When it comes to upping mental health services, Texas has a Medicaid problem

Demonstrators participate in a mental health rally at the Texas Capitol, organized by the National Alliance on Mental Illness, in 2013. (Marjorie Kamys Cotera For The Texas Tribune, Marjorie Kamys Cotera For The Texas Tribune)

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At the Clarity Child Guidance Center in San Antonio, some 200 children covered by Medicaid have been waiting as long as three months to see a mental health therapist.

That’s because few mental health professionals will accept the federal insurance coverage for low-income individuals. The main reason? In Texas, Medicaid pays between $60 and $122 for a 50-minute session with a therapist who can charge $180 or more for that visit.

That leaves Medicaid patients at the back of the therapy line since private insurers can pay a higher reimbursement rate or cash clients can foot the entire going rate.

For Jessica Knudsen, Clarity’s chief executive officer and president, that means nonprofits like hers spend a lot of time hunting down the few providers who will accept Medicaid and they always have a waiting list. Her team also works to secure more donations and grants to help make up the difference for that low rate so poorer children can be seen by providers who might have been in the “no Medicaid” camp.

“There would have been no way for us to do this on our own, based on Medicaid rates alone,” Knudsen said. “If we weren’t able to get other sources of income as a nonprofit then we couldn’t open the doors.”

This lower reimbursement rate for Medicaid patients is a problem that has dogged the Texas Legislature for years and it’s circling back this session as state lawmakers — and Texas residents — push for more mental health services, particularly for children.

Mikki Hand, executive director of Frontera Healthcare Network, said over the past year she has received requests from school districts, county jails and even a county judge for mental health programs and services.

“Rural counties in Texas have such a growing need and we are an example of that,” she said.

But at the end of the day, there are not enough therapists in Texas and even if there were, not enough of them accept Medicaid.

One short-term fix proposed this session comes via House Bill 1879, which would allow a licensed master social worker or a licensed professional counselor associate to accept Medicaid reimbursement for their services while they are still training and pursuing a license.

“Clearly there is a need, but I am kind of tired of studying this,” said state Rep. Drew Darby, R-San Angelo, the bill’s author, during a House Committee on Human Services meeting last month “... The need is there and now is the time and I challenge each one of us, myself included, that we need to stay the course and fix this.”

Darby said the time is now to address this workforce shortage, alluding to the state’s $32.7 billion surplus.

“It doesn’t do any good to keep giving the same response to this problem over the years that we don’t have the resources,” he told the Human Services committee, speaking on behalf of his bill, which made it to the Calendars Committee on Tuesday. “We have the resources this session to do what needs to be done and I challenge each one of us to fulfill that obligation.”

Last year, the Meadows Mental Health Policy Institute assessed which services were needed in Uvalde after the mass shooting at Robb Elementary. Even before the shooting, area leaders were concerned about the region’s lack of mental health services, particularly for youth. The isolating effects of the global COVID-19 pandemic in Uvalde and nationwide pushed the need for more mental health workers as more individuals reported feeling depressed and anxious.

The Meadows Institute’s report revealed too how the rising need for services also exacerbated the Medicaid billing problem. What few providers existed were loathe to accept Medicaid’s lower payment rate.

Knudsen in San Antonio said the lower Medicaid reimbursement rate doesn’t support hiring a back office to handle billing for insurance and that’s why many providers have stopped accepting Medicaid — or even insurance in general — and switched to a cash-only model.

“This leaves families on their own to file with their insurance. I feel like this is having a large impact on the availability of services for the Medicaid population,” Knudsen said.

How Medicaid payments work 

Medicaid in Texas can be a hard topic for people to wrap their heads around due to the complexity of how the rates are determined and what exactly is covered under various programs, and this can be true for providers as well.

Bryan Mares, government relations director for the Texas chapter of the National Association of Social Workers, cited the Medicaid payment rate for counseling sessions as a main sticking point.

“Medicaid reimbursement for these services don’t align with the current market rate within private health plans,” he said.

