By Jacqueline Neber (featured in Crain’s Health Pulse)

A coalition of behavioral health providers and children’s advocacy groups are calling on New York to include $195 million in the next executive budget to meet the growing demand for children’s behavioral health services.

A new report from the Campaign for Healthy Minds Healthy Kids, a group that includes the Citizens’ Committee for Children of New York, the Institute for Community Living and Families Together in New York State, shows demand has surged while providers’ capacity has shrunk over time. This leaves gaps in the care continuum that endanger young New Yorkers as kids’ mental health continues to worsen, the study shows. Experts say a reform to the tune of $195 million could begin to patch those gaps.

Lauri Cole, the executive director at the New York State Council for Community Behavioral Healthcare, said New York has tried for years to develop a system of care that meets kids’ unique needs. However, obstacles such as reimbursement rates from insurers, being carved into Medicaid managed care, and denied or delayed payments have created an “impaired” system that is not flexible or prepared to cope with changing needs, she said.

“We see children who have been sent to emergency rooms for evaluation, and need community-based care, not being able to get it–and very often living in emergency departments while they wait for discharge to a community-based setting that has an opening,” Cole said. “All of this is just a quagmire that results in a complete inability to meet increased demand, let alone to address waiting lists.”

The report also highlights that workforce shortages in the children’s behavioral health industry, which have also plagued providers for adults, have driven up salaries–and rates don’t keep pace. As a result, the current system is even less prepared to help the number of kids who need it, Cole said.

Additionally, the report shows, specialty outpatient clinic capacity is declining in New York, further straining providers. In 2015, clinics statewide had more than 3,500 spots per 100,000 children. As of 2020, the latest year for which the study has data, that number has fallen to about 3,000 slots.

Dr. Jennifer Havens, the chair of the department of child and adolescent psychiatry at NYU Langone Health, noted that it’s vital to correct the “dramatic decrease” in rates from public and commercial insurers over the last two decades because some sick kids grow into sick adults. Cole added that ultimately costs the state more.

To address these issues, Campaign for Healthy Minds Healthy Kids encourages the state to trend reimbursement rates for clinics, Home- and Community-Based Services and Children and Family Treatment and Support Services to keep pace with inflation. Additionally, the state should invest in establishing a care team coordination fee, because providers must interface with care managers to help kids, and implement a 35% enhancement for clinic visits for children. The coalition also urges New York to adjust rates for certain types of care to account for the volume of services, which never reached anticipated levels. This would allow providers to grow their capacity, the report said.

Altogether these changes would require a $195 million investment. The largest piece of that total–about $44 million–would come from adjusting rates for CFTS and HCBS services for volume.

Cole stressed the importance of implementing care coordination fees, which would necessitate more than $20 million according to the report. Children’s mental health providers must facilitate a significant amount of care they can’t bill for, she said, such as contacting a child’s school or YMCA to coordinate services or family therapist. These “in between” services must be compensated to ensure providers can continue, Cole added.

For Havens, the aftermath of the pandemic makes the state’s investment even more crucial.

“The kids really struggled and suffered with Covid,” she said. “The rate of disorders probably doubled. Hopefully, it’s going to calm down a little bit, although it hasn’t yet. So we have a sort of broken system to begin with…That can’t deliver the quality and the evidence-based services that kids and families need in the face of this pandemic flood of need.”

Furthermore, Haven said, the coalition’s nearly $200 million ask isn’t much compared to New York’s overall health care budget. Gov. Kathy Hochul has also dedicated $1 billion to addressing mental health throughout the state over several years, including $30 million to expand services in schools.

If New York made the investment, the report estimates, community behavioral health providers could hire more than 1,300 additional clinicians and serve over 26,000 more children.

Avi Small, a governor’s office representative, declined to comment on how Hochul will consider the proposed investment for her upcoming executive budget, which will be unveiled next year.