Nebraska mental health care providers say changes put 'poorest of poor' at-risk

Behavioral health providers across Nebraska say a change intended to expand federal health insurance coverage of mental health care has instead put vulnerable patients at risk of losing services.

In expanding Medicare’s coverage to some behavioral health services like licensed independent mental health practitioners (LIMHP), providers say the reimbursements they were receiving through Nebraska’s Medicaid program have been slashed dramatically.

That has produced a 50% loss in payments for individuals that qualify for both Medicare and Medicaid — so-called “dual eligible” individuals — resulting in losses of thousands of dollars to providers across the state.

In turn, those providers have been forced to reduce the number of times they see dual eligible patients, put those individuals on waiting lists or cut off services to them altogether.

“Especially for our rural providers, this is a hit to their finances, which is causing many to reevaluate how they will be able to continue serving this population,” said Annette Dubas, the executive director of the Nebraska Association of Behavioral Health Organizations.

Annette Dubas

Annette Dubas

Many of the providers struggling most are working in rural areas of Nebraska, often with the “poorest of the poor” who cannot otherwise get the help they need, said Dubas, a former state senator from Fullerton.

The problem with how providers are able to be reimbursed was identified more than a year ago, Dubas said, although federal officials chalked it up to “unintended consequences.”

Beginning in January 2024, Medicare expanded the number of behavioral health providers it would reimburse to make those services more accessible to a greater number of people nationwide.

But in Nebraska, adding more masters-level counselors to the services it would reimburse for ended up having the opposite effect for individuals enrolled both in Medicare and Medicaid when the program took effect in the state on July 1.

Nebraskans who were “dual eligible” — those over the age of 65 or with a qualifying disability who are also low income — found their reimbursements for behavioral health services were roughly half of what they were before.

For example, before the federal change took effect on Jan. 1, a licensed independent mental health practitioner would bill Medicaid $187 for one hour of therapy provided to a patient enrolled in both safety net programs.

Since Jan. 1, those providers are now required to first bill Medicare, which pays roughly 80% of a maximum reimbursement of $95 for one hour of therapy. The provider can then bill Medicaid, which picks up the remaining 20% of the cost.

Taken together, the provider is paid a total of $95, well below the $187 they were receiving per patient in prior years, providers say.

The change in how behavioral health services were reimbursed for dual eligible Nebraskans came as a shock to Mandy Price, a licensed independent mental health provider and owner of Inspirit Counseling in Chadron, who said it was not communicated clearly to providers.

After continuing to bill Nebraska Medicaid for services rendered to dual eligible patients, Price said she learned through a July 15 letter that she should have first sent the bills to federal Medicare.

Medicaid demanded Price repay nearly $10,000 that was paid out in error for dual eligible Nebraskans seeking treatment at her business as she worked to jump through the hoops in order to be able to submit reimbursements to Medicare over the next three months.

“I worked really hard to get credentialed with Medicare, and as soon as I was able to get credentials, I tried to rebill all of those claims,” Price explained, “but they did not get repaid.”

To compound matters, Price said Inspirit Counseling had to make difficult decisions about the 30-35 patients who were dual eligible. Some providers decided to keep seeing patients on a pro bono basis, while others had to terminate their patients’ treatment.

At another clinic in the Panhandle, Price said some mental health providers went four months without getting reimbursed: “We’re having this struggle out here, too, it’s not just the more populated places in Nebraska.”

John Day, executive director of Blue Valley Behavioral Health, which operates in 16 counties in Southeast Nebraska, said the state’s largest outpatient behavioral health provider has also felt the squeeze.

Jon Day

Jon Day, executive director for Blue Valley Behavioral Health

More than 200 patients who receive services from Blue Valley Behavioral Health are dual eligible, Day said, which has resulted in a $50,000 loss in reimbursements to providers working with populations in Lincoln and the surrounding area.

More than 50 others who would qualify are now on a waiting list, he said.

Day and others have urged officials with the Department of Health and Human Services to file a state plan amendment in order to raise the reimbursement rate for behavioral health services, but say they have been met with resistance.

Raising the reimbursement rate would allow providers to be paid what they were before the change to Medicare, Day said, while also realizing savings for the state, albeit to a lesser extent than what is being saved now.

"There's one little thing that was broken," Day said. "We just need to fix this one little thing."

In an emailed response, the Department of Health and Human Services disputed Day’s assertion that the state saw what Day said was estimated to be $1 million in savings and decided not to act.

“The decision was not for cost savings,” a spokesman for the department said. “It was to ensure parity for payment and fairness in the process of our payment system.”

Clinical psychologists, who are highly trained and experienced, have always had to bill through Medicare first, the department said: “Aligning reimbursement rates for LMHPs and other mental health professionals to that of clinical psychologists brings stability to the payment system.”

Day said other services’ Medicaid reimbursement rates were not necessarily affected by the change made to services covered by Medicare this year, however.

“Ours was the only one that changed, right?” he said. “No other providers were affected by this. We were the only ones that were.”

Dubas said NABHO is working with state lawmakers to introduce legislation in the coming session.

But if left uncorrected, Dubas said the lower reimbursements could have further implications as more providers leave centers across the state for offices where the reimbursement rates are higher.

“When you start cutting back on services, how does that ripple out to other areas across the whole continuum?” she asked.

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