Mental Health/substance Abuse Treatment Mergers Continue, with Mixed Feelings on Substance Abuse Side: Merger Proponents Cite Value of Braided Funds, Medical Integration, While Critics Fear 'Loss of Voice'

By Knopf, Alison | Behavioral Healthcare, November-December 2013 | Go to article overview

Mental Health/substance Abuse Treatment Mergers Continue, with Mixed Feelings on Substance Abuse Side: Merger Proponents Cite Value of Braided Funds, Medical Integration, While Critics Fear 'Loss of Voice'


Knopf, Alison, Behavioral Healthcare


Mergers are always touted for their hoped-for cost savings and improvements in patient care and recent behavioral health mergers are no exception. Nationwide, mergers between state-level mental health and substance abuse administrations, as well as mergers between treatment providers and trade groups are changing the landscape of the field.

But the process isn't always easy: culture clashes and turf battles are common.

A few notable mergers preceded the enactment of the Affordable Care Act (ACA), which has been a key driver of mergers and consolidations throughout healthcare. Since 2008, the federal Substance Abuse and Mental Health Services Administration (SAM HSA) has placed increasing focus on the integration of mental health and substance abuse treatment, settling on "behavioral" healthcare as the name for both. Under the rubric of co-occurring disorders, SAMHSA has encouraged treatment providers, whether they are licensed to treat mental illness or substance abuse, to adopt "no wrong door" policies, pledges to assist any patient who seeks care for any behavioral disorder.

Integration grants

In 2010, SAMHSA in coordination with the Health Resources and Services Administration, awarded a four-year, $5.3 million grant to the National Council for Behavioral Health to establish a national assistance center to integrate primary care, substance abuse, and mental health services. The assistance center was designed to help 56 treatment organizations that received integration grants from SAMHSA, as well as some of the HRSA-funded Federally Qualified Health Centers (FQHCs), which provide primary care services. One key integration strategy involves placing substance abuse and mental illness treatment within the FQHC.

In 2011, SAMHSA began a full-court press to focus on "behavioral health." And, although a statutory change would be required by Congress before it could happen, the idea of "blending" the federal block grants for substance abuse and mental health continued to swirl, both in the offices of state directors of those funds and at SAMHSA. The substance abuse constituency was concerned, because it stood to lose the most--the substance abuse block grant is three times bigger than the mental health block grant, a reflection of the fact that publicly funded mental health services are largely covered by Medicaid, while substance abuse treatment services aren't. Nevertheless, a flurry of mergers ensued, some of which are described below.

2011 state mergers

Louisiana's Department of Health and Hospitals (DHH) merged the Office for Addictive Disorders with the Office of Mental Health, creating the new Office of Behavioral Health, which serves as a third-door administrator. In announcing the consolida-don, DHH Secretary Bruce D. Greenstein said there is now a "no wrong door approach to serve individuals with mental illness and addictive disorders."

Also in 2011, the New Jersey Division of Addiction Services (DAS) merged with the state's Division of Mental Health Services (DMHS). For both Louisiana and New Jersey, the state goals were improving patient care and at the same time saving money.

That was also the year that New York Gov. Andrew M. Cuomo named the members of the Spending and Government Efficiency (SAGE) Commission that is redesigning the state's government. It is not known yet whether there will be a merger between the Office of Mental Health (OMH) and the Office of Alcoholism and Substance Abuse Services (OASAS), but already there are huge changes in payment, with managed care for substance abuse treatment becoming a reality. The process has been transparent, according to providers and state officials, who have authorized the OMH and OASAS to contract with managed behavioral healthcare organizations.

South Dakota in 2011 abolished the former Division of Alcohol and Drug Abuse, and instead left mental health officials at the helm of the Department of Social Services, which became the home for both the mental health and drug alcohol divisions. …

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Mental Health/substance Abuse Treatment Mergers Continue, with Mixed Feelings on Substance Abuse Side: Merger Proponents Cite Value of Braided Funds, Medical Integration, While Critics Fear 'Loss of Voice'
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