Oklahoma Health Care Authority Rescinds Tiered Reimbursement Structure for Inpatient Psychiatric Providers

Article excerpt

A tiered reimbursement structure that prompted some inpatient psychiatric providers to worry about whether they'd be able to stay in business has been rescinded by the Oklahoma Health Care Authority.

The OHCA, which administers the state's Medicaid program, instituted a reimbursement structure April 1 that reduced rates paid to inpatient psychiatric providers the longer a child was hospitalized. Rates were reduced by 10 percent for days 46 to 90 of a child's hospitalization and an additional 5 percent for days 91 and over. The move was in response to skyrocketing behavioral health costs in the Medicaid program and a desire to direct more of those youths, when possible, to outpatient services that would allow them to stay at home.

Oklahoma's psychiatric providers are elated at the news.

"We are thrilled with the decision to not implement the tier system," said Don Henderson, director of behavioral health at Integris Bass Baptist Health Center in Enid and new president of the Oklahoma Psychiatric Hospital Association. "It would have been tragic had that happened, along with the other cutbacks, especially on rural psychiatric hospitals."

The tiered system was approved at a time when the OHCA, like other state agencies, were facing repeated requirements to slash their budgets. And Oklahoma's Medicaid costs for youth inpatient psychiatric services had nearly doubled from 2006 to 2009, growing from $58 million to $112 million. Debbie Spaeth, director of behavioral health for the OHCA, said the agency was simply looking for ways to save money in ways that affected the least number of people.

"At the time of the budget cuts last year, we were looking at all different areas of the program where we felt like we could make cuts that wouldn't affect as many members, and this is one of those areas where we felt if we did a tiered reimbursement, it might also financially incentivize hospitals to focus more and more on discharging these kids and getting them back in the community and getting those (outpatient) appointments set up," she said.

As it turns out, the tiered reimbursement system didn't yield as much savings as the OHCA expected, plus a new fiscal year began only 45 days into the structure. However, what did pay off was the agency's multi-year efforts in better care coordination and increased outpatient access. Spaeth said the average length of stay of 72 days in 2009 has dropped to a 56-day stay this year. And, according to material dispersed at the OHCA meeting Thursday, that helped the agency realize more than $20 million in savings, which is being used to fund the increased use of outpatient services and satisfy budget cut obligations.

The OHCA also is reimbursing inpatient providers 100 percent of the base per diem rate in effect April 1 for each authorized date of service. …