Co-Pays for BHRS: Another Attempt to Destroy the BHRS System in Pennsylvania

I have been in touch with Federal and national advocacy officials about the co-pay scheme announced by Department of Public Works (DPW) on Saturday, August 11th, and they agree that there are significant questions that need to be answered before this should be implemented.  Since no parent can be denied Behavioral Health Rehabilitation Services (BHRS, mistakenly called “wraparound services” in Pennsylvania) if they are unable or unwilling to pay a co-pay, the scheme requires Medicaid-contracted insurance companies to simply deduct the amount of the co-pay from the payments made to the providers, resulting in the reduction in costs that the state wants. The first people who will lose out will be the BHRS providers, who will effectively be forced to work for less than the pay rate set in 1992.  Then, more and more children and their families will lose the effective treatment they had been receiving.  Although some Medicaid Managed Care Organizations have offered slightly higher rates for some low-frequency services, the 1992 pay rate has never been raised despite obvious increases in costs at all levels.  At a minimum, this co-pay scheme involves “opening” the state’s Medicaid Plan (technically called a “State Plan Amendment” or “SPA”) which will give parents and advocates a tremendous opportunity to demand improvements to the pay rates available for BHRS providers that could compensate them for the loss of funding that this “co-pay” scheme produces.  An appeal for an increase in the minimum BHRS payment rates may derail the co-pay scheme entirely.

An attorney with a national advocacy organization provided me with the following information:

The Centers for Medicare and Medicaid Services (CMS) will consider public comments on a SPA, but the timeframe for submitting them is not clearly specified. Generally, CMS acts on SPA proposals within 90 days.  So once Pennsylvania submits its SPA proposal, opponents should plan to submit their comments to CMS within 2 weeks.  The sooner, the better.  Any comments by opponents sent to the state should be cc’d to CMS to give CMS a preview of the issues you are raising, which are significant.

Hopefully, the backers of this discriminatory, abusive and cruel plot aimed at exterminating the BHRS program under the guise of a “co-pay” scheme will come to realize that:

  • parents are concerned about BHRS providers simply falling out of business due to this loss in their income
  • parents will appeal to state legislators and to the CMS (which has to approve the State Plan Amendment authorizing the co-payment scheme) to require an increase in BHRS payments of just 15% (which should make up the difference between the pre co-pay and post co-pay revenue)
  • the backers of the co-pay scheme will retreat back underground because their co-pay scheme will result in a net increase in cost to the state
  • the BHRS providers will continue to get along with DPW and Medicaid Managed Care Organizations as best we can without any co-payment threats to our existence

Of course, when you realize that the pay rate for services comparable to BHRS in New Jersey is thirty-three percent higher than in Pennsylvania an excellent case could be made that, after more than twenty years, a “cost of living” increase is unquestionably warranted for BHRS. Especially if the BHRS provider has a spotless twenty year track record of success like the Network for Behavior Change has.  That argument was made vigorously in testimony during the Federal court “Kirk T” hearing over ten years ago, but unfortunately the people who argued that case settled without making any change to the payment rates.

Responses need to be sent to the address in the PA Bulletin by 9/10/2012 (with a cc CMS authorities):

PA Bulletin address:

Department of Public Welfare 
Office of Medical Assistance Programs
c/o Deputy Secretary's Office
Attention: Regulations Coordinator
Room 515, Health and Welfare Building
Harrisburg, PA 17120.

CMS Directors Cindy Mann and Vikki Wachino

Centers for Medicare and Medicaid Services
7500 Security Boulevard
Baltimore, ME  21244-1850

Ted Gallagher,  Assoc. Regional Administrator   
Ofc of the Reg. Administrator, Region III
The Public Ledger Building    Suite 216
150 South Independence Mall West
Philadelphia, PA  19106

RE:  42 Pa.B. 5303  [Saturday, August 11, 2012]

Comments received by the PA Department of Public Welfare within 30 days will be reviewed and considered in the development of the State Plan amendment and the final public notice.  Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).

I hope to contribute to PA advocacy groups’ discussions as well, and am especially interested in talking with Autism support groups because I know I can help them.  I realize that my vigorous opposition to Act 62 may be a barrier for them, but I was right to oppose it and they were wrong to support it for all of the reasons I explained years ago.  Hopefully something different will happen this time.

I sincerely doubt that this co-pay scheme can survive a withering outcry of concern that the parents of children with ASD can make (especially those who do not have private health insurance since they are the group that is being targeted most by the co-pay scheme since Act 62 didn’t drive enough people off the Medicaid roles).  This article in a prestigious journal pretty much sums up the effect of Act 62 and its purpose from the perspective of a former official within the CCBHO Medicaid Managed Care Organization in Pennsylvania.

J Am Acad Child Adolesc Psychiatry. 2012 Aug;51(8):771-9. Epub 2012 Jun 29.

