Florida Could Have For-Profit Mental Health Services

by | April 1, 2015

By Mary Ellen Klas

The data on Florida's mental health problem tells the story: People whose mental illness goes untreated are more likely to be addicted to drugs, have children in the state's child welfare system, draw unemployment checks, and land in prison.

The total cost to taxpayers is unknown but, according to the Kaiser Family Foundation, Florida ranks 49th in terms of per capita spending on mental health.

After another year of tragic headlines, Florida legislators have proposed at least 22 bills that make the most dramatic changes to the state's mental health delivery system in decades. The proposals would change everything from the way the mentally ill are treated by law enforcement, doctors, child welfare workers and courts to the way the state matches federal mental health money. If successful, the state also would get $40 million more in federal Medicaid funds to cover mental health services for uninsured Floridians.

But there is a catch: The reform effort would also end the system's dependence on not-for-profit managed care providers and would open the door to for-profit managed care companies to compete for the $506 million in state business.

"We need to allow competition in the system,'' said Rep. Gayle Harrell, R-Stuart, who is sponsoring the House bill, HB 7119.

She said that the for-profit companies would have to follow the same "ground rules" as the not-for-profit organizations known as "managing entities," which now are required to spend no more than 5 percent on administration and devote the rest of the budget to mental health services.

The goal is to provide more performance-based payment of services, but the idea has drawn mixed reviews from mental health advocates. On one hand, they welcome the long-overdue update of the state's mental health delivery system. On the other, they question how a chronically underfunded system could have room for big companies to make profits.

"There is a belief by some that for-profits are better, but while they may be good at being cost effective, they are not very good at being treatment effective," said John Dow, executive director of the South Florida Behavioral Health Network, which is South Florida's managing entity.

Linda McKenna, executive director of the Central Florida Behavioral Health Network in Tampa, believes the proposal to update the laws, establish performance standards and collect data "is a step in the right direction" but "opening a woefully underfunded system to for-profits could make things worse."

She said, for example, that in addition to supplying $506 million in mental health and substance abuse services to the state's uninsured population, the not-for-profit system also provides $101 million in uncompensated care.

"Will for-profit companies do that?" McKenna asked.

Florida's current mental health delivery system is designed to provide services to some of the state's most vulnerable -- adults, children and the elderly who don't qualify for Medicaid but who also don't have private health insurance.

Under state law, there are seven so-called not-for-profit managing entities that contract with the Department of Children and Families to manage and pay for mental health and substance abuse services in their regions.

Under Harrell's bill, and a similar measure (SB 7068) proposed by Sen. Rene Garcia, R-Hialeah, the providers would be held to a new set of performance standards and data-driven metrics. Harrell's bill creates a study to determine how to write those guidelines; Garcia's bill moves ahead with it this year.

The bills also allow for more flexibility in funding to better leverage the limited resources to apply to more people.

In both of them, for-profit health care services and Medicaid managed-care companies would be allowed to bid on being the regional coordinators, competing against the managing entities that have been in business for just two years.

"What we're trying to do is bring more uniformity as to how we fund these programs across the state," Garcia said. "In the past, the providers that had the most pull got the most items funded. It's now time for them to compete based on the quality of the work that they're doing."

He said that as long as for-profits and not-for-profits are treated the same, both should have a role.

"There are for-profits that do a good job and there's not-for-profits that do a good job," he said. "If you can make a profit and still deliver the services and the quality is the same I don't have a problem with that."

The idea of privatizing mental health services was first proposed by Gov. Rick Scott, who included it in the proposed proviso language of his 2015-16 budget. Among the companies that could qualify to bid on the projects are some of the largest contributors to the governor's campaign.

For example, Sunshine Health, a Miami-based company that is the largest HMO provider under the long-term care portion of the state's Medicaid managed care program, could be among the companies that competes. It is owned by Centene Corp., which spent $762,000 in campaign contributions in the last election cycle, including nearly $300,000 to the Republican Party of Florida. The company gave another $175,000 to the Republican Governor's Association, which spent more than $20 million to re-elect Scott.

Another big donor to the governor and Republicans was Wellcare Health Plan, a Tampa-based company that also provides Medicaid managed care services. The company spent $227,000 in Florida during the 2014 election cycle and gave another $260,000 to the Republican Governor's Association. Spokeswomen for both Sunshine Health and Wellcare would not say whether their companies would be interested in getting into mental health care services if allowed under the bills.

Harrell's bill takes a more scaled-backed approach than the Senate plan by creating a study commission before establishing the performance standards. But her bill requires that at least two not-for-profits bid on each contract -- or the bidding process could be opened to for-profit companies and Medicaid managed-care organizations.

The Senate plan also would require the managing entity to implement the new standards or be disqualified.

Both the House and Senate say that whatever is passed this year will be just the first step in a multi-year process to update the state's mental health delivery system.

"It's a work in progress,'' Garcia said.

(c)2015 Miami Herald