Arkansas Democrat-Gazette Examines New Medicaid Rules for Children’s Mental Health Care

The Arkansas Democrat-Gazette on Nov. 10 investigated Medicaid mental health services for Arkansas children, a system some providers say "isn't working." In April, Arkansas' Medicaid program signed a $2.5 million contract with First Health Services of Arkansas, a subsidiary of Illinois-based First Health Group, to determine which requests by providers for children's mental health treatments were medically necessary. According to State Medicaid Director Ray Hanley, the state instituted the system to "slow the rapid growth" in mental health costs for children under Medicaid, which have grown about 47% in 2002 to $55.4 million. But providers say required paperwork under the system is "too time-consuming," denial of payment "has become routine" and certain diagnoses and treatments are "unfairly targeted," the Democrat-Gazette reports. Pete Kennemer, president and CEO of Western Arkansas Counseling and Guidance Center, said about 40% of the center's treatment requests for attention deficit hyperactivity disorder treatment have been denied, compared with a 25% overall denial rate. The "biggest problem," according to providers, is that there is no clear definition of which treatments are "medically necessary," the Democrat-Gazette reports. Medicaid officials in October agreed to suspend the system for 45 days and after that put in place a "more flexible, temporary" system until July. The new system, called a level-of-care system, is supported by providers and is based on the First Health process for adult mental health services, which allows providers to request payment for a "package of services" rather than for each individual treatment (Smith, Arkansas Democrat-Gazette, 11/10).