September 18, 2026 · Health and Human Services · 5,343 words · 1 speakers · 11 segments
Exciting things related to ai going on down the hall. So we're going to stay in here. So and this will be exciting as well. But it's not ai. Dan. So but thank you all for joining us. And with that, Senator quick, we are ready for you. Right. Good afternoon, and thank you, chairman hardin and members of the health and human services Committee. My name is dan quick, danquick, and I represent district 35, which is in grand island. I'm here this afternoon to introduce LR 444, which examines cost models and payment models for determining behavioral health service rates. The ultimate purpose of lbe 444 is to learn more on how Nebraska funds its behavioral health services, provide an overview of the past and present cost models, and discuss a way forward for how the division of behavioral health can fairly determine service rates, regardless of whether we are talking about mental health care or substance use disorder treatment, our current reimbursement rates are falling short of actual operating costs. When that happens, providers are forced to cap their services, put families on waitlists or shut down programs entirely. Nebraskans hit a crisis and can't find local care. They end up in emergency rooms or, or, or or the legal system, both of which are a result which result in higher cost to taxpayers. By using a standardized, state driven cost model, we can fix our reimbursement rates and open up access to care. This ensures people actually get the help they need right when they need it. Federal data from substance abuse and mental health services administration proves that smart community investments save dollars, save taxpayer dollars. Outpatient mental health investments yield a 4 to 1 return for every dollar spent, while care for substance use can deliver returns up to $7. By funding local services, we can stop wasting money on expensive emergency room care, hospitals and jails, shifting the burden to more cost effective community care. A proper cost model gives us a standardized tools to measure our health care spending accurately. Instead of being fixed. The model is meant to evolve alongside behavioral health services. It allows the state to establish a clear cost, followed standard accounting practices and transition toward value based, outcome driven care. LR 444 is a step forward, as it gives us the perfect opportunity to design our plan that creates a predictable state budget and expands patient access. When we align our funding with the true cost of delivering care, we protect our providers and ensure nebraskans get timely, valuable care. And I think about what's, you know, we have in grand island, we have a lack of services, and some of it's based on the fact that there's reimbursement rates are lower. So we've lost some services for grand island. They like for aba services. And then we look at even like for our drug and alcohol treatment, we lost that facility.
It's moved to kearney, but we really need something in grand island. I mean, we have a community of 53000 people and we have no no treatment for drug and alcohol use or mental health services. So we're really lacking in those areas. And I think looking at the new assessment model for or looking at the rate rates would really help providers to, to provide the care that we need to, to help individuals. We have some deeply knowledgeable testifiers with us today who served on the front lines of this exact work. Linda whitmer, who served as a deputy director of the division of behavioral health and former executive director of navajo and former Senator annette dubas, are both subject matter experts and will provide a deeper analysis on costs and payment models. With that, I thank you, and I would be happy to answer any questions if I can. Do you want our questions, or would you prefer to wait until these. I can wait unless you want. Unless you really have a burning. Need to ask now. Okay, well, we'll save the hard questions for later. All right. Thank you. Thank you. Linda. Witness. Welcome. Thank you. You've done this before. It's been a while. Okay. It's been a while. So if I mess up, you'll have to let me know. Good afternoon, chairman and members of the hhs Committee. My name is linda witness. That's lindawittmuss. I have worked in health care for over 45 years, primarily in behavioral health care field, including. I spent eight years as a deputy director with the division of behavioral health, Nebraska department of health and human services. I want to commend the Legislature for LR 444 and to take the opportunity to once again examine the cost and payment models that determine behavioral health service rates. As Senator quick mentioned, the public behavioral health system in Nebraska encompasses the diagnosis and treatment of mental health and substance use disorders, and for many years, the division. The division of behavioral health within health and human services conducted a provider rate cost study to build a more data driven. A sustainable model, and to have an internal infrastructure by which to continue that work. The formal project, the base of. It was important to ensure that nebraskans have access to behavioral health care. As stated earlier, when the reimbursement rates fall short of the operating costs, then the services become limited. The waitlists grow, programs close and without access to a range of services. Then we have nebraskans who need help and who end up seeing going to emergency rooms or become involved with the criminal justice system, which has can happen quite frequently as well. The cost model project that was undertaken by the division was a standardized framework that we calculated, analyzed and predicted true costs for delivering a specific unit of care. It applied a quantitative methodology across services. The model was not intended to be static.
