Review Article Urges that Medicaid Mental Health Waiver Process Provide More Formal Ways for Consumers and Advocates to be Heard

In an article published in the March issue of Psychiatric Services,  a team led by UNM faculty review the controversial 2000 decision by Governor Gary Johnson's administration to nullify efforts to "carve out" mental health benefits from the state's Medicaid managed care program. The team contended that New Mexico's waiver renewal process has national relevance due to the increasing emphasis on state-level processes in decision-making and called into question the meaning of "states' rights," as it relates to the oversight of specialty health care in the public sector.  They also recommend that stronger measures be taken in the future so that consumers of mental health services, patient advocates and provider's inputs are heard and addressed.

The article, "New Mexico's Medicaid Managed Care Waiver: Organizing Input from Mental Health Consumers and Advocates," was written by Cathleen E. Willging, Ph.D. and Howard Waitzkin, M.D., Ph.D., Department of Family and Community Medicine and Rafael M. Semansky, M.P.P., of the Bazelon Center for Mental Health Law in Washington, D.C. 

 To contain public sector health services expenditures, then New Mexico Governor Gary Johnson's administration developed a privatized, integrated managed care system to deliver physical and mental health services to Medicaid recipients. Such programs can only operate when a state obtains a waiver from the Centers for Medicare and Medicaid Services (CMS) and renewed at two-year intervals.

CMS granted the State of New Mexico the managed care system in July 1997, but in an unusual move, it denied a request for extension when the waiver expired in 2000.  At that time, mental health advocates contended that the state Medicaid agency had not provided adequate oversight of the Medicaid program and had permitted managed care organizations to place mentally ill persons in inappropriate levels of care. They argued that managed care had weakened the state's mental health care safety-net, as a minimum of 60 facilities had closed since the Medicaid reform's implementation.  In particular, two audits commissioned by the state legislature established that the system was unable to deliver high-quality, cost-effective mental health care


In an unusual move reflecting the deficiencies of the Medicaid program, CMS revoked New Mexico's waiver on October 19, 2000, and gave the state 90 days to transition the mental health portion of the integrated system into a fee-for-service structure. CMS officials indicated that they would not allow Medicaid managed care to continue unless the state Medicaid agency withdrew mental health services from its waiver renewal application. Governor Johnson personally appealed to then President-elect George Bush to consider reversing that decision.  The waiver was later granted to the state. 

The authors write that implicit in the concept of states rights is the belief that state governments - in contrast to the federal government - are closer to constituents and more responsive to their concerns.  Yet the New Mexico experience denied that responsiveness on the part of state government.  They argue that a more institutionalized formal structure would have granted local participants and community stakeholders a stronger voice in the waiver process and should be considered in the future.  Such structures would satisfy community stakeholders' desires to feel heard in waiver renewal processes and would enhance working relationships among consumers, patient advocates, and state officials who oversee Medicaid programs.

Contact: Cindy Foster, 272-3322

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