Impact of a private health insurance mandate on public sector autism service use in pennsylvania.

Stein BD, Sorbero MJ, Goswami U, Schuster J, Leslie DL.


… University of Pittsburgh and the Research and Development (RAND) Corporation.  He was also with the Community Care Behavioral Health Organization at the time the study was conducted.  [this citation was cut off in the original abstract published in PubMed]



Many states have implemented regulations (commonly referred to as waivers) to increase access to publicly insured services for autism spectrum disorders (ASD). In recent years, several states have passed legislation requiring improved coverage for ASD services by private insurers. This study examines the impact of such legislation on use of Medicaid-funded ASD services.


We used Medicaid claims data from July 1, 2006, through June 30, 2010, to identify children with ASD and to assess their use of behavioral health services and psychotropic medications. Service and medication use were examined in four consecutive 12-month periods: the 2 years preceding passage of the legislation, the year after passage but before implementation, and the year after implementation. We examined differences in use of services and medications, and used growth rates from nonwaiver children to estimate the impact of the legislation on Medicaid spending for waiver-eligible children with ASD.


The number of children with ASD receiving Medicaid services increased 20% from 2006-2007 to 2009-2010. The growth rate among children affected by the legislation was comparable to that of other groups before passage of the legislation but decreased after the legislation’s passage. We project that, without the legislation, growth in this population would have been 46% greater in 2009-2010 than observed, associated with spending of more than $8 million in 2009-2010.


Passage of legislation increasing private insurance coverage of ASD services may decrease the number of families seeking eligibility to obtain Medicaid-funded services, with an associated substantial decrease in Medicaid expenditures.

The preceding Abstract is copyright © 2012 American Academy of Child and Adolescent Psychiatry. Published by Elsevier Inc. All rights reserved.

The most important thing to keep in mind is that, as the co-pay proposal is currently written, parents can simply refuse to pay the co-pay and only the BHRS providers will bear the burden of  the co-pays — if they can do so and stay in business, that is.  I believe that I have the skills, dedication and contacts to remain in business as a BHRS provider despite this latest attempt by DPW to exterminate the BHRS program in Pennsylvania, but the continued support of the parents of our clients and friends with similar concerns is terrifically reassuring.

Here is the latest summary of my concerns about the co-pay scheme that I have been able to create.  I will continue to contact various legal, advocacy and administrative organizations in an attempt to get answers that I can pass on to you.  You can distribute the content of this e-mail to others if you think it will help galvanize a response to the co-pay scheme.  The period of public response ends in less than 30 days, so the outcry should begin as soon as possible and should be sustained for as long as possible.

When an attempt was made several years ago by a faction within CMS to strip BHRS treatment away from children on the Autism Spectrum, CMS received over 600 appeals against it within 30 days.  CMS has to listen to those appeals and they did the right thing in killing that proposal.  President Obama confirmed its death soon after taking office.  It may take an election to set the PA Department of Public Welfare back on the right track, but in the mean-time, we will have to argue much more vigorously on behalf of the needs of children with disabilities, especially those with Autism Spectrum Disorders because DPW appears to be endorsing a plan to rid Pennsylvania’s Medicaid program of as many BHRS treatment recipients, and BHRS providers, as possible.

Here are the main talking points I think need to be addressed:

  • The PA pay rate for BHRS was set in 1992 and has not been increased in more than 20 years.  Opening the State Medicaid Plan to create co-pays will invite criticism of this antiquated pay rate.  This could result in the establishment of pay rates that are 33% higher – or even higher – than existing pay rates.  For example, “TSS” is paid at no more than $33 hourly in PA; in NJ, a comparable service provider bills at $44.  Other states pay even more for services comparable to TSS because the compensation rate cannot be so low that it prevents people from performing the work needed to implement the child’s treatment plan.  BHRS providers are not allowed to bill Medicaid for the training of staff.  Since 2004, twenty-four hours of training has been required of each TSS provider in the first six months of employment, with 20 additional hours annually, so any additional reduction in pay rates may be too painful for some BHRS providers to bear and they will just stop providing BHRS.

According to the Medicaid Act (42 U.S.C. 1396a(a)(30)(A)):

A State plan for medical assistance must . . . . provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan (including but not limited to utilization review plans as provided for in section 1396b (i)(4) of this title) as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area; (emphasis added). 

