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3 Medicaid Trends to Watch in 2023 and Beyond


Changes to Medicaid in 2022 repositioned behavioral health’s relevance to the program and its importance to behavioral health.

Medicaid is the single largest payer of mental health services in the nation. And changes to the public health plan for vulnerable populations may further alter the business landscape.

Medicaid, a collaboration between the federal government and states, this year has doubled down on its behavioral health efforts. Medicaid will fund a vast expansion of certified community behavioral health clinics (CCBHC). These all-in-one behavioral health centers were previously limited to a handful of states.

In June, the Bipartisan Safer Communities Act funded a nationwide expansion of CCBHCs.

Medicaid enrollment has increased by about 26% over pre-pandemic levels to about 90 million adults and children. The health plan covers about 27% of the American population. Within Medicaid, about 29% of people have a mental illness or SUD.

Mental illness and substance use disorders (SUDs) disproportionately appear in the Medicaid population. Medicaid covered about 22% of Americans with a mental illness of SUD, according to a Kaiser Family Foundation (KFF) study.

At the state level, no Medicaid program restricted behavioral health benefits for fiscal year 2023. Many expanded them, according to a separate KFF review.

As the end of the year approaches, here are three more trends that could impact Medicaid in behavioral health.

Medicaid IMD exclusion

Since its formation in 1965, Medicaid has largely excluded institutions for mental diseases (IMDs). Facilities with more than 16 beds dedicated to treating behavioral health may not receive Medicaid funding. At the patient level, the exclusion applies to Medicaid enrollees older than 21 and younger than 65 years old. There is an exemption for enrollees 21 or younger to get reimbursement for inpatient psychiatric services.

“We just see it as an access issue,” Pamela Greenberg, CEO and president of the Association for Behavioral Health and Wellness(ABHW), told Behavioral Health Business. “So in the Medicaid arena, that leaves out a whole slew of hospitals that we can’t contract with. In some cases, those are the only facilities that are available to us.”

The ABHW is an insurance advocacy group founded in 1994. Its members cover 200 million people on public and private health plans.

The federal government has made several efforts to expand Medicaid and Medicare enrollees’ access to behavioral health. This week, the Centers for Medicare & Medicaid Services (CMS) rolled out Medicare payment rules that impact behavioral health.

Further, a handful of bills in Congress seek to reform how behavioral health is paid for. However, the midterm elections and the looming end of this session of Congress have frozen legislative action.

ABHW focused less on IMD exclusion reforms this year. Congress’ focus fell more on other important behavioral health regulatory issues, Greenberg said.

Social determinants of health

Many covered by Medicaid have worse-than-average levels of health. They also may face life circumstances that impact social determinants of health (SDOH). Some SDOHs include access to transportation and healthy food as well as housing and financial security. As many as 47% of health outcomes are impacted by SDOHs, according to a federal review.

“Medicaid beneficiaries, by virtue of their low incomes, often experience food insecurity, lack stable housing, and live in areas with substandard environmental conditions,” a recent study by the Medicaid and CHIP Payment and Access Commission states.

It also finds that low-income households face food insecurity at more than double the national average.

“Medicaid beneficiaries more often have specific types of clinical needs — issues related to substance use disorders and serious mental illness are often more prominent and [more severe],” Brad Karlin, executive medical director of behavioral health at Highmark Health, told BHB.

Highmark Health is a health care system that encompasses insurance plans, a hospital system (Allegheny Health Network) and health care support services based in Pittsburgh, Pennsylvania.

Many organizations have turned to partnerships to address SDOHs and behavioral health. In Arizona, seven groups created a business entity focused on SDOHs and behavioral health. Even more have partnered with a federal program to better integrate behavioral health.

“It’s really about collaboration … Medicaid may not pay for housing, so you have to ask [if there] are community resources,” Jim Laughman, president of PerformCare, told BHB. “If you’re worried about where you’re going to sleep next and where your next meal is going to be coming from, prioritizing your mental health gets pushed down the line.”

PerformCare is a behavioral health managed care organization within Newtown Square, Pennsylvania-based publicly backed health plan company that offers Medicare, Medicaid and Marketplace health plans.

Karlin also called out loneliness and social isolation. The coronavirus pandemic worsened the impact of this particular SDOH, he said.

Technology’s reach needs to increase

Technology could help address several challenges for Medicaid beneficiaries living with mental illness. This is especially true for health care access and patient engagement.

“We have to talk about the future of telehealth,” Laughman said. “How do we make sure that it’s guaranteed to be part of the tools that can be used to reach people that may have been resistant or cannot get to in-person care or may not prefer in-person? I think that is one huge area that we need to take a look at.”

Telehealth has a special place in the behavioral health sector. Behavioral health providers have more deeply adopted telehealth than other specialties. The pandemic forced a wide, but temporary, level of all-in adoption for many providers. In 2020, telehealth facilitated nearly half of all behavioral health visits.

Legacy technology may make major changes to dealing with behavioral health crises, Lauren Conaboy said. She is vice president of national policy for Centerstone.

Centerstone is a multi-state behavioral health and human services nonprofit based in Nashville, Tennessee.

Earlier in the year, the federal government expanded the 988 crisis line. It also expanded the availability of mobile behavioral health units. The latter is specifically funded by Medicaid.

Together, Conaboy said, these new tools for states “present an exciting opportunity.”

Those that offer Medicaid plans need to use technology to make care more proactive, Karlin said. Organizations ought to use data and analytics to find people who may need care.

“There are data that can be leveraged for engaging in targeted identification and outreach … so that we’re not waiting for individuals to come to us for care,” Karlin said.



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