Healthcare Law Blog

Kentucky’s Evolving Behavioral Health Providers

One of the most important effects of the Patient Protection and Affordable Care Act (“ACA”) is the profound change in the coverage of behavioral health services. Building on the Mental Health Parity and Addiction Equity Act of 2008, the ACA requires both Medicaid and Medicare to provide far more robust behavioral health benefits, especially in the area of substance abuse. This expansion of benefits is not without growing pains - health care providers are waking up to the new reality of a vastly expanded need for substance abuse and other mental health services as well as providers. As state Medicaid programs struggle to finance these new benefits, the need for behavioral health care providers and clinicians has become acute. This is especially true in Kentucky, where access to substance abuse care is crucial due to the epidemic of prescription drug and heroin addictions. Fortunately, however, the Cabinet for Health and Family Services has taken proactive steps to strengthen and expand behavioral health infrastructure to meet the ACA’s directives.

Prior to the ACA, Kentucky’s Medicaid program reimbursed behavioral health services through community health programs such as Bluegrass Comprehensive Care Services. Many behavioral therapists did not have the ability to bill Medicaid for their services and had to bill through another provider if their services were even covered at all. Now, however, the Commonwealth has recently finalized regulations that create a new class of providers that can receive payment from Medicare or Medicaid for the provision of behavioral health and substance abuse services. One of the most important new provider types, licensed under 902 KAR 20:430, is the Behavioral Health Services Organization (“BHSO”), which is authorized to provide a comprehensive array of varied services that may include physician, therapy, residential and other services. This new licensure category for BHSOs has created an opportunity for health care providers to provide a broad array of mental health and substance abuse services in a non-hospital outpatient setting that may be reimbursed by Medicaid and Medicare for the first time. In addition, Kentucky’s Medicaid program now recognizes a group practice of licensed therapists as providers, enabling these groups to receive reimbursement for covered therapy services as well.

One of the more direct benefits of becoming a BHSO is that it may provide physician services for medically directed substance abuse treatments that include prescribing medications for opioid addiction as part of the continuum of care for individuals with substance abuse disorders. Prior to the ACA’s mandate, Kentucky’s Medicaid program would not reimburse a physician treating a patient with substance abuse disorders for the physician services necessary to treat a patient. Physicians may now also treat these patients in their practices and bill Medicaid for their services. Unfortunately, Medicaid and its MCOs have not reimbursed these services at a level that motivates physicians to provide these important services to patients with substance abuse disorders. The inadequacy of payment creates barriers to accessing treatment as physicians have no incentive to treat these often difficult patients. When federal limitations on the numbers of patients that can be treated by physicians with medications like suboxone is coupled with low reimbursement for physicians for their services, access to care for Medicaid patients is still limited – often preventing patients from obtaining the very treatment that will allow them to function. Now, medically directed treatment is a covered Medicaid service that BHSOs and physicians may provide, which should increase access for eligible patients who previously had to pay cash to get this important treatment.

In an effort to further develop and expand the infrastructure of behavioral health providers, Kentucky’s new regulations allow behavioral health providers to form provider groups that may participate in the Medicaid program. Unlike a BHSO, a Behavioral Health Multi-Specialty Group (“MSG”), does not require licensure by the Office of Inspector General to participate in the Medicaid program. In a certain respect, this provider group is similar to a multi-disciplinary physician group by allowing different types of therapy providers to form groups. To qualify, the MSG must be an entity like a professional services corporation or a limited liability company and requires that at least one of the providers be previously enrolled in Medicaid prior to the enrollment of the group. Other new group provider types include the Applied Behavior Analyst therapists, art therapy providers, marriage and family counselors and licensed clinical social workers and psychologists.

Kentucky’s Cabinet for Health and Family Services has cleared the way for Medicaid to provide a host of new covered mental health and substance abuse treatments that will address crucial needs in the Commonwealth. The health care industry is at the start of massive changes in how behavioral health is provided and in what settings. These new providers are Kentucky’s attempt to bolster existing infrastructure in behavioral health, particularly in the area of substance abuse treatment. While a step in the right direction, these organizations are far from a perfect solution. To make these important services available, Medicaid must pay for them at a level that motivates providers to provide them. What this calls for is not just increased reimbursement, but also a process that integrates the identification of behavioral health problems with primary care. Identification of behavioral health problems must be integrated into primary care through behavioral health screenings and the development of appropriate screening tools. Behavioral health screenings should be performed by primary care physicians with training so that important and appropriate referrals can be made.

Lisa English Hinkle is a Member of McBrayer law. Ms. Hinkle chairs the healthcare law practice and is located in the firm’s Lexington office. Contact Ms. Hinkle at lhinkle@mcbrayerfirm.com or (859) 231-8780, ext. 1256.

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This article does not constitute legal advice.