  • Recipients or their families can “refuse” to pay co-pays (with no apparent consequences) but Managed Care Organizations will deduct the co-pay amount from payments to providers nonetheless.  In this scheme (which is apparently being perpetrated in other states as well), the providers of BHRS in Pennsylvania will be receiving less for their services than the rate established in 1992.  Additionally, some existing Medicaid recipients will disenroll their children to avoid the possibility of being billed for services in the future.  Potential Medicaid recipients will refrain from seeking Medicaid funding for the same reason.  This will all place an even greater burden upon service providers than the burden documented repeatedly in testimony for the Kirk T lawsuit about 10 years ago (that the pay rate available then was insufficient to permit the delivery of adequate treatment services to the PA population).  The co-pay scheme will further jeopardize providers’ abilities to deliver treatment that is “sufficient in amount, duration and scope to reasonably achieve the purpose for which it is furnished” which is required by the Federal Medicaid Act (42 CFR 438.210(a)(3)(i)). 

Unfortunately, the people who argued the Kirk T lawsuit allowed it to be settled without any change to the 1992 BHRS payment rates.  That was a terrific tactical blunder, needless to say, because it left us with the pitifully under-funded Medicaid Behavioral Health Rehabilitation Services (BHRS) program that providers have been struggling with for the past 20 years.  Some people claimed to intend to “fix” the under-funding problem by creating Act 62 (forcing private insurance companies to fund autism treatment).  They were either self-serving or terribly misled; DPW vigorously supported the passage of Act 62 because it was designed to cut families off from Medicaid funding and replace their entitlement to treatment funding as a Civil Right under the Social Security Act (via the Medicaid EPSDT mandate) with the privilege of begging private insurance companies for “help.” 

  • BHRS works.  It is the only evidence-based treatment program that has shown, for more than 10 years, a clear track record of success in addressing the needs of children with developmental and other disabilities that impair their behavior and mental health.  I have a database of more than 1,800 treatment records currently being studied by researchers affiliated with Villanova University and they are corroborating and expanding upon the results of previous studies at the UNC-Chapel Hill (2007) and Thomas Jefferson University (2010) who all found that children who received BHRS from my staff showed significant reductions in all troublesome behavior measured.  64% have ASD; 28% primarily have ADHD and 90% of the children we have treated in the last 10 years have completed BHRS treatment programs successfully in three years or less.  Many have received improved IEPs with better school placements and appropriately skilled 1:1 trained classroom aides replacing our TSS providers.  Families overwhelmingly support BHRS programs when their children receive professional treatment by knowledgeable and conscientious providers.  Parents who have experienced competent BHRS delivery always prefer it to any other treatment modality for behaviorally challenged children — because it works. 
  • BHRS was intended to reduce or eliminate the probability of institutional or residential treatment placements of children.  It goes without saying that reducing the viability of BHRS only increases the probability that a child will require institutional or residential placement, which would violate Olmstead v. L.C. (a Supreme Court ruling that guarantees the right to treatment in the least restrictive setting necessary), the Americans with Disabilities Act, and section 504 of the Rehabilitation act.   Independent research has shown since 2007 that BHRS has been delivered effectively and cost-efficiently by staff of the Institute for Behavior Change when treatment outcome measurements are taken weekly from the parents of treatment recipients and used to reshape the treatment program as necessary according to the progress of the child.
  • BHRS is far less costly than residential or other institutional placements, and far more effective than school-based programs that have been widely criticized as ineffective and self-serving:  How can a school comply equally with the Federal Education Rights and Privacy Act (FERPA) and the Health Insurance Portability and Accountability Act (HIPAA) simultaneously?  It can’t; private records can be mingled too easily.  The probability of experiencing Medicaid “recoveries” of misspent funds is too daunting a risk for many schools to participate in School-Based Mental Health Programs anyway.   Thus, expecting schools to take more responsibility for providing mental health treatment to children is an abominable perversion of “fiscally responsible” behavior on the part of the DPW, its overseers and advisors.
  • The School Based Access Program (SBAP) is exempt from the co-pay requirement.  Schools cannot charge students for their services.  However, the SBAP in Pennsylvania took over $140 million from Medicaid last year and has taken an average of over $100 million from Medicaid every year since 2000.  That’s over one billion dollars in Pennsylvania alone.  Cutting their budget by just 4% will recover more Medicaid funds than the proposed co-pay scheme would generate.  Schools’ uses of Medicaid funds is virtually unaccountable and is notorious for funding perks of all kinds only loosely related to “special education.”   The US Office of the Inspector General lists recoveries of tens of millions of dollars from school districts across the US arising from findings of Medicaid fraud and abuse:

March, 2010     A-09-07-00051     Arizona                 …refund to the Federal Government $21,288,312 for unallowable school-based health services…

March, 2010     A-07-08-03107     Missouri              …refund $20,469,670 ($4,212,506 for the St. Louis Public and Springfield school districts and $16,257,164 for the other Missouri school districts) to the Federal Government for unallowable SDAC [school based] expenditures…

April, 2010          A-02-07-01051    New Jersey     …Based on our sample results, we estimate that New Jersey schools were improperly reimbursed $8,079,312 in Federal Medicaid funds during our July 27, 2003, through October 4, 2006, audit period.