Jan Friese, chief executive officer for the Texas Counseling Association, said licensed professional counselors are the largest group of community health providers in Texas at nearly 23,000, but only 20% of them will accept Medicaid because they are only reimbursed at 70% of the rate that psychologists and psychiatrists receive for psychotherapy.

The Texas Health and Human Services Commission’s rate analysis office sets the rules for determining payment rates and fees for Medicaid claims. The rates are reviewed every two years by the agency.

Dr. Ryan Van Ramshorst, chief medical director for Texas Health and Human Services who is responsible for oversight of managed care and fee-for-services programs, told lawmakers during that March House Committee on Human Services meeting on Darby’s bill that psychologists get reimbursed 100% for psychotherapy, or counseling sessions, because of their more extensive training level. The next tier — which includes licensed clinical social workers, marriage and family therapists and professional counselors — are reimbursed at 70%. And supervised post-doctoral psychology fellows and pre-doctoral psychology interns are reimbursed at a 50% rate.

Mares told The Texas Tribune the agency’s research shows that if a licensed clinical social worker treated 15 clients a week based on the 70% Medicaid payment rate, the provider would make less than $50,000 a year.

“The rate at which they’re paid is insufficient when you could be making more through private pay or just simply taking cash,” he said. “We see this also in the private market where consumers struggle to find specialized providers because they will only take cash.”

In 2020, Texas Health and Human Services issued a report that proposed paying all providers the same reimbursement rate.

The report recommended the agency itself consider allowing for incremental increases in behavioral health care services reimbursement rates in fee-for-service and managed care over multiple years to lessen the immediate financial impact on the state.

The rates have slowly gone up over the past couple of years, but it hasn’t caught up to the rate of inflation across the nation.

“Providers have indicated a reimbursement rate increase would be appreciated in the current inflationary environment,” said Tiffany Young, spokesperson for the agency.

During the 2019 legislative session, state Rep. Joe Moody, D-El Paso, proposed a measure that would have given licensed clinical social workers, professional counselors and marriage and family therapists a 100% Medicaid reimbursement rate for psychotherapy services, but the bill didn’t make it out of committee.

This session, another El Paso Democrat, Rep. Evelina Ortega, filed House Bill 1378 which would require Texas Health and Human Services to prepare a report on provider reimbursement rates, supplemental payment amounts paid to providers and access to care under Medicaid. The report would also include proposed alternative reimbursement and supplemental payment amounts.

“In light of the statewide mental health workforce shortage, Medicaid managed care organizations uniquely struggle with filling vacancies and retaining staff due to outdated Medicaid reimbursement rates,” Ortega said.

Her bill was referred to the House Human Services Committee in early March, and no progress has been made since.

In the meantime, Darby is pushing hard his bill which would allow providers who are licensed practitioners with a master’s degree to bill the Medicaid program while they pursue a clinical license. Mares, with the social worker’s association, supports the measure.

Social workers in Texas who have a master’s degree who are working toward their “clinical license” are unable to bill Medicaid until they complete two years of supervision by a licensed clinician. This further limits the number of mental health providers who can join the Medicaid program quickly.

“We’re creating an incentive structure essentially because one of the issues we have heard is ‘if I am a licensed master’s level social worker wanting to pursue my clinical license, it’s going to cost me on average from $3,000 to $5,000 to pay for the supervision over the course of 24 to 60 months,’” Mares said.

If Darby’s bill passes, that could theoretically add about 1,500 licensed master-level social workers who are working already toward their clinical license because they could bill under Medicaid.

For nonprofit professionals like Knudsen, the San Antonio Clarity Child Guidance Center CEO, mental health care is something that should be available to all Texans and for that to be possible, changes will eventually need to come to Medicaid reimbursement rate.

“I think for me, it comes down to equity and making sure that children who are receiving health care through the Medicaid system have the same access and opportunities that any child who has a private insurer would have access to,” Knudsen said. “So we have to make sure the rates are aligned, so a clinician could open their doors and be a service provider for those kids as well.”

Disclosure: Clarity Child Guidance Center has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.


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