Mental Health and Substance Abuse Benefits UnderMedicaid. Currently, only a few states have suchwaivers under SCHIP. Scope of Mental Health And Substance Abuse Benefits for Children -- A Snapshot of Selected Medicaid and SCHIP Coverage Policies in FY2000

In this section, a description of the state survey data collection instruments andimplementation issues is provided, followed by important data caveats that affect interpretation ofthe survey findings presented in the subsequent section. For Medicaid, survey results were reported for all 50 states and the District of Columbia. As of June 2000, nearly all Medicaid and SCHIP programs covered inpatient and outpatientmental health services for children. Most Medicaid and SCHIP programs also covered inpatient detoxification and outpatientsubstance abuse services for children. Stateabbreviations are used in this table. Coverage of, and Limits for/Monitoring of OutpatientSubstance Abuse Services for Children Under Medicaid and SCHIP
(as of June, 2000)
Source: Congressional Research Service (CRS) analysis of benefits data collected in two 2000surveys, one for state Medicaid programs and the other for separate state SCHIP programs,conducted by the National Academy for State Health Policy under contract to CRS. In general, the types of limits placed on outpatient mental health services under SCHIP weresimiliar to those under Medicaid. In several cases (6 of 40), a single overall quantity limit foroutpatient mental health services, in combination with related benefits, was used. Outpatient Substance Abuse Services. As reported above, under SCHIP, most programs did not cover RTC services at all. Coverage policies and benefit limits described in state Medicaid plans are seldom absolute,especially for children, due to the medical necessity criterion, but also because of EPSDT. Unlike Medicaid, but consistent with federal statute, separate SCHIP programs are modeledafter private sector, commercial insurance products. In the CRS-sponsored survey, some of the benefits for which data on limits were collected(i.e., residential treatment centers) are commonly covered under Medicaid, but not routinely includedin commercial insurance products, and hence, SCHIP. SCHIP children have access to the same types of benefit packages available in theprivate sector as intended by Congress. Faced with declining revenues and increasing expenses, states proposed or implemented anumber of Medicaid cost containment strategies for fiscal years 2003 and 2004. (24) The majority of changeshave focused on prescription drug costs followed by reductions in provider reimbursement rates, andthe elimination or reduction in optional services and populations. Examples of such activities includeeliminating dental care for adults without children (under SCHIP waiver programs), reducingpayments for providers, capping enrollment and increasing beneficiary cost-sharing requirements. Definition of other terms (in alphabetical order) :
BHO -- behavioral health organization (also see PHP below)
CY -- calendar year
day treatment -- see partial hosp (below)
eval -- evaluation
FFS -- fee-for-service
ICF/MR -- intermediate care facilities for the mentally retarded
IMDs -- institutions for mental disease
IP -- inpatient
MC -- managed care
MCO -- managed care organization
MD -- physician
med eval -- medical evaluation
med management -- medication management (e.g., monitoring use of prescribeddrugs to treat mental illness or substance abuse)
MH -- mental health
OP -- outpatient
PA -- prior authorization
partial hosp -- also called day treatment or partial care; is a structured environmentfor youth during the day that does not involve an overnight stay; may include anintegrated curriculum that includes education, counseling and family interventions;setting of care may be a hospital, school or clinic; may be a transitional service afterinpatient psychiatric or RTC care for youth who no longer require institutionalizationbut who are not ready to be placed back in the school system due to on-going needsfor extensive treatment and supervision.
About 18% of all U.S. adolescents received mental health treatment in 2000. Almost $7billion was spent for such services for teens in 1998. While many youth have used alcohol or otherillicit drugs, less than 2% received treatment for substance use in 2000. In 1997, costs for such carefor children under 18 totaled $604 million.
In this report, the availability of selected mental health and substance abuse services underMedicaid and SCHIP for low and moderate income children is explored. Under SCHIP, states mayprovide coverage by expanding Medicaid or creating a separate SCHIP program or both. Data fromtwo CRS-sponsored surveys, documenting general limits placed on such services as of June, 2000,are presented. For Medicaid, including Medicaid expansions under SCHIP, survey results werereported for all 50 states and the District of Columbia. For separate SCHIP programs, survey resultswere reported for all 41 programs operating in 33 states.
Nearly all Medicaid and SCHIP programs covered inpatient and outpatient mental healthservices for children, and most also covered inpatient detoxification and outpatient substance abusetreatment. Such benefits were more frequently unlimited under Medicaid than under SCHIP. Whilethe majority of Medicaid programs covered residential treatment centers, most SCHIP programs didnot. In many cases, expressing benefit limits as a simple quantity (e.g., days of care, admissions peryear, visits/hours per year) did not address the full scope of restrictions on coverage. Other meansof limiting benefits were also reported (e.g., use of prior authorization, thresholds specific tocondition/diagnosis, and treatment plan requirements). Under SCHIP, but not Medicaid, a singlequantity limit was often applied to two or more related benefits combined rather than separately foreach benefit category.
Coverage policies and benefit limits for children under Medicaid are seldom absolute in partbecause of special provisions in the law requiring that children receive all medically necessaryservices authorized in federal statute. This guarantee does not exist in SCHIP. Instead, SCHIPchildren have access to similar types of benefit packages available in the private sector.
Facing declining revenues and increased expenses, some states are implementing a numberof Medicaid cost containment strategies focused on reductions in provider payments, and reductionsin and/or elimination of optional services and populations, mostly affecting adults. Under SCHIP,some states are also capping enrollment and increasing beneficiary cost-sharing. While theseproposed strategies appear to leave mental health and substance abuse benefits for children largelyintact, they could effectively limit access to care.
Finally, this report also describes mental health parity and its application to Medicaid andSCHIP under current federal law, and related, pending legislation in the 108th Congress.