New Medicaid payment system worries NJ mental health providers

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    After several delays, New Jersey is moving to overhaul the way it pays behavioral health and addiction service providers through its Medicaid program. The state is changing from a contracts-based system to a model that pays providers a fee per service.


    James Schuster is chief medical officer for Community Care Behavioral Health Organization, a managed care insurer in Pennsylvania. Schuster says switching to a fee-for-service model gives a state the opportunity use its Medicaid dollars more efficiently.

    “The advantage of moving to fee-for-service is you have a clearer idea of what services are being provided and to whom and it also provides an incentive for the agencies to enhance and expand their treatment services,” said Schuster.

    New Jersey hasn’t yet said what its fee-for-service rates will be, and providers are feeling anxious.

    “We need to know what the rate is. Everything hinges on that rate,” said Deborah Wentz, CEO of the New Jersey Association of Mental Health and Addiction Agencies.

    “For example it has to support if a facility’s roof leaks. You have to have dollars built into that rate so people can build up a fund to replace that,” she said.

    Providers expect the state to release the rates this summer, but not implement them until at least 2017.

    New Jersey will likely use the fee-for-service model to collect data on what services are used and how much they cost before it fully implements a managed care-based system.

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