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Investments in Behavioral Health Service Systems: Top Three Emerging Themes from State Home and Community-Based Services Spending Plans

States, taking advantage of federal flexibilities and new federal funding, are implementing policy changes that seek to increase availability of and equitable access to behavioral health services. In anticipation of the one-year, 10% increase in the federal medical assistance percentages (FMAP), provided by the American Rescue Plan Act (ARPA), states have submitted spending plans to the Center for Medicare and Medicaid Services (CMS) outlining how they intend to use these one-time funds to invest in home and community-based services (HCBS) that aim to keep individuals out of high cost institutional settings. These proposals reveal priorities across states for investing in home in community based behavioral health services.

State behavioral health systems have been experiencing multiple challenges since before the onset of the COVID-19 pandemic: the opioid crisis is ravaging communities, mental health crisis services are not sufficiently available, and behavioral health systems face serious staffing shortages. The pandemic has brought these crises into focus. Since 2019, more than half of states saw a more than 30% increase in overdose fatalities, emergency department visits for suspected suicide attempts by teenagers and young adults increased by 31%,  and according to the Centers for Disease Control and Prevention (CDC), 40% of adults surveyed this spring reported struggling with their mental health or substance use. This accelerated demand for behavioral health services and the heightened risks of working in healthcare settings during the pandemic have left states facing staffing shortages, in some cases so severe that institutional settings are experiencing full on crises. Five of Virginia’s state mental health hospitals temporarily suspended admissions in July, Oregon’s state hospital saw a 45% increase in direct-care staff on COVID-related leave between February and March of this year, and New York Governor Hochul declared a statewide disaster emergency due to healthcare staffing shortages in September. As such, states and the federal government are preparing to make considerable financial investments in home and community-based services, to both relieve stressors on institutional settings as well as to provide comprehensive behavioral healthcare at an accessible delivery point to Medicaid members.

Additional ARPA Funding Opportunities for Crisis Response

• 9813 provides a state option for a five year, 85% enhanced FMAP for mobile mental health crisis response services through a SPA or waiver.

• CMS awarded planning grants to 20 states to support the implementation of mobile crisis services eligible for the new Medicaid option

• 2701 and 2702 provide $1.5B in additional funds for Community Mental Health Block Grant and $1.5B for Substance Abuse Prevention and Treatment Block Grants.

• Sec 2703-2709 provide additional funds for training, public education campaigns, and community SUD and BH services, etc.

Developing and Enhancing Mobile Behavioral Health Crises Response

Through ARPA, states see an important opportunity to improve behavioral health systems, with a particular interest in enhancing crisis response systems.  Several state HCBS spending plans propose to use funds to develop and expand the capacity of mobile crisis response, and some states plan to use these funds to bolster supports to specific, underserved populations. West Virginia and New York’s propose expanding existing mobile crisis capacity to better serve individuals with intellectual disabilities, while Michigan and Washington plan to build out crisis response for children. Other states propose using funds to add crisis stabilization units and to use ARPA funds to implement 988, a nationally-accessible hotline for people in suicide and other mental health crisis situations, established by the National Suicide Hotline Designation Act of 2020.

Updating Technology and Data Infrastructure

State HCBS spending plans underscore the need to improve technological capacity in HCBS systems. Several states propose extending facility-based data such as admissions, discharge, and transfer notifications to HCBS providers; others, including Alabama, Maine, New Jersey, and Texas plan to provide grants to providers and/or families for assistive technology and broadband access. Several states, including Colorado, plan to connect and share data across state agencies and/or among providers to better track and coordinate services for the HCBS population. Similarly, Georgia plans to develop a comprehensive case management platform for all HCBS populations that would include a dashboard for outcomes and reporting, streamlining data collection and usage. Georgia also builds in funding to train staff on new technology. New Jersey proposes using funds to develop a public facing registry, to allow members and families to access information on their waitlist status, available services, wait times.

Investing in the Behavioral Health Workforce

State HCBS spending plans reflect widespread and increasing shortages in the behavioral health workforce. States propose multi-faceted approaches: a handful of states seek to implement permanent rate increases for some sectors of the HCBS workforce, and North Carolina, Minnesota, Vermont, New York, and others plan to raise rates for mental health and substance use disorder (SUD) providers specifically. As a shorter-term strategy, other states are taking a specialty pay approach, building in one-time hiring and sign-on bonuses for behavioral health and other direct care workers. States are also planning to allocate funds for training staff to encourage specialization in behavioral health, or to develop specific skills particularly in-demand in the field. For example, Iowa plans to provide training and scholarships for Crisis Response and Behavioral Health Technician certification. Michigan plans to provide loan forgiveness and internships for students in behavioral health who commit to working in behavioral health shortage areas.

COVID-19 and its related risks in institutional settings have heightened the need for care in the community for people with significant behavioral health needs. State ARPA spending plans reflect the tremendous demand for behavioral health services across states, as well as the growing need to address workforce and build more technological capacity for a sector that has long lagged behind physical health systems. Nearly all state HCBS spending plans have been conditionally approved by CMS, final versions are likely to change in response to CMS comment and guidance.

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