswered policy questions regarding eligibility, transitions, outcomes and payment. The process began in May, but much is left to be done before the Sept. 1 report is due. 

The health department’s Fuchs said the discussion around eligibility has raised more questions than answers, but emphasized there is adequate time to do the necessary work. 

“We’re not trying to implement the system tomorrow or at the end of the summer or even next year,” he said. “There’s no need to have the system implemented immediately, so we really want to be careful.”

Summerville, who is involved in each working group, said addressing the unanswered questions of eligibility, transitions and outcomes will take weeks, but that perhaps the biggest remaining challenge is redesigning the payment model. 

The payment question, Summerville said, is a chicken-and-egg scenario, and pushing that conversation to the end of the summer has left uncertainty in crafting policy recommendations.

“It’s hard to design a system when you don’t know how much the state is willing to pay,” she said. 

The current system distributes the state appropriation for mental health and substance abuse treatment and federal block grant dollars to community mental health centers through a contracting process. Centers draw down 30 percent automatically as a base payment, then invoice for the remaining 70 percent monthly based on service hours the centers provide to clients, with a maximum monthly amount based on the overall two year contract. 

The payment working group is trying to define how providers will be paid in the future and how much risk will be borne by providers versus the state. A new model could consist of a mix of: 

  • Fee for service
  • Outcomes-based payments
  • Block grants
  • Capitation
  • Essential subsidy payment design

Determining how payment will work is complicated, Wilson said, and she doesn’t have any fast answers now. 

“There are positives and negatives to every payment structure,” Wilson said. “You not only have to consider what the incentives are of certain structures, but also how the payment structure or the incentive impacts the care that is available to patients.”

The final payment model will likely be a hybrid, Wilson said, and may be amended as experience teaches stakeholders what works and what doesn’t.  

An Aug. 17 meeting is scheduled to be the final time the working groups and steering committee will come together before the report is due to the Joint Labor, Health and Social Services Committee. Fuchs said payment would be the focus of the Aug. 17 gathering. 

The work of redesigning how the state approaches mental health and substance abuse services will continue long after the Sept. 1 report is due, Wilson said. Because, as with so many things the Labor, Health and Social Services Committee tackles, the problem is never really solved. 

“We look at the same issues: high cost of health care, aging, mental health, workforce shortages,” she said. “Those are pretty much perennial topics, and that’s just the way it is. We won’t stop thinking about it.”

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