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Carla D’Agostino-Vigil, clinical director at Ignite Counseling Colorado, goes through her thoughts while speaking during an employee meeting Feb. 23 in Westminister. (Hugh Carey, The Colorado Sun)

A legislative-ordered report aimed at shining a light on Colorado’s payment system for mental health care has done little to calm the ongoing frustration of therapists and psychologists in private practice.

Medicaid reimbursement rates paid to mental health care workers who counsel low-income patients are “adequate,” concluded the report released by the Colorado Department of Health Care Policy and Financing, which includes the Medicaid division. The finding did not go over well with mental health and substance abuse counselors, who in the past year have intensified their pitch for higher rates and fairer treatment during an ongoing mental health crisis. 

The 64-page report produced by the state Medicaid department examined the payment system for Colorado’s 17 community mental health centers as well as independent counselors, therapists and other mental health professionals. 

Colorado’s 17 community mental health centers on average receive two to three times as much reimbursement as counselors in private practice, the report found. The centers are paid more, it said, because they are required to provide other services that counselors in private practice do not, including emergency support and help with housing. 

The document comes after a year of turmoil in the state’s mental health system, one in which community mental health centers that have operated for decades under $437 million in no-bid state contracts have come under harsh scrutiny. Its release triggered a counter report written by a group of independent mental health providers who said the department “ignores the impact these inequitable rates impose on the workforce” and “maintains a vague and incomplete narrative about the rate-setting process.” 

Kim Bimestefer, executive director of the state health care department, said independent behavioral health workers should not get the same pay as the safety-net community mental health centers, which help those who are uninsured or on Medicaid, the government insurance program for low-income people and those with disabilities.

“Independent providers should never be paid the same as the safety net,” Bimestefer said in an interview with The Sun. “The safety net is just that. They have a specific role to play across the behavioral health system.” 

Rather than comparing the reimbursement rates of private-practice counselors to mental health centers, the state should look at its Medicaid reimbursement rates for independent counselors compared to those paid by private insurance, she said. The Medicaid division is working on a report expected in the next year that will look at Medicaid rates versus those paid by Kaiser, Anthem Blue Cross Blue Shield and others, Bimestefer said. 

The recent report, completed by an independent auditor, found that from 2020 to 2021, rates for independent therapists increased 1% to 15%, depending on the types of services, with an average increase of about 7%. And the number of services provided in Colorado by those counselors and therapists jumped by 21%. 

“The compilation of these facts leads the department to the conclusion that rates paid to contracted behavioral health providers are adequate to meet or exceed the contracted network adequacy standards in every region of the state,” the report says. 

Not so, say independent providers, who argue the rates — combined with paperwork headaches, staffing rules and long delays in getting approvals for care — are causing independent mental health workers to stop accepting Medicaid patients. 

Some providers said the report was more of the same, meaning the state again justified why mental health centers are receiving higher payments for the same type of one-hour counseling sessions. 

Independent providers said they are paid about a tenth of what mental health centers are for some reimbursement codes. An investigation this year by the Colorado News Collaborative, which includes The Colorado Sun, found that the Mental Health Center of Denver received $818 for an hour of crisis intervention compared with $47.50 an hour paid to private providers. 

In this Jan. 9, 2020, file photo, Republican state Rep. Richard Holtorf talks with a fellow representative as they wait for delivery of the State of State speech in the State Capitol in Denver. (AP Photo/David Zalubowski,File)

The state should dismantle its convoluted system of payment and create transparency, argued COMBINE, a nonprofit formed by dozens of independent mental health and addiction providers advocating for Medicaid reforms.

“The common-sense solution is plain,” the organization wrote in its counter report. “The centers must be reimbursed for all the actual services they provide, so that the counseling rate can be related to the cost of counseling, and not tied to the entire range of safety net services they provide.”

Independent providers say the system is also inequitable even among themselves — counselors, psychologists and psychiatrists in private clinics are paid vastly different rates in some parts of Colorado. 

“Precious little,” is how Stephanie Farrell, chief executive officer of Left Hand Management, a consulting group that helps behavioral health care offices across the state with billing and training, described the substance of the report. 

