State Delays Move to New Medicaid Payment Model for Mental Health Services

Some organizations that provide behavioral-health treatment for New Jersey’s poorest residents welcomed the state’s decision to slow the transition to a new government payment model, giving them time to better protect these vulnerable patients as the decades-old system evolves.

But others said they remain concerned that the state’s proposed Medicaid reimbursement rates for certain mental health and addiction services are still too low to cover the actual cost of treatments. These providers are concerned that the new system could leave them with multi-million dollar budget shortages and force them to cut programs that will leave up to 20,000 patients statewide without consistent, quality care.

The Department of Human Services announced last week that, based on detailed concerns raised by several providers, the state would allow some providers to delay for six months the move to a Medicaid fee-for-service reimbursement system, in which the government repays organizations for the specific treatments provided. Most providers now have “deficit funding” contracts that require DHS to cover any budget gaps after they collect from all other sources, including county payments, foundation grants, and patient fees.

According to a letter DHS issued Thursday, mental health providers now have the option of delaying

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