No funding? No mental health services

Healthcare set for another upheaval in reimbursement; schools caught in the middle

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Mental healthcare spent decades ignored or minimally funded. In Indiana, most of the mental hospitals closed before the 21^st century had time to get rolling. And state and federal dollars for healthcare have been stagnant for generations,

It’s a problem with no easy solution, but for Taylor Schools it’s about to get worse. Like many schools in Indiana, it struggles to provide behavioral counseling to the students. According to superintendent Steve Dishon, Taylor used federal funds related to COVID relief to underwrite the hiring of behavioral health specialists in each of its schools. But that funding comes to an end at the conclusion of the current school year.

“That has supplied us with three behavioral skills specialists -- one in each of our buildings -- and that has been an amazing resource for us,” said Dishon. “But next year, we don't know if we're going to be able to have behavior skill specialists in our schools. We don't know if we can afford that without the funds.

“We have a memorandum of understanding with a local provider for mental health, and those costs are going to go up. They're going to triple next year. We're not sure what we're going to do. We definitely have to reach out and look for every opportunity to get help for our kids in the school.”

Dishon explained that no new funding has been appropriated by the Indiana Legislature in the current budget cycle to address behavioral health. So, Taylor will have to get creative to address a growing mental and behavioral health problem.

Those options, however, are diminishing.

Funding changes ahead

At the Howard County Board of Commissioners meeting on Feb. 19, representatives from Community Fairbanks, the mental health and addiction services arm of Community Howard Regional Health, gave their annual report. The hospital wrote off more than $1.3 million in bad debt and charity care in 2023. At the same time, the number of acute care admissions rose, and the hospital increased its intensive outpatient services.

Howard County Commissioner Jack Dodd asked the representatives about a new federal funding formula under consideration by state of Indiana and how it might impact services provided locally. According to George Hurd, vice president of Behavioral Health and CEO of the Howard Regional Community Mental Health Center, things would be better for healthcare providers under the proposed formula.

“Behavioral health would no longer be paid a fee for service at a certain rate,” said Hurd. “We'd be paid for the actual cost of the care delivery.”

The change sounds good on the surface. A similar structure has been adopted in other states, such as Missouri and Arizona, and in those cases, the number of behavioral healthcare providers increased. Since the providers are paid for the actual costs they incur, more providers crop up, offering more services.

But it’s a shuffling of existing funding, not a new revenue stream. Since Medicaid and Medicare reimbursement rates haven’t been adjusted in nearly 30 years, they don’t keep pace with the cost of delivering services, Hurd explained.

“The largest proportion of our clients that we serve are government payers, Medicaid and Medicare,” said Hurd. “Obviously, those rates no longer keep up with the costs of actually delivering that service.”

Still, with compensation matching the service, and more providers coming to the table, it sounds like a solution that could positively impact the situation facing Taylor and other schools in Indiana. But it likely won’t work out that way.

As Hurd explained, the state requires that any changes in Medicaid funding remain budget neutral. No new money will be allocated. Something has to lose in order for the new reimbursement formula to win.

“A year ago or so, I spoke about House Bill 1004 and how that was going to affect some hospitals and their funding,” said Hurd. “It targeted five or six of the largest healthcare systems in the state; Community Health Network being one of those. (The legislature) did significantly cut funding.

“As a result of that, we are making adjustments where we can to do what the legislature has asked us to do, which is quite simply bring the differential between what we charge commercial insurance and what we charge government payers within a certain percentage.”

Treatment worse than the disease?

The simplest solution, Hurd said, was to reduce the amount of uncompensated care the hospital provides. The cost doesn’t get passed on to the commercial insurers, but fewer people at the bottom of the socioeconomic ladder will receive services.

“We’re just trying to right-size,” said Hurd.

Unfortunately, schools are at the top of the losers list in this whole process. Taylor will have to figure out how to keep services in the schools when the providers are no longer interested in serving those without resources.

“We have certainly contacted a number of the schools where we're providing care, not only behavioral health, but some other services as well,” said Hurd. “We’re letting them know that we would either need to have some assistance in covering the cost of delivering the services, or we'd have to consider adjusting the services we deliver or possibly ceasing those services.”

Since the schools face similar restraints on their revenue, alternatives will need to be found. As a replacement measure, Taylor has introduced a brain-based learning activity for the students each day. Working with a program from Butler University, the students watch a video about emotional development and how to cope with things like trauma, and then they discuss what they have seen.

Dishon said that intervention is showing some positive results, but it isn’t a complete substitute for having specialists in the school, ready to respond to children’s needs.

“We've had some good success; we are definitely on the right trajectory,” said Dishon. “Still, last semester we had 279 instances of classroom disruptions, 169 acts of defiance or insubordination with teachers, and 61 acts of physical aggression at the middle school, typically between students.

“Our behavior specialists noted that the affected kids struggle with family dynamics, absentee parents, and a lot of conflicts with their peers, because they don't know how to handle any kind of disagreement. It typically will turn into something physical. And they were very disrespectful to each other and to teachers.

“You can see that there's a great need. Next year, when that funding goes away, honest to goodness, we don't know what we're going to do.”