The private agencies that provide regional mental health, substance abuse and disability-related services haven’t seen an increase in the Medicaid rates they are paid in several years. The nonprofit groups say those low reimbursement rates are undermining their ability to help Vermonters now and in the future.
The community-based groups have a difficult time paying a living wage and retaining staff who are on the front lines of drug and mental health treatment, according to a white paper from Vermont Care Partners, a network of the 16 “designated agencies” in Vermont.
Most of the agencies have high staff turnover rates attributed to low wages. The impact spills over onto patients in the form of waiting lists that sometimes number in the hundreds and more reliance on less experienced workers, according to the report.
The report says that if “chronic underfunding” continues, it will have a long-term impact on the sustainability of the community-based health system. Underfunding is seen as potentially leading to increased rates of homelessness, incarceration, substance abuse and addiction.
The paper focuses on designated agencies and specialized service agencies — a network of nongovernmental entities that the state contracts with to provide mental health, substance abuse and developmental disability services at the community level.
Approximately 85 percent of the funding for designated agencies comes from Medicaid, according to the paper. In 2012, total statewide revenue for designated agencies was $354.4 million, according to the Green Mountain Care Board.
According to a January report by the board, the agency network employed or contracted for services with 13,000 employees across the state in fiscal year 2015 and served more than 35,000 clients.
The exact amount that health care providers receive under Medicaid, which is a combination of federal and state money, is determined in part by the Legislature.
The reimbursement rate increased 0.22 percent in fiscal year 2016, but the white paper says there has not been a commitment to cost of living increases since fiscal 2008. The paper says the state does not annually increase Medicaid reimbursement rates, and employees of the network agencies cannot count on annual pay raises. That’s in contrast with employees of hospitals or the state, where annual raises are fairly typical.
The lack of regular cost of living increases for agency staff and underfunding has “brought our workforce to a breaking point,” the white paper says.
Jena Trombly, human resources director at the Clara Martin Center in Orange County, who helped write the report, said staff retention issues directly affect services.
If staff are constantly leaving for higher-paying jobs, it “delays (a client’s) recovery process to become contributors back to society,” Trombly said.
The Clara Martin Center often hires interns pursuing a master’s degree, Trombly said. After they finish their studies, workers may stay on to accumulate the hours needed to complete a licensure requirement. But shortly after that, they often leave for a position with the state or at a hospital, where they’ll do similar work for significantly higher pay.
As of December, about a quarter of the employees in the designated agency system made less than $13 an hour, according to the paper.
Trombly said the Clara Martin Center tries to offset the lower salary by offering other perks such as flexible scheduling.
“Really, no matter how creative we are, a lot of it comes down to a paycheck,” Trombly said.
Since fiscal year 2013, staff turnover in the community health system has consistently been above 27 percent a year. That’s nearly twice the turnover rate for the Department for Children and Families, the Mental Health Department, and the Department of Disabilities, Aging and Independent Living, according to the paper.
While Gov. Jim Douglas was in office, the agencies had rate increases for three consecutive years. At that time, staff turnover was 19.5 percent annually, according to the report.
For the fiscal year so far, Trombly said, the Clara Martin Center turnover rate is already around 20 percent. Trombly said that as far as she knows, the turnover rate has never been “quite that extreme” before.
The Clara Martin Center works with Central Vermont Addiction Medicine, one of the state’s opiate addiction treatment hubs. Staff retention there has been a particular struggle, she said.
The clinic recently lost three of a total of 10 clinicians — each of whom serves 40 to 50 clients. Clinicians leave because they can earn about $20,000 more each year doing the same work at a hospital, Trombly said.
When one doctor leaves the clinic, the other clinicians take on several dozen more patients, causing a backlog in the treatment system, she said. Currently, 48 people are waiting for treatment at Central Vermont Addiction Medicine.
“It’s like steady erosion of our system that just isn’t sustainable,” Trombly said.
The white paper says that constantly changing treatment teams and high caseloads may mean more patients end up in hospital emergency rooms because of a crisis.
It also makes it difficult for clients to maintain relationships with therapists and clinicians who are helping them in recovery.
“We cannot measure the impact of rebuilding trust, especially for those recovering from trauma, but the overall impact is an ever lengthening duration of healing and recovery which in turn drives an increase in the cost of service delivery,” the white paper says.
Julie Tessler, of Vermont Care Partners, said the group is requesting that Medicaid rates be increased 3 percent in each of the next five fiscal years, starting with 2017.
The issue is familiar to the Shumlin administration. Last year, Gov. Peter Shumlin proposed a 0.7 percent payroll tax that would have gone in part to increase Medicaid rates, but the idea didn’t make it through the House.
“We didn’t see that it would have any more success this year than last, so we decided to try something that was not quite as ambitious,” Secretary of Administration Justin Johnson said Tuesday.
This year the governor is proposing a provider tax on independent doctors and dentists, with part of the revenue going toward raising Medicaid reimbursement rates.
“We all recognize the cost shift and the low rate is a problem just generally in the system,” Johnson said.
Human Services Secretary Hal Cohen said the designated agencies are important not just for the mental health aspects of the services they provide, but also for the other help they offer, such as case management and support for people finding housing and jobs.
“They play a really important role in our health system,” Cohen said.
Cohen tied the issue to the administration’s broader efforts to look at payment reform in health care. The question might be bigger than just looking to give a raise in the near future.
“Not just changing rates, but changing how we pay for things,” Cohen said.
The Green Mountain Care Board’s January report on designated agencies put the budget of Howard Center, an agency in Chittenden County, under the microscope.
The report came to a similar conclusion as the white paper.
“Despite its responsible budgeting practices, as presently funded the agency struggles mightily to recruit and retain the staff it needs so it can meet its programmatic and statutory mission,” the report states. “In spite of those challenges, it is equally clear to us that Howard Center provides great value to the community through the dedication and skill of its staff and management.”
Rep. Peter Fagan, R-Rutland, said he has concerns that the high turnover in the agency network indicates the state may be losing the ability to serve people at a community level.
If the community-based system fails, Fagan said, the responsibility falls back to the state — which he expects will come with a higher price tag overall.
“Are we strangling the system by asphyxiation here, slowly?” Fagan asked.
Fagan said he believes there is enough money within the state’s total $5.2 billion budget to adequately fund the community-based health system. Some programs should be “chopped” to fund the necessities, he said.
“We need to prioritize to get it all done,” Fagan said.