Minneapolis, Minnesota – As mental health care providers in Minnesota face a looming crisis, the consequences of an ill-advised reimbursement cut passed last year are becoming increasingly clear. The reduction in funding, combined with a decrease in licensed beds in children’s residential treatment facilities, has resulted in significant challenges for both young patients and adult mental health providers in the state.
According to AspireMN, a St. Paul-based advocacy organization, the number of licensed beds in children’s residential treatment facilities in Minnesota has dropped from 2,474 in 2005 to 1,586 in 2023. This decline has had detrimental effects, with children boarding in hospitals due to a lack of appropriate mental health treatment settings. The issue was brought to light by Dr. Gigi Chawla, vice president and chief of general pediatrics at Children’s Minnesota, the state’s largest pediatric health system.
Adult mental health providers are also feeling the strain, as evidenced by North Memorial Health’s announcement to close outpatient mental health services at its Robbinsdale medical center. The situation is further exacerbated by a policy change that will cut critical access payments for mental health clinics and providers, totaling over $25 million over three years. This decision, set to take effect on January 1, 2025, threatens to worsen the already precarious state of mental health care in Minnesota.
The critical access payments, implemented in 2007, have been a vital resource for mental health providers dealing with low reimbursement rates, particularly for patients enrolled in Medicaid. However, the upcoming sunset cut puts these providers at risk of further financial strain, as their operating margins are already thin due to serving a significant number of Medicaid enrollees.
Lawmakers did pass a 3% rate boost for mental health providers in 2023, but it was deemed insufficient to bridge the gap between care costs and reimbursement. The hope was that further fixes would be made based on a state report on mental health care rates released in January. The report highlighted the inadequacy of current reimbursement rates, recommending significant increases to cover the cost of care properly.
While the need for rate reform is evident, the high costs associated with implementation present a significant challenge for the state. With an estimated price tag of $820 million over three years, finding a sustainable solution requires careful consideration and planning. In the meantime, delaying or eliminating the sunset cut on critical access payments is crucial to ensure the continued viability of mental health care providers in Minnesota.
As the state grapples with the complexities of mental health care funding, the importance of prioritizing the well-being of patients and providers cannot be overstated. Addressing the current challenges and working towards sustainable solutions is essential to safeguarding the mental health care infrastructure in Minnesota for years to come.