As Need for Mental Health Care Surges, A Funding Program Remains Underused

Photo by iStock/fizkes.

The need for mental health services has surged during the COVID-19 pandemic, increasing pressure on California’s already beset mental health care system.

Yet one source of funding that could potentially help counties meet the demand for mental health care remains underused more than a year after the California Health Report first drew attention to the issue.

Counties can be reimbursed for providing mental health services to low-income residents through several state and federal programs. One is called Mental Health Medi-Cal Administrative Activities, or MH MAA, which provides funds for people enrolled in Medi-Cal, the state’s low-income health insurance program. 

More than a third of Californians are enrolled in Medi-Cal. Claiming more administrative funding could increase counties’ mental health budgets by millions of dollars, freeing up other money for direct mental health care, said Alex Briscoe, a former director of Alameda County’s health agency who now works as a consultant to counties interested in increasing their administrative claims. 

But very few counties participate in the program, state data shows, and those who do mostly claim only small amounts. 

Out of California’s 58 counties, only 15 claimed MH MAA funds for the 2019-20 fiscal year. Among those who did, most received a tiny fraction of the total statewide reimbursement of $41.7 million. A few, including Fresno, San Mateo and Santa Clara counties, did claim substantially more compared to four years ago, but most counties increased their reimbursements only modestly. Some, such as Sonoma, San Diego, Orange and Los Angeles counties — actually claimed less in 2019-20 than they did four years prior.

One notable exception is Alameda County, which has a history of maximizing MH MAA funding. The county, including the city of Berkeley, increased its claims from about $4 million in the 2016-17 fiscal year to over $24 million in 2019-20, accounting for more than half of statewide reimbursements last year. 

Each year, counties can opt to claim back some of the money they or their contractors spend on certain administrative work for mental health care by applying for the federal reimbursement. Counties can claim these funds for program administration, planning, referring people experiencing a mental health crisis to services, and helping people apply for Medi-Cal benefits.

Some county officials contacted by the California Health Report said that applying for the reimbursements is too complex and time consuming. They were also concerned about an increased risk of auditing from the state. Others considered the program inapplicable or irrelevant for their counties, because they can claim most of their administrative costs through another, simpler reimbursement program.

“Not only is it very burdensome to claim … but the state has tightened rules around claiming, increasing the burden around claiming and the audit risk,” said Jeffrey Nagel, Orange County’s deputy agency director of Behavioral Health Services, in an email. “There are other strategies to increase revenues that result in greater revenue with less administrative burden and less audit risk.”

Orange County’s strategies include claiming reimbursement for administrative costs as part of the county’s overall Medi-Cal mental health spending. This is an easier process that allows counties to claim up to 15 percent of the amount spent on mental health for administrative expenses (this increased to 30 percent during the pandemic). 

Riverside County has historically operated well under this 15 percent administrative claim maximum, which is why it hasn’t applied for MH MAA funds, said Thomas Peterson, county spokesperson. 

“Our understanding is that the MH MAA reimbursement program may be utilized when a county exceeds the administrative reimbursement cap and not all costs are eligible for reimbursement as a result,” Peterson wrote in an email.

Patrick Sutton, a long-time consultant on MH MAA funding who now works with Briscoe, said he’s looked at cost reports from across the state and most counties could take advantage of the program even if their immediate administrative costs don’t go above 15 percent. That’s because community-based organizations that contract with counties to provide mental health services are entitled to claim MH MAA money, he said. That requires time-keeping measures and staff training so that organizations can submit these claims through the county. It takes effort, but it’s doable, as Alameda County has demonstrated. 

“If the ultimate goal is to maximize your federal dollar, then it’s hard to imagine why many counties wouldn’t do mental health MAA,” he said. “I have yet to see a large county where it wouldn’t have been advantageous for them.”

Sutton and Briscoe worked with Los Angeles County in 2019 to increase its administrative reimbursement claims for the previous year. The county’s MH MAA claims soared to $15.6 million in the 2018-19 fiscal year, up from $5.4 million in 2017-18. However, last year, their claims dropped to $4 million. 

L.A. County did not respond to multiple requests for comment before the publication deadline. Sutton said the county had concerns about whether their timekeeping surveys met state and federal requirements, but he did not know the full story.

Briscoe said he’s in conversation with San Francisco and Sacramento counties about helping them claim MH MAA money, which they currently don’t. He has also urged the state Department of Health Care Services, which oversees Medi-Cal, to make the claiming process more accessible. A spokesperson for the San Francisco Department of Public Health said the county is conducting an analysis to determine whether to pursue the claiming procedure.

COVID-19 has also complicated county efforts to seek more funding, said Orange County’s Nagel.  

“While it may be possible to increase the MAA revenue source (with added costs of claiming, reporting and audit risk), we must also keep in mind that operations during 2020 had to be responsive to a global pandemic,” he wrote. “The COVID-19 pandemic strained the resources of staffing that would be necessary for training, tracking and reporting related to an increase in MAA claiming.”

To Briscoe, the budget pressures wrought by the pandemic make pursuing the funding even more important. In fact, he said he’s received calls from several counties asking for help obtaining the administrative funds. 

There’s a dire need for mental health services, and local governments must do everything in their power to meet it, Briscoe said.  A report by the Centers for Disease Control and Prevention in August found that symptoms for anxiety and depressive disorders among adults had increased between three and four-fold during the pandemic compared to 2019. Mental-health related emergency department visits among children have also soared.

“At the heart of it is a culture of public service,” he said.

Carol Sloan, a spokesperson for the state Health Care Services agency, meanwhile, said the department offers technical assistance to counties interested in the MH MAA program. Sloan said the state can’t change the application rules because it’s a federal program.

“While DHCS makes every attempt to remove unnecessary administrative burdens, the Department is required to comply with all statutes and regulations, which are prerequisites for counties to enroll in the program and receive federal funds,” Sloan wrote.

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