“The point of this report was spin,” Farrell said. “It was to reassure the legislature, ‘No, no, everything is fine here.’ The health care leadership is really trying to portray that ‘Yep, everything is going perfect here. We’re making big changes. Providers should be thrilled.’” 

Colorado is at a pivotal point for mental health care reform, infused with $450 million in federal COVID relief money to upgrade the system. One huge change is the creation of the Behavioral Health Administration, which is overseeing the reform, as well as a plan to end the no-bid contracts the state signs with community mental health centers. The 17 regional centers spread across the state receive $437 million in tax dollars per year, lump sums to operate a host of services. 

“Right now is a critical time to make real change,” Farrell said. “This report was an attempt to quash that. Everything is so clearly not fine. We need to make drastic changes. Anything that limits access to care is a problem. We are in a health care crisis.”

State lawmakers passed legislation earlier this year that required the department to hire an independent auditor to prepare the behavioral health report exploring reimbursement rates paid for mental health and substance abuse treatment. Lawmakers directed the Medicaid department to make recommendations to “create equitable payment models.”

Rep. Richard Holtorf, a Republican from Akron who ran the legislation, is wondering why the report does not include specific recommendations on how to make sure independent counselors are paid fairly. 

“I did not see clear recommendations or corrective actions that said ‘This is what we’re going to do,’” the lawmaker said. “And that’s a problem.”

Holtorf and co-sponsor Rep. Judy Amabile, a Boulder Democrat, plan to meet with the Medicaid department, and Holtorf said he intends to hold committee hearings on the payment issues in the coming months.

The point in asking for the report was to create transparency in public spending, he said. Counselors in some areas of the state are receiving $500 per hour to see a patient, while in others, they get $50, Holtorf said. 

“It doesn’t make any darn sense,” said the lawmaker from eastern Colorado. “Where the rubber meets the road is where the counselor is sitting across a person trying to help them in a very troubling time. Those people who are doing that work should have some semblance of parity.”

The reason the payment system is not fully transparent is that the Medicaid division pays sums of money to five middle managers, called “regional accountable entities,” which then license, negotiate and dispense reimbursement to mental health professionals who see Medicaid patients. The regional entities, some of which are operated by national insurance giants, do not have to disclose rates negotiated with mental health care providers. 

Colorado is divided into seven regions run by agencies that contract with the state Medicaid division. Behavioral health providers who want to take patients on Medicaid must enroll first at the state department and then with the regional agencies. (Colorado Department of Health Care Policy and Financing)

That means the state’s report is based on samples and averages. “Ultimately, the negotiated rates in a managed care model are proprietary and disclosure of them violates Fair Trade laws,” the report says. 

Holtorf said it’s time to “open the curtain” on rates and make sure counselors, who are working to help Colorado out of a mental health crisis, are getting paid enough to keep seeing patients.

Bimestefer, though, said the report does make specific recommendations on how to work toward equitable rates, including a review of how the department calculates the true cost of a particular behavioral health service. 

“If the payments were OK, we wouldn’t be increasing payments for behavioral health providers by three times what we are for the rest of the providers,” she said. “If they were fine, we wouldn’t be doing this report.”

Bimester said she has been on the phone with all of the regional entities, which contract with providers and dispense payment, urging them to help increase the number of mental health and substance abuse counselors throughout the state. “This behavioral health crisis is unprecedented due to COVID,” she said. “Behavioral health providers are paid less than other specialists in health care. We do not have enough individuals going into behavioral health. We need to take specific and intentional steps in order to get more individuals in.” 

Reforms to create equity are already in the works at the department, said Cristen Bates, deputy Medicaid director. 

Community mental health centers have been the safety net system for decades in Colorado, receiving federal and state funding for crisis care and even drop-in centers for people who are homeless. They’re paid more for those higher-level services. 

“We set standards for safety net providers that are higher than the standards for somebody with just a regular license who provides therapy services,” Bates said. “The folks that are served by the safety net are supposed to be the folks that really need higher specialty services.”

But under a new Colorado law, private clinics and health corporations can apply to contract with the state to provide those safety net services. 

“We’ve opened the door a lot wider for who can become a safety net provider,” Bates said. 

Jen is a co-founder and reporter at The Sun, where she writes about mental health, child welfare and social justice issues. Her first journalism job was at The Hungry Horse News in her home state of...