Oregon State Hospital Wants Patients to Keep Medicaid Insurance

Currently, people lose their Oregon Health Plan coverage when they enter the state mental hospital and must wait to have their insurance reinstated upon discharge. A change in law could provide a boost to CCOs, since they can’t be billed for care received in the state hospital.

Oregon State Hospital officials have a new strategy for ensuring patients do not have to worry about their health insurance when they leave -- never cutting off their Medicaid coverage in the first place.

Federal Medicaid rules do not allow for the state to bill the program for care for adults 22 to 65 years old in institutional settings, but Oregon State Hospital interim Chief Financial Officer Eric Price said he believed they can keep them in the Medicaid program so long as they do not expect to be compensated for their work.

“The change will allow the agency to offer a better continuum of care and to help with the discharge plan and case management,” Price told the Senate Health Committee on Monday.

The Legislature has passed a number of bills to require that people are assisted with health insurance when they leave jail, prison or the state mental hospital, but those measures evidently have fallen short.

Current law severs Medicaid coverage when patients are admitted the state mental hospital, requiring them to sign back up when they leave the hospital, which may require them to enroll in a different coordinated care organization as well as start all over again finding providers outside the hospital walls.

The Oregon Health Authority processing of Oregon Health Plan applications may also take several weeks.

“It takes so long for them to get back into their Medicaid, it can even delay them getting into immediate follow-up care,” said Sen. Laurie Monnes Anderson, D-Gresham.

Senate Bill 1549 removes the barrier in state law that requires the state hospital to suspend the coverage. In theory, that would mean patients could  go into a step-down care setting such as a group home as soon as they are ready to leave the hospital, if an opening were available, and not have to wait for OHA to approve a new Medicaid application.

Price testified that the insurance disruption that mental patients face is delaying them from leaving the hospital and keeping other patients from being admitted. He said that despite an assumption that patients may stay years, less than 3 percent of their patients stay longer than 133 days, or about 4.4 months.

The Oregon State Hospital has been inundated with criminal defendants who are sent there for treatment that allow them to stand trial. Many of these cases are for petty misdemeanors that would be dismissed in court if defendants were of sound mind. And once they enter the hospital, under current state law, they lose their Oregon Health Plan coverage and have to wait to get reinsured.

The so-called “aid and assist” patients facing criminal trial stay on average just 10 weeks, just over half the time of civil commitments and much less than people found guilty of crimes except for insanity, who do often stay for years.

The statutory change in SB 1549 could provide a boost to the state’s coordinated care organizations, who may receive a premium for these members without paying for the treatment at the state hospital, which is not allowed under federal law.

Sen. Elizabeth Steiner Hayward, D-Beaverton, told The Lund Report it was not her intention to keep these patients on the CCO rolls, but the Oregon Health Authority is still analyzing the legislation’s effect on the Oregon Health Plan and Price said the intent of the bill is to maintain “Medicaid benefits and CCO coverage.”

The CCOs are tasked with ensuring population health, not just the health of individuals, and would be expected to coordinate the costly care of these people once they leave the state institution.

“The purpose of SB 1549 is to address gaps in continuity of care that currently arise when OHP members are admitted to the Oregon State Hospital and lose Medicaid eligibility,” said OHA spokesman Robb Cowie. “The bill would allow OHA to continue Medicaid coverage. We are examining what this change would mean for the role CCOs and providers play pre- and post-discharge and how they would be reimbursed for those services.”

Reach Chris Gray at [email protected].

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