BOISE, ID – The private company that runs Idaho Medicaid mental health benefits is planning to cut pay rates for doctors and health care providers.
Magellan of Idaho, the contractor, plans to cut pay rates for Medicaid mental health services by at least 4% but up to 15% for partial hospitalizations, according to a notice it sent providers earlier this month.
Idaho Medicaid cuts could force disability providers to close. The state wants to exempt services.
The cuts come after the Idaho Department of Health and Welfare announced 4% cuts to Medicaid provider pay rates, following Gov. Brad Little’s order for 3% midyear budget cuts across state government as state tax revenues lag behind expectations. Magellan’s cuts appear to be an attempt to offset cuts the company faces from Health and Welfare.
Many of the Medicaid mental health contractor’s cuts are scheduled to take effect in November. That leaves providers little time to plan, and it risks the state losing treatment options, especially in rural areas, said Jason Coombs, founder of Brick House Recovery, a substance abuse treatment center in Boise and Idaho Falls.
“Idaho’s behavioral health system is built on the shoulders of dedicated providers who continue showing up for individuals and families in need,” he said in a statement. “We recognize that adjustments to Medicaid funding are complex, but they must be implemented in ways that protect continuity of care and sustain the professionals who make that care possible.”
Idaho is working with managed care organizations to find cuts in contracts
Magellan is one of several private companies, called managed care organizations, that run Medicaid benefits in the state.
Idaho projected to end fiscal year with unconstitutional $56.6M state budget deficit
In August, the Idaho Department of Health and Welfare announced 4% cuts to Medicaid provider pay rates. The agency said cuts would extend to the state’s payments to managed care organizations, and could turn into “provider rate reductions or changes to optional covered services.”
That came after Idaho Gov. Brad Little ordered all state agencies besides public schools to cut budgets midyear by 3% – which his budget chief directed agencies to extend permanently.
The cuts were meant to avoid a projected $80 million budget shortfall, which would violate the Idaho Constitution’s requirement for the state to maintain a balanced budget. But projections released earlier this month show Idaho is still projected to have a budget deficit, to the tune of $56.6 million dollars.
It isn’t immediately clear how long Magellan’s cuts will last.
“Magellan will continue to coordinate with (Health and Welfare) to determine how long these rate reductions must be in place or if other service changes are necessary to ensure a balanced budget,” the company wrote in its notice to providers. “Magellan understands this is a challenging budget situation and we will continue to work with the IBHP provider network to identify additional ways to reduce administrative costs so we can collectively support Idahoans.”
Magellan could not be immediately reached for comment.
The Department of Health and Welfare “has been working with managed care organizations to identify 4% decreases in their contracts,” agency spokesperson AJ McWhorter said in a statement.
How Idaho Medicaid’s mental health cuts work
On Oct. 2, Magellan notified Idaho Medicaid providers about the contractor’s cuts to pay rates for providers, which include 4% cuts to Diagnosis Related Group hospitals. That cut was made effective starting Sept. 1.
Starting Nov. 1, Magellan said the following cuts would take effect:
- 15% cuts to partial hospitalizations.
- 10% cuts to intensive outpatient care.
- 5% cuts to community-based American Society of Addiction Medicine, or ASAM, programs.
- 4% cuts to all other services on the contract, which is called the Idaho Behavioral Health Plan, or IBHP.
But some services would be excluded from the cuts, Magellan said, including:
- Tribal providers
- Children’s residential services
- Institution for mental disease hospitals
- Critical access hospitals, which are a designation for rural hospitals
David Lehman, a lobbyist for the Idaho Association of Community Providers and Cottonwood Creek Behavioral Hospital, said the impact of the cuts aren’t clear yet. He said he expects Health and Welfare will soon share guidance to providers.
But he thinks more cuts could come from the state.
“It is more likely than not that they’ll want to go deeper, or they’ll need to go deeper with cuts, if they’re not going to leverage the stabilization account that they have set up,” he told the Idaho Capital Sun in an interview.
Idaho Capital Sun is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Idaho Capital Sun maintains editorial independence. Contact Editor Christina Lords for questions: info@idahocapitalsun.com.
