Texas Families Struggle as Medicaid Falls Short on Mental Health Care

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By: TAHP | Thursday, May 30, 2024

What’s New: This May, Mental Health Month, Texas faces a critical challenge. Despite increasing demand for mental health services post-COVID-19, Texas Medicaid does not cover the full continuum of mental health care, leaving millions—especially children—without necessary support.

Why It Matters: One in three Medicaid enrollees in Texas struggles with mental health or substance use disorders. Unlike in the private market, where mental health parity laws have mandated comprehensive coverage, Medicaid has lagged behind, failing to provide similar benefits.

  • Currently, Medicaid coverage is limited to basic therapy and short-term medication management or inpatient care.
  • This gap means low-income families often face heart-wrenching decisions, like placing children in foster care, to access essential services.

What’s Missing in Medicaid:

  • Intensive Outpatient Care: Texas Medicaid lacks coverage for intensive facility or clinic-based mental health care.
  • Extended Inpatient Care: Coverage does not extend beyond 14 days for adult inpatient psychiatric services.
  • Community-Based Programs for Youth: There is no comprehensive coverage for intensive community-based care for youth involved with or at risk of entering the juvenile justice system.
  • Crisis Intervention Services: Comprehensive crisis services, crucial for immediate support, are not covered.
  • Residential Psychiatric Care: Access to psychiatric residential treatment for youth is severely limited and is only available to children in foster care.

Legislative Focus on Mental Health in Texas:

  • Enhanced Funding: The 88th Legislature spent $11.68 billion for behavioral health, an increase of more than 30% from the previous session.
  • Key Bills: Rep. Ann Johnson and Senator Blanco sponsored legislation, H.B. 2638 and H.B. 2404, which would have provided intensive family and community-based therapies for at-risk youth, while Rep. Oliverson and Senator Perry proposed H.B. 2337, legislation for hospital “step-down” treatment coverage. However, these key Medicaid mental health bills ultimately did not pass.
  • Interim Charges: Both the House and Senate received interim charges directing a study of behavioral health services for kids, including children with high behavioral health needs and at risk youth, both with an emphasis on preventing children from entering the foster care system.

Five Key Steps to Close Medicaid Mental Health Gaps:

  1. Create coverage for “step-down” services like intensive outpatient and partial hospitalization programs (IOP and PHP) which allow individuals to stay in their community and even prevent unnecessary and costly hospital stays all together.
  2. Focus on at-risk youth with coverage for short-term, effective community services like functional family therapy (FFT) and multisystemic therapy (MST).
  3. Add comprehensive crisis intervention services as Medicaid benefits including crisis stabilization and crisis respite to step in when families need in-home and out-of-home crisis support.
  4. Provide psychiatric residential treatment for youth by aligning licensure with federal requirements and creating a covered Medicaid benefit. TAHP submitted a comment letter urging HHSC to begin addressing this issue.
  5. Expand coverage for psychiatric hospital stays by applying for a state waiver to the Institutions of Mental Disease (IMD) exclusion, which prevents Medicaid coverage of hospital stays more than 15 days.

The bottom line: Comprehensive Medicaid mental health coverage will help families and children get the care they need, when and where they need it, and prevent the need for more intensive, costly hospitalizations.

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