Unfinished mental health business for Governor Newsom

While it ponders ambitious new laws to improve mental health, California could strengthen what’s already on the books.

By Mark Kreidler, Capital & Main

This story is produced by the award-winning journalism nonprofit Capital & Main and co-published here with permission.

California Gov. Gavin Newsom last month announced a whopper initiative for the 2024 ballot. Sprawling in its ambition, the proposal would build bedspace for more than 10,000 people dealing with mental health or drug issues. Its structure makes clear Newsom’s conviction that these areas are interrelated, often part of a cycle.

It’s a smart proposal, whatever the prospects for passage. By updating the Mental Health Services Act of 2004, the initiative would direct at least $1 billion a year in local assistance, the money coming from an existing 1% tax on those earning more than $1 million. It would provide funding specifically for homeless veterans.

“This is the next step in our transformation of how California addresses mental illness, substance use disorders and homelessness,” Newsom said as the initiative, carried by state Sen. Susan Talamantes Eggman (D-Stockton), was announced. “People who are struggling with these issues, especially those who are on the streets or in other vulnerable conditions, will have more resources to get the help they need.”

If passed, the measure certainly would represent a significant step, as Newsom noted.

One problem: The state is still struggling to effectively deploy some of the steps it has already taken.

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Among the most glaring deficiencies facing California is the lack of access to mental health services, the need for which grew exponentially during the early stages of the COVID pandemic. But that is hardly a phenomenon confined to those dealing with substance use issues or housing crises.

In fact, the state’s private health giants have ongoing policies that often make it difficult or impossible for their members to schedule timely mental health appointments or follow-ups.

With a California membership of 9.4 million, Kaiser Permanente provides health care to almost a quarter of the state’s residents, yet its performance in providing mental health care has been so ragged that Kaiser was the subject of a multimillion dollar fine in 2013 and a separate settlement with state regulators four years later. In both cases, the insurer was found to be dismally deficient in providing mental health services to its members.

Yet almost nothing has changed. In fact, by last summer, when more than 2,000 Northern California therapists affiliated with the National Union of Healthcare Workers went on strike during contract negotiations with Kaiser, they cited those precise ongoing issues: severe understaffing, leading to drastic delays in appointment times for patients. (Disclosure: The NUHW is a financial supporter of Capital & Main.)

The union and Kaiser eventually settled on a new deal, which among other things provides more “patient management time” for therapists to speak with family, contact social services or perform other support functions that are separate from actually seeing patients. But Kaiser continues to show hundreds of job openings for therapists both in Northern and Southern California, suggesting that patient delays are likely to continue indefinitely.

That in itself is distressing — but it’s also a violation of state law. A bill signed by Newsom in 2021 requires that mental health and substance abuse patients be scheduled for follow-up appointments within 10 days of their initial visit with a provider. And a subsequent measure, signed into law last year, increases tenfold the fines on health plans that delay or deny such timely access to care.

These measures were intended to force health giants like Kaiser to do what they’re supposed to do when it comes to critical areas such as mental health care. The increased monetary penalties, in particular, addressed the reality that for large-scale health providers churning billions of dollars in revenue each year, paying the state’s relatively puny fines was more cost efficient than actually building out their mental health services to the scale their patients need.

But none of that matters if the laws aren’t enforced. And if one thing is abundantly clear, it is that the state agency charged with policing the health care industry doesn’t have the workforce or resources to do its job.

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It falls to the state’s Department of Managed Health Care to enforce laws that demand timely access to mental health services. One example: Last year, the DMHC announced a “nonroutine survey” of Kaiser Permanente’s mental health services — essentially, a special investigation into KP’s failure to address its ongoing problems.

Mary Watanabe, the director of DMHC, said the unusual audit was ordered after her department received a 20% increase in complaints from Kaiser patients about inadequate access to mental health care from 2020 to 2021. Watanabe also told a state Senate select committee last summer that “strike or no strike, as the regulator we are going to hold [Kaiser] accountable” under the law demanding timely access to care.

But here’s the reality: The DMHC’s method of ensuring compliance is to conduct “desk audits” of providers every three years — essentially, asking the health companies to send in their own data on patient visits and staffing levels, then having the department comb the results to see if action is warranted. Other state agencies, including the California Department of Public Health, have the capacity to conduct field investigations, do in-person interviews and view hospital data in real time.

As to the nonroutine Kaiser survey? Announced by DMHC last May, it isn’t even scheduled to be completed until the end of this year, 19 months after its inception — despite the obviously dire circumstances that prompted it. (In response to questions from Capital & Main this week, department spokesperson Kevin Durawa replied, “The DMHC non-routine survey of Kaiser Foundation Health Plan, Inc. [Kaiser Permanente] is still in progress.”)

“In terms of the DMHC, my simple conclusion is that the department is just not structured to enforce mental health parity laws,” said Sal Rosselli, NUHW’s president. “They’re not (adequately) funded, they’re not staffed, they’re not structured — they just can’t do it.”

Union leaders said they’re working with members of the state Legislature on measures that would give the DMHC more teeth, presumably in the form of funding and staffing. In the meantime, Durawa said that the department “applies all the requirements in the law when taking enforcement actions,” including the enhanced fine system that took effect at the start of this year.

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There have been some signs of improvement. Rosselli noted that in the wake of the Northern California therapists’ contract agreement with Kaiser, patients in some parts of the region have begun seeing shorter wait times. “The way we describe it is, we’re stumbling forward,” he said. “There are some service areas where patients are seen in a timely way — not a majority, but progress.”

At the same time, therapists represented by NUHW in Southern California say Kaiser officials there are attempting to reduce patient management time so as to squeeze in more actual patient visits rather than hire more therapists to meet the need. That was one of the issues that prompted the strike in Northern California.

State Sen. Scott Wiener (D-San Francisco) was the author of the bills that mandated the 10-day turnaround for follow-up appointments and enhanced the fines against health plans that ignore the law. While it’s early, he said, the first returns are encouraging.

“We’re still waiting to see the full impact of SB 858, which went into effect just four months ago,” Wiener said. “The state has already imposed several penalties on health plans that failed to provide timely access to care, sending a clear signal that Kaiser and other health plans need to make systemic changes to address these unreasonable delays.”

It is a start. But it depends upon rigorous enforcement, the kind that the DMHC isn’t currently built to provide. While Gov. Newsom’s broad 2024 ballot proposal is meant to shore up coverage gaps for some of the state’s most vulnerable residents, his administration would do well to give its own watchdog department the resources it needs to do the important work of holding health plans accountable to their own patients.

Copyright 2023 Capital & Main

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