Montana Administrative Register Notice 37-543 No. 16   08/25/2011    
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BEFORE THE Department of Public

health and human services of the



In the matter of the amendment of ARM 37.86.2224, 37.87.808, 37.87.901, and 37.87.903 pertaining to Children's Mental Health Bureau rate reduction







TO:  All Concerned Persons


            1.  On May 26, 2011, the Department of Public Health and Human Services published MAR Notice No. 37-543 pertaining to the public hearing on the proposed amendment of the above-stated rules at page 874 of the 2011 Montana Administrative Register, Issue Number 10.  On July 14, 2011, the Department of Public Health and Human Services published MAR Notice No. 37-543 pertaining to the amended notice of public hearing and extension of comment period of the above-stated rules at page 1290 of the 2011 Montana Administrative Register, Issue Number 13.


            2.  The department has amended the above-stated rules as proposed.


            3.  The department has thoroughly considered the comments and testimony received.  A summary of the comments received and the department's responses are as follows:


Comment # 1:  The department received several comments, including a letter from The Children's, Families, Health, and Human Services Interim Committee, concerning the draft fee schedule posted May 25, 2011, on the Children's Mental Health Bureau web site which appeared to reduce outpatient mental health therapy codes significantly more than the proposed 2% rate reduction.

 Several outpatient mental health providers expressed concerns that if the posted draft rates were implemented, the changes would adversely impact the mental health service system.  Several commenters expressed concern the rates would reduce Medicaid recipients' access to community-based outpatient mental health services, resulting in higher suicide rates, increased state hospital and psychiatric residential treatment facility admissions, and overall increased costs.  Most commenters were concerned specifically about psychotherapy rates.  Several commenters were concerned the rate would decrease the number of community-based therapists accepting Medicaid and MHSP.  A few commenters expressed concern that the rate reduction would result in mental health professionals losing employment.  One commenter was concerned that small providers would be impacted more than larger providers.

 Response # 1:  The department assumes commenters are referring to amended ARM 37.87.901 which incorporates the Children's Mental Health Fee Schedule.  The department posted the proposed Children’s Mental Health Fee Schedule on the Children's Mental Health Bureau web site on May 26, 2011, to provide adequate notice of the proposed Children's Mental Health rates.  The draft fee schedule was incorrect and reduced outpatient therapy services more than was intended by the department.  The fee schedule was withdrawn, corrected, and re-posted at www.mtmedicaid.org.  The department conducted a second hearing and allowed additional time for comment.  There were no attendees at the second hearing for this rule and the department believes the concerns have been addressed.

 Comment # 2:  Two commenters expressed concerns about the method the department used to communicate proposed reimbursement rates to providers.  There was confusion as to the location of the proposed fee schedule.

 Response #2:  The department assumes the commenters are referring to the proposed amendment to ARM 37.87.901 which incorporates the Children's Mental Health Fee Schedule.  For consistency, the department agrees the communication method for the proposed fee schedules could be improved and has agreed to post all proposed fee schedules at www.mtmedicaid.org.

 Comment # 3:  One commenter expressed the concern that providers who are not licensed mental health centers are excluded from providing mental health center services such as Comprehensive School and Community-Based Treatment (CSCT).

 Response # 3:  The department believes this concern is outside the scope of the proposed changes in MAR 37-543.

 Comment #4:  One commenter expressed support for the department's proposed rule change to eliminate the prior authorization and unscheduled revision requirements for Targeted Case Management services.

 Response #4:  The department appreciates the commenter's support for the proposed rule change.

 Comment # 5:  One commenter asserts current, not proposed, reimbursement rates for Medicaid services are well below those of other reimbursement sources for similar services.  The commenter contends that the department is out of compliance with 42 USC 1396a(30)(A) which states that the department must assure that payments are consistent with efficiency, economy, and quality of care, and are sufficient to enlist enough providers that care and services are available under the plan, at least to the extent that such care and services are available to the general population in the geographic area.  The commenter references the current Medicaid reimbursement for CPT code 90806 (individual psychotherapy), which is $57.26, as an example.  The commenter reports that for the same service, the Veteran's Administration reimburses $98.04, New West reimburses $80.77, Blue Cross/Blue Shield reimburses $70.78, New West Medicare reimburses $64.62, and Healthy Montana Kids reimburses $72.50.

 Response #5:  The department disagrees that current Medicaid rates have resulted in insufficient providers of that service.  The department studied CPT code 90806 (individual psychotherapy) utilization rates for state fiscal year (SFY) 2009, 2010, and 2011.  Given claims data, the department does not believe current Medicaid rates for CPT Code 90806 (individual psychotherapy) demonstrate a loss of access to individual psychotherapy.  From SFY 09 to SFY 10, the number of youth receiving individual psychotherapy increased 8.3%.  From SFY 10 to SFY11 the number of youth receiving individual psychotherapy increased 11.9%.  The department regularly reviews service utilization data for trends for all children's mental health services, including increased or decreased access.  The department does not believe access has been decreased due to the existing rate.

