Minnesota is losing the race on mental health care

Opinion editor’s note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.

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There’s probably never a good time to cut reimbursement to Minnesota’s mental health providers. But there are particularly precipitous times to do so, and this is one of them.

From 2005 to 2023, the number of licensed beds in children’s residential treatment facilities statewide decreased from 2,474 to 1,586, according to AspireMN, a St. Paul-based advocacy organization. Earlier this week, a physician with Children’s Minnesota, the state’s largest pediatric health system, made clear the decline’s harmful consequences at a news conference.

“In 2023, 12,000 children statewide boarded in hospitals. Kids boarding at Children’s Minnesota collectively spent more than 1,600 days stuck because the appropriate mental health treatment setting was not available to them,” said Dr. Gigi Chawla, vice president and chief of general pediatrics at Children’s.

Adult mental health providers are also struggling, with North Memorial Health recently announcing it will close outpatient mental health services August at its Robbinsdale medical center.

Unless Minnesota lawmakers take action this session, an ill-advised reimbursement cut passed last year will soon exacerbate this care crisis. That’s an outcome they should swiftly work to avoid.

The state needs more care options for those suffering from mental illnesses, not fewer. But that’s the likely outcome if the mistake lawmakers made in 2023 isn’t remedied.

The error came when legislators passed a policy that too swiftly sunsets critical access payments for mental health clinics and providers. The changes kick in Jan. 1, 2025, and total more than $25 million over three years, according to the Minnesota Mental Health Legislative Network, a consortium of about 30 state providers and advocacy groups.

The rate add-on has been in place since 2007 and is considered a policy Band-Aid to address a chronic problem: low reimbursement rates for patients enrolled in Medicaid, the joint federal-state medical assistance program for the poor. In Minnesota, the programs are known as Medical Assistance and MinnesotaCare.

While low reimbursement is an issue for all medical services for public program enrollees, it’s especially acute when it comes to mental health.

Many people eligible for Medicaid struggle with mental illness or addiction. “Nearly 40% of the nonelderly adult Medicaid population (13.9 million enrollees) had a mental health or substance use disorder (SUD) in 2020,” reports KFF, a respected nonpartisan health policy organization.

In turn, that makes Medicaid “the single-largest payer for mental health services in the United States,” according to federal officials.

KFF estimates Minnesota’s Medicaid enrollment at 1.4 million. So the sunset cut would be felt widely by mental health providers, whose operating margins are already thin because their clientele includes many Medicaid enrollees. That puts the onus on state lawmakers, who set reimbursements, to delay or eliminate the 2023 sunset.

“Mental health care provider organizations like ours depend on critical access payments to fund current program-related costs. This includes wages, benefits and other program-related costs, such as interpreters,” the CEOs of six Minnesota mental health providers said in statement provided to an editorial writer this week.

The Minnesota Hospital Association (MHA) also weighed in, noting that inaction would have consequences for the entire state health care system. The trade organization notes that the scarcity of community-based mental health treatment makes the state’s nonprofit health care systems “primary providers of mental health services,” which in turn results in long wait times for care, boarding crises in emergency rooms and increased risks to staff who care for patients in a setting not intended for this type of care.

To be fair, lawmakers in 2023 did pass a 3% rate boost to mental health providers for state program enrollees. But it was hardly sufficient to cover providers’ shortfall between care costs and reimbursement.

The apparent logic behind the critical access funding sunset was that lawmakers would come back in 2024 after the release of a state report on mental health care rates and make further fixes based on the report’s findings.

That report came out in January. It makes clear that reimbursement provided by the state hasn’t kept pace with inflation and doesn’t cover the cost of providing care, sometimes not even close. In one case, the study recommended nearly tripling the reimbursement for residential care provided to those struggling with addiction.

But adjusting the rates as the study recommends comes with a massive price tag. Implementation, if it began in 2025, would cost the state about $820 million over three years, the state Department of Human Services estimates. After implementation, these costs would run about $300 million to $400 million per year.

That price tag is likely a key reason why broader rate reform isn’t happening this year when belt-tightening has been a priority. It will take fortitude to tackle in future sessions.

Until then, it makes no sense to cut mental health care rates further. At a minimum, the sunset should be delayed or eliminated, or other workarounds found, with additional emergency relief for mental health providers given serious consideration.

Editorial Board members are David Banks, Jill Burcum, Scott Gillespie, Denise Johnson and John Rash. Star Tribune Opinion staff members Maggie Kelly and Elena Neuzil also contribute, and Star Tribune CEO and Publisher Steve Grove serves as an adviser to the board.