With all of the other alternatives available, the current administration’s insistence upon adopting this discriminatory and mean-spirited policy against BHRS is indefensible.  It will adversely effect the well-being of children with disabilities in families of all sizes and all economic levels because it targets Medicaid-funded BHRS treatment (except when schools deliver it).  This co-pay scheme will hurt families both rich and poor, but especially those who are earning just enough to qualify for the co-pay and are struggling to get by without private insurance and, interestingly, wealthier families.  The co-pay scheme will be especially hurtful to all of the children with autism spectrum disorders (ASD) who don’t have private insurance to turn to under “Act 62.”

Children with ASD, according to the 2001 National Academy of Sciences definitive study, require a minimum of 25 hours per week of intensive individual treatment in order to have a reasonable probability of relief from symptoms of an autism spectrum disorder.  That translates to a co-payment obligation (for 25 hours of intensive individual treatment each week) of $125 every week ($500 per month; $6,500 yearly) for a family of four with an income of $130,000.

A more representative example is a family of four with an annual income of just $48,000:  $200 monthly; $2,400 yearly).  The bottom line is that few families can reduce their annual income by 5% without feeling a significant pinch.  That pinch starts at a gross annual income of 200% above the Federal Poverty Level (just $48,000 for a family of four) and can go no higher than 5% of gross annual income.  Higher-income families simply pay more for BHRS, that’s all there is to it.

But don’t forget, the co-pay will be deducted from payments to BHRS providers whether or not the family pays it.  This means that BHRS providers who serve families with higher incomes will have more taken from them than BHRS providers who serve families with lower incomes (in the example above, a $6,500 loss for treating a child in a family of four with a household income of $130,000 versus a $2,400 loss for delivering the exact, same 25 hours of TSS service to a child in a family of four with a household income of just $48,000).

The magnitude of the pinch felt by BHRS providers will be proportional to the number of families they serve who earn more than 200% of the Federal Poverty Level — the more higher-income families served, the bigger the pinch.  This does not bode well for the future of Medicaid, disabled children, and responsible BHRS providers in Pennsylvania, for all of the reasons cited.


The bottom line is that this co-pay scheme is going to hurt disabled children, their families, as well as current and future Behavioral Health Rehabilitation Services (BHRS) providers.   More than a few families are simply going to drop out of the Medicaid program entirely for fear of being surprised on some future date with bills for thousands of dollars.  Many more will pass up the opportunity to enroll their disabled child in Medicaid, for the same reason.  The end result will be another reduction in the number of Pennsylvania children enrolled in Medicaid, which undermines the basic intention of the Medicaid Act.  The reduction will be comparable to what was reported in the Journal of the American Academy of Child and Adolescent Psychiatry (summary reproduced above), describing the effect of Act 62.  With fewer children enrolled in Medicaid (not just children on the Autism spectrum this time), the state’s Medicaid expenditures will once again go down, and so will the EPSDT funds available to BHRS providers, as planned.  Schools will continue to have unrestricted access to those funds, without any interference from Managed Care, and the School Based Access Program is sure to expand as a result.

If “pressing economic conditions” were actually prompting the Governor of Pennsylvania and the current Secretary of the Department of Public Welfare to endorse this co-payment scheme, they would not have exempted the School Based Access Program which has used over $1,000,000,000 (one Billion dollars) of PA Medicaid funds in the past decade alone.  They would not have exempted virtually every other Medicaid-funded service and left BHRS as the primary target.  The impact of this co-pay scheme will be more pervasive and insidious than Act 62.  When BHRS providers realize that they can lose $2,400 versus $6,500 in “co-pay deductions” for delivering the exact, same services to families with different income levels, it will present an ethical dilemma for them:  do the right thing or treat fewer children of higher-income families (“high co-pay cases”) and concentrate more on treating children of lower-income families (“low co-pay cases”).  The dilemma will probably be solved relatively easily on the basis of simple economic viability by many BHRS providers.

This is not what Congress intended when the EPSDT mandate was passed in 1967, nor was it their intention when these benefits were made mandatory for children enrolled in Medicaid in all 50 states in 1989.  It is definitely not what the Pennsylvania legislature intended when it, along with 35 other states, allowed all disabled children to enroll in Medicaid regardless of family income so they could count on receiving funding for necessary treatment of their disabilities.  Some people in the Department of Public Welfare and elsewhere in Pennsylvania persistently refer to this expanded Medicaid eligibility program as a “loophole.”  That pejorative term was shamefully used in the document filed with the Pennsylvania Health Care Cost Containment Council (PH4C) by the Department of Public Welfare in support of legislation that became Act 62.  Some government authorities are determined to close that “loophole” one way or another, and they have as much affection for BHRS as they do for “loophole kids.”  It’s not right.

Best wishes and hope for a better future, always.

Steve Kossor

Founder & Executive Director

The Institute for Behavior Change


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