Some organizations that provide behavioral-health treatment for New Jersey’s poorest residents welcomed the state’s decision to slow the transition to a new government payment model, giving them time to better protect these vulnerable patients as the decades-old system evolves.

But others said they remain concerned that the state’s proposed Medicaid reimbursement rates for certain mental health and addiction services are still too low to cover the actual cost of treatments. These providers are concerned that the new system could leave them with multi-million dollar budget shortages and force them to cut programs that will leave up to 20,000 patients statewide without consistent, quality care.

The Department of Human Services announced last week that, based on detailed concerns raised by several providers, the state would allow some providers to delay for six months the move to a Medicaid fee-for-service reimbursement system, in which the government repays organizations for the specific treatments provided. Most providers now have “deficit funding” contracts that require DHS to cover any budget gaps after they collect from all other sources, including county payments, foundation grants, and patient fees.

According to a letter DHS issued Thursday, mental health providers now have the option of delaying this transition until July 2017; originally they were scheduled to make the change in January. Many substance-abuse programs are already under the fee-for-service system and the rest are scheduled to switch this July. Organizations using the fee-for-service model will benefit from the new rates, which are significantly higher in some areas -- but not all.

“The State of New Jersey is listening and that’s the good news,” said Robert L. Parker, CEO of NewBridge, which treats some 8,500 patients in Morris, Passaic, and Sussex counties. “There’s been an outcry by providers, elected officials, freeholders, and others with concerns that the safety net might go away.”

“We think this is moving in a positive direction,” agreed Debra Wentz, President and CEO of the New Jersey Association of Mental Health and Addiction Agencies, which represents many of the providers. Wentz praised the state’s Division of Mental Health and Addiction Services for its willingness to work with members. “But, at the end of the day, no matter which system you use” – fee-for-service or the traditional contract – “the rates have to add up. You have to be able to pay your staff, your overhead.”

Gov. Chris Christie pledged to invest an additional $127 million -- $100 million of which is federal funding -- in the upcoming budget to boost Medicaid rates, which have traditionally failed to cover the full cost of most treatments. DHS, which has been working on the fee-for-service transition for several years, held dozens of meetings with providers to get input on the new rates and the payment-model change.

Original Article