DPHHS hears public comment on Medicaid waiver for substance use, mental illness

HELENA — Montana’s health department is taking public comment on part of its plan to tackle the state’s substance use and mental illness crises. 

In a draft proposal released this month, the Department of Public Health and Human Services has suggested funneling federal Medicaid dollars to support people in search of stable housing, diagnosed inmates preparing to exit prisons, and specific treatments for stimulant addictions. 

The state is also proposing using Medicaid to pay for inpatient and residential treatment at the state hospital in Warm Springs and other private community-based providers, a seismic change that has met mixed reactions among behavioral health advocates.

The ideas are embedded within Gov. Greg Gianforte’s roughly $25 million plan known as the HEART initiative, or Healing and Ending Addiction through Recovery and Treatment. The plan proposes leveraging approximately $6 million in new revenue from marijuana taxes, as well as other sources, to trigger more funding from the federal Medicaid program.

If the state is successful, the policy fixes outlined this month will be funded through new uses of Medicaid dollars — a process that requires the state to submit a waiver to the federal government explaining its proposed changes and how they will impact Medicaid recipients. The state released its draft waiver in early July, the first opportunity for most members of the public to consider the details of DPHHS’ proposal.

“The goal of this waiver is to fill in gaps in the behavioral health continuum,” said Zoe Barnard, administrator of DPHHS’ Addictive and Mental Disorders Division, at a public hearing about the proposed waiver this week. “Since 2016, there have been major strides within the behavioral health continuum of care within Montana Medicaid. This is an attempt to close some of the last gaps that we have in the system of care.”

Barnard stressed that the list of topics discussed in the department’s draft waiver is not an exhaustive summary of all the proposals within Gianforte’s HEART initiative, which could also include freeing up more grant funding for prevention services and expanding the slate of benefits included in the state Medicaid plan.

The ideas included in the draft waiver, known as a Section 1115 Demonstration, must be experimental programs that are limited in their scope and timeline, Barnard said.

“An 1115 waiver is an experimental pilot or demonstration project. The initial demonstration period is usually five years, and it has to be budget neutral, which means we cannot spend any more money than we would have otherwise,” Barnard said during the public hearing Tuesday.

After the current 60-day public comment period concludes, Barnard said, the state plans to submit its draft waiver to the federal government by Sept. 30. There will be another public comment period once the plan has been delivered to federal officials. Ideally, Barnard said, the final plan would go into effect on Jan. 1, 2022. 

Members of the public and behavioral health advocates praised the draft proposal during the virtual meetings, highlighting the support for tenants and inmates as particularly beneficial changes.

“That’s so important for recovery, for anybody,” said Thomas Camel, a retired mental health counselor from Ronan, speaking about the need for stable housing. “If you don’t have housing, you’re in trouble.”

While federal Medicaid rules do not allow funding to be used to pay for housing, the waiver could provide coverage to help Medicaid recipients find and stay in safe living environments, as well as pay for moving costs and security deposits. The department said eligible individuals could include people who have been diagnosed with a serious mental illness or substance use disorder and also have at least one identified “risk factor,” such as homelessness, a history of frequent or long-term institutional stays, or previous involvement with the criminal legal system.

Several public commenters also voiced support for adding 30 days of mental health and medication management services for inmates before their release date. Some advocates, including the Behavioral Health Alliance of Montana (BHAM) and the Montana Primary Care Association, recommended providing inmates with up to 90 days of prescribed medication when they exit an institution to give them more support. 

Advocates also raised another provision outlined in the draft waiver that would allow some health care institutions, including the Montana State Hospital, to be reimbursed with federal Medicaid dollars for short-term residential and inpatient stays. 

The waiver, as drafted, would allow those providers to circumvent another Medicaid rule that excludes many “institutions of mental disease,” or IMDs, from receiving financial reimbursement from the federal government. Currently, the 270-bed public hospital is funded solely through the state’s General Fund.

Advocates pointed to the Rimrock treatment facility in Billings as a private institution that would benefit from Medicaid reimbursement. In a public letter sent by BHAM to DPHHS in June, the facility indicated it was experiencing a serious staffing shortage and extensive waitlists for its residential treatment homes.

“We need more inpatient beds in the state of Montana,” said Matt Kuntz, executive director of NAMI Montana, who recounted a recent experience taking someone to the Rimrock facility. 

“Sitting in their waiting room, watching people beg to get care, was one of the most heartbreaking things I’ve seen working in this field,” Kuntz said. 

Other commenters specified that they wanted only private facilities to access Medicaid reimbursement, as opposed to the public hospital, and questioned whether financing the roughly 100-year-old facility with federal dollars would qualify as an innovative or experimental approach.

“Reimbursing the state with Medicaid dollars for placing people at the institution as proposed in this demonstration waiver is not a “community based” solution — nor is it a new or innovative proposal,” said Beth Brenneman, attorney for Disability Rights Montana, in a written statement submitted to the department. “At best, it will send more people away from their homes for treatment in a large, congregate care setting with limited access to health care professionals for therapy. At worst, it will serve as a way to avoid encouraging and funding better treatment alternatives in the community — which is difficult and challenging work.”

Brenneman and other commenters also underscored the general need to improve pay and retention for the state’s behavioral health workforce by increasing the state’s Medicaid reimbursement rates, which some described as an existential problem facing the state.

“Montana sorely needs workforce support, development and a much better pay and compensation package for direct care providers and other employees throughout the mental health system,” said Rep. Mary Ann Dunwell, D-Helena, in a statement to the department Tuesday. “It’s too bad what our rate system limits providers to do. Bottom line, without a workforce, we don’t have a system that works.”

The department has scheduled more public meetings, including a consultation with tribal nations, in the coming weeks. The deadline for submitting written comments is Sept. 7.