As Mentally Ill Fall Through Net, Insurers Asked to Take Up Slack

Innovative government projects might point the way toward how plans can save money while addressing a growing public policy concern

Andrew Sperling, JD, director of federal legislative advocacy for the National Alliance on Mental Illness, insists that our society knows what mental health services are effective — “medication, assertive community treatments, supportive housing, supportive employment, and family education. These methods work — we have validated evidence. And yet, mostly we don’t use them, and the result is that millions of Americans with severe mental illness do not get appropriate care.”

An estimated 6% of Americans have severe mental illness, defined as bipolar disorder, severe depression, or schizophrenia. But for Americans with mental illness of any kind — meaning not just severe — we fail to provide appropriate care. Former Rep. Patrick Kennedy told USA Today writer Liz Szabo that in the United States, we routinely fail to provide basic services for people with mental illness. Imagine the outcry if patients with cancer or other physical conditions lacked basic care, Kennedy said (see “A Separate and Unequal System: “People with Mental Illness Face Legal Discrimination” (

“We know what to do; we just fail to do it most of the time,” says Andrew Sperling, JD, of the National Alliance on Mental Illness. “We fail to do what is necessary for people with severe mental illness.”

In the resulting article, Szabo explained how Medicare and Medicaid laws have contributed to unequal treatment when it comes to people with mental illness. Medicaid law specifies that funds may be used for hospitals treating physical conditions but generally not for mental health, she wrote. Pennsylvania Republican Rep. Tim Murphy has introduced legislation to ease those restrictions.

Medicare law discriminates against people with mental illness by limiting the number of days patients can receive inpatient psychiatric care. No such limits are imposed for physical health, Szabo reported.

Lacking adequate care, people with mental illness often are jailed or commit suicide. “We know there are 38,000 suicides every year,” Sperling adds, “and 90% of them involve mental illness. We also know that many people with mental illness are serving time in prison or in jail, which is a very costly way to house these people.

“Generally, for nonviolent offenses or offenses against property, the courts will not send people to jail,” says Sperling. “But for violent felonies, they’ll send you to state prison for five years, and many of the people who end up in that system have some sort of mental illness.

“One of the biggest burdens on society tends to be people with untreated mental illness who commit petty crimes, destroying property or disturbing the peace,” he adds. “They end up with short stays in the criminal justice system, which is frustrating for the police, prosecutors, judges, and corrections departments because these people clog the system. Because the expense of caring for these people is so high, some states and cities have set up their own separate judicial systems just for people with mental illness.”

Overcrowded jails

In Miami-Dade County, Florida, the county jail is also the largest psychiatric facility in the state, according to a report by the 11th Judicial Circuit Court of Florida (see “Criminal Mental Health Project,” Among urban areas nationwide, the county has the largest percentage of residents with serious mental illnesses (9.1% of all residents, or 210,000 people), the court said. Only about 13% receive care in the public mental health system. “As a result, law enforcement and correctional officers have increasingly become the lone responders to people in crisis with untreated mental illnesses. On any given day, some 1,200 people incarcerated in the Miami-Dade County Jail (about 17% of the jail’s population) have severe mental illness,” the court reported. Providing for this population costs taxpayers more than $50 million annually.

For 14 years, Eleventh Circuit Court Judge Steven Leifman has headed a project to train police officers and 911 operators to identify signs of mental illness and provide these people with medical care, rehabilitation, housing, and other services as needed. Similar programs are operating in other cities, but the Miami-Dade program is considered one of the most successful.

“We actually closed one of our local jails last year because of the program’s success,” Leifman told the Los Angeles Daily News in June (see “Los Angeles County Looks at How to Handle Mentally Ill Inmates in Jails,” The closure saved the county over $12 million a year.

Role for health plans

Sperling believes managed care insurers have an important role to play, particularly in Medicaid.

“Health plans are definitely part of the solution,” he says. “They can’t fix the whole system, but they have a significant contribution to make, particularly when states increase funding in Medicaid managed care contracts for programs that provide peer support, community treatment, and family psychological education for these people. When states fund these programs, the results are positive.” But not all states use Medicaid funds to care for beneficiaries with mental illness.

In the Protecting Access to Medicare Act (PAMA) of 2014, which President Obama signed on April 1, Congress authorized two programs to improve mental health services. One is a demonstration program, beginning in 2017, that will establish certified behavioral health clinics in eight states.

“It will establish standards for what will be called federally qualified behavioral health centers,” says Sperling. “These centers will emulate what’s done in federally qualified health centers, but for people with mental illness, by providing them with case management, peer support, and some kind of housing, for example. It also establishes a prospective payment system for these centers.”

The other program would establish a four-year initiative to award as many as 50 grants each year to entities establishing assisted outpatient treatment (AOT) programs for people with serious mental illness. Congress authorized spending $60 million for four years, beginning next year.

“This provision would be for people at the severe end of the spectrum who don’t come voluntarily to services and who might need court-ordered treatment,” says Sperling. “It’s a pilot AOT program for patients with severe mental illness. There are laws in 45 states that require such treatment, but many of those states don’t require AOT, which is for people who have failed to engage in treatment. This is not about putting people into institutions. It’s about mandatory treatment in the community.”

If these programs are successful in treating people with mental illness appropriately, they may save money and could encourage health plans to adopt similar strategies, Sperling argues. In July, for example, Florida became the first state to offer a Medicaid health plan designed exclusively for people with serious mental illnesses, according to Kaiser Health News (see “Florida Tries New Approach to Mental Health Treatment,”

“Mental illness is a big driver of Medicaid costs because it is twice as prevalent among beneficiaries of the public insurance program for the poor as it is among the general population,” wrote Phil Galewitz, a staff writer for Kaiser Health News. “Studies show that enrollees with mental illness who also have chronic physical conditions account for a large share of Medicaid spending.”

So, we know what to do. In some places, it seems that we are starting to do it.


HealthIMPACT Southeast Tampa, FL January 23, 2015

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