CMH_FINANCING_HISTORY_92807_7.doc - CMH FINANCING HISTORY...

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CMH FINANCING HISTORY SUMMARY OF 20 YEARS OF THE STATE FINANCING STRATEGY FOR CMH IT IS NOT ABOUT MEDICAID FUNDING IT IS ALL AND ALWAYS HAS BEEN ABOUT STATE FUNDING AND STATE SUPPORT FOR PUBLIC MENTAL HEALTH SERVICES PREMISE: By moving to community-based services, the CMH system has saved the State hundreds of millions of dollars and improved quality of services over the past 20 years HOWEVER Savings created by this movement were not retained in the CMH system to support consumers in the community Contents: Funding Strategy Highlights from past 20 Years (page 2) CMH Funding – Base Funding Reductions outweigh increases (page 4) State GF/GF for CMH – Economic Increases – Chart CMH Funding – GF & Medicaid in FY99 (page 6) Medicaid History – Highlights (page 8) Michigan’s Medicaid Health Plans – Observations (page 13) GAO/CMS Reports of concern (page 14) CMH State Funding Distribution (page 15) CMH Financing History – Detailed (page 17) This document was prepared by Judith Taylor on behalf of the Michigan Association of Community Mental Health Boards 1
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FUNDING STRATEGY HIGHLIGHTS FROM THE PAST 20 YEARS The state financing strategy for CMH for 20 years is based on a poor economic premise. CMH system has been expected to provide services with no state fund increases for unavoidable cost increases CMH system has been required to serve more needy customers with flat state funding The Advent of Medicaid federal funding for CMH services in 1983 allowed the CMH system to increase resources/services by expanding Medicaid, with the same or lower state funding In the 1980s the additional federal funds earned by CMHBs were used in the state appropriation to finance additional categorical services for targeted consumers thus limiting the resources for serving its priority community population Over 20 years the CMH funding base has received very few cost increases to support continuation of services Over 20 years the CMH state funding base has been eroded by state financing strategies Since 1983, DMB funding strategy has been to maximize federal funds and reduce or keep flat state funding CMHBs have been in partnership with the state in pursuit of other funds and being good managers of limited state resources, thereby saving the state hundreds of million in state funds. In the mid-late 1990s these options began to dry up for many CMHSPs as they had maximized Medicaid billing and maximized full management. Medicaid fee screens saw limited increases for cost increases in the 1980s, and in late 1980s the fee screens were frozen, even though the CMH system had the state match needed to cover the Medicaid cost. Thus, CMH used GF to cover these additional cost increases. In 1993, DMB instituted an annual fee screen adjuster for CMH Medicaid, which allowed some of the costs above fee screen to be billed to Medicaid, with the state keeping 80% of the additional federal funding. As of FY98, this was $35 million per year.
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  • Spring '12
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