 Comment # 6:  One commenter described the department rate-setting methodology as arbitrary and capricious and asked the department to describe how Medicaid rates are determined.  The commenter asked if the department conducts surveys to determine rates or if budgetary concerns are the only factor in determining rates.

 Response # 6:  The proposed amendment to ARM 37.87.901 does not change the method of establishing rates but does reflect a change in the conversion factor.  The department assumes the commenter is referring to proposed amendment in ARM 37.87.901, which incorporates the Children's Mental Health Fee Schedule.  Children's Mental Health Bureau (CMHB) uses both the Resource Based Relative Value System (RBRVS) and cost studies to determine reimbursement rates.

 Outpatient therapy service rates are determined by the RBRVS.  The RBRVS is used nationwide by most health plans, including Medicare and most state Medicaid programs.  The system was developed by Medicare and implemented in 1992.  Since 1997 the department has used its RBRVS based fee schedule as the basis for paying almost all services provided by physicians, mid-level practitioners, therapists, and other individual practitioners.

 The relative value unit (RVU) component of the RBRVS system is revised annually by Centers for Medicare and Medicaid Services (CMS) and the American Medical Association (AMA).  An RVU is a numerical value assigned to each medical procedure.  RVUs are added for new procedures, and the RVUs of particular procedures may increase or decrease from year to year.  The department proposes to amend ARM 37.85.212 to adopt current RVUs.

 The department annually calculates conversion factors for allied services, mental health services, and anesthesia services.  These conversion factors are calculated by dividing the Montana Legislature's appropriation for Medicaid clients' health care during the upcoming SFY by the estimated total units of health care, expressed as total RVUs paid, to be provided during the upcoming SFY.  The resulting quotient is the conversion factor.  Given the above calculation, the mental health conversion factor is proposed to be at $22.23.  Non-RBRVS Children's mental health rates are determined by service specific cost studies.

 The 2% rate reduction of mental health services is due to provider rate increases that went into effect in FY 2010, were held constant in FY 2011, and were paid for with one-time-only (OTO) funding appropriated by the 61st Legislative session in 2009.  This OTO funding was not included in the base budget for FY 2012 and the funds were not appropriated by the 62nd Legislative session in 2011.  The net result is a rate decrease of approximately 2% for mental health service providers.

 Comment #7:  In the "Under 18 Years of Age Fee Schedule" one commenter objects to the Section 6 Fiscal Impact statement rationale which states that "these changes are not expected to have an impact on youth and families receiving Targeted Case Management (TCM) or outpatient therapy services."  The commenter asks how the department came to that conclusion.  The commenter also asked if providers were contacted with regard to the fiscal impact.

 Response #7:  The statement referenced in the comment was intended to reference the fiscal impact of removing the prior authorization requirement for TCM and outpatient therapy only, and not intended to reference the 2% provider rate reduction.

 The department recognizes there will be a fiscal impact for TCM and outpatient therapy services with the 2% rate reduction for TCM and outpatient.


The estimated fiscal impact of all the 2% rate reduction of these rules is:


                                    Total Cost                  State General Fund              Federal Match


9/1/11 - 6/30/12         ($991,309)                 ($335,162)                             ($656,147)


This rule amendment is estimated to impact 260 Medicaid providers and 10,500 Medicaid youth.


Providers were not contacted about the fiscal impact.  The department calculated the rate.

 Comment #8:  One commenter expressed concerns that the department chose to allow unlimited pharmacology visits and prescriptions and is proposing to decrease access to psychotherapy with rate reductions.  The commenter asserts psychotherapy is the most cost-effective, safe, and least invasive treatment for people with mental disabilities.  The commenter believes there is a recent increase in prescription medications use that is related to a decrease in the availability of psychotherapy services.

 Response #8:  The department thanks the commenter for the comment, but believes this comment is outside the scope of these proposed rule changes and does not agree that access to psychotherapy services will significantly decrease.

 Comment #9:  One commenter stated the 2% rate reduction takes children's mental health providers back to the 2008 rates.  The commenter says that given the 2011 Legislature's projected surplus of $150 million by mid-2013, and the newly projected fund balance surplus of $217 million released recently by legislative fiscal staff, there is adequate funding to not only have maintained rates at the current 2011 level, but to increase them as well.

 Response #9:  The 62nd Legislature would have had to appropriate funds to sustain the OTO 2% increase in provider rates.  The projected surplus and the legislative appropriation serve two different purposes.  Increased state revenues will not change the sums currently appropriated by the Legislature for the department's programs.





/s/ John Koch                                     /s/ Laurie G. Lamson for                              

Rule Reviewer                                               Anna Whiting Sorrell, Director

                                                                        Public Health and Human Services



Certified to the Secretary of State August 15, 2011


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