New Reimbursement Model, Federal Health Law Could Decimate NJ’s Community Mental Health System

May Is Mental Health Month; May 4th Is National Children's Mental Health Awareness Day

For decades, community-based mental health agencies have been enhancing the quality of life for individuals of all ages throughout New Jersey. As a result, these individuals are managing mental illnesses; achieving other goals, such as employment, higher education and strengthened family relationships; and greatly reducing or even eliminating their needs for treatment in emergency rooms and hospital inpatient units. However, without sufficient funding for the community-based providers, these services could be lost and the individuals would be at risk of experiencing health complications that would require much more costly treatment.

"Tens of thousands of New Jersey residents will be at risk of losing services and the inspiring progress they have made if community-based providers are not supported with safety net funding as they transition from contracts to fee-for-service reimbursement. Some of the fee-for-service rates are inadequate, forcing many providers to determine if they need to eliminate or significantly reduce any of their services," said Debra L. Wentz, Ph.D., President and CEO of the New Jersey Association of Mental Health and Addiction Agencies (NJAMHAA), which represents 160 organizations.

"These risks are greatly compounded by the possible repeal of the federal Affordable Care Act and its proposed, inadequate replacement," Dr. Wentz added. The Affordable Care Act expanded Medicaid and other insurance coverage for hundreds of thousands of New Jersey residents, and requires that mental health services - as well as substance use treatment, which 60 percent of individuals with mental illnesses also need - are covered at equal levels as medical and surgical care.

"The Medicaid expansion and fee-for-service reimbursement in New Jersey rely heavily on the enhanced federal match for Medicaid. If this funding is lost or significantly reduced, the current system of care would be decimated," Dr. Wentz said.

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