It was meant to be somewhat agile, to evolve and be updated as the field and services changed. The approach was an opportunity to ensure that what the state was purchasing was aligned with service standards and service definitions. And then that cost analysis supported better budgeting accounting practices and provided the state with a baseline for comparing revenue streams. Staffing standards, volume and delivery rises, and supported a shift where we eventually want the system to move and is moving to consumer outcomes. The division originally collaborated with the consultant on the cost model project after the passage of 1083. That was in 2004, which had substantial system reforms built into that piece of legislation. D.b.h. Then revised and repeated that study with its own resources in 2016 through 2019. After lp 956 was passed, the 2016 study focused on two particular services that originated out of provider concerns, and that was halfway house residential, which is a substance use service and medication management support services. The dbs team worked and the consultant worked with providers and with regional administration to prioritize. Then what would be the other services that we would look at? And they used a phased, multiyear approach. And the cost study at that time was well received by the Legislature and supported by providers. I want to. Over three minutes, but I think we're going to ask you a bunch of questions. You'll probably be there for. But if I can. Yeah, a little bit. I have I have a little bit on that. I want to briefly outline the cost model study for your consideration. Financial costs have to begin with the base state approved service definitions and the staffing that is expected of the service to be purchased. The process utilized provider self-reported cost information and used standardized tool for each services and then all costs as well as productivity standards were factored into it. Then this was analyzed, compiled and weighted certain elements, and then the rates were drafted from that. And then once those rates were drafted, then we had to compare those for potential impact on consumer access, the available funding, sustainable funding, as well as cross payer system impact. The cross payer system includes medicaid, our partners that were in medicaid as well as in the justice system, who were also payers of like services. The rate study puts Nebraska at a stronger position to understand service delivery costs and the cost drivers, and it replaced a lot of guess work with more clearer data and moved from non fee for service to fee for service rates. And then it leads the way for alternative payment models, which can get to more of your value based or outcome based services providers are expected to manage.
Then under the new rate, which built in costs for data for quality improvement, we added cost in for electronic health records, for trauma informed care, and some things like that were built into the cost model. Can I have you dive into something in particular that you've been coming back to there and again, and it intrigues me because you said we have we're we have a static approach when it was really built to be a bit more dynamic, more agile, I think was the term. That was the premise behind establishing a cost model. Yeah. And so I always like to write the letters y, b, h off in the margin. I still read books at a book as something that has pages. It's a new thing in here in 2021. Anyway, I write ybh often the margin a lot of the time, yes, but how, how are we flexible? How can we be agile in government, particularly in the dhhs world? Kind of unpack that because you have a unique perspective on how to be flexible in a world that often struggles with that. So, so when we funded some of these other services that were based on that, we, you know, brought a couple of those original services up to a rate that was meant their costs. And when you looked at the cost model, our intention was, Senator, it's always a good intention. But I agree with you. It's hard, hard to build that infrastructure. But that was the point of it, is that if I had a cost model and all of a sudden, like we have this year now, extreme variable cost and transportation, you know, or electronic costs or things like that, you could plug those things in maybe at the, in the course of a middle of a year or at the end of the year or at the beginning of a new cost budget cycle to say, how might we have to adjust these rates going forward? It's always an upward because I think that's the fear is that the adjustments never down. It's always up. Well, I will say that when we did the original cost model, we had services that were over and above. That was what was weighted. And you had we had some that were in excess, in excess of what the rest of the field was, and those were adjusted. And those providers had to live with the rate that had been established. Now, I think it's always hard to accommodate when you got variability in staffing, variability in longevity, your high administrative over, over, over costs that are on it.
But when you have a cost model that lays out, this is what you have to report, and each provider reported that, then you weight all of those things and you have to come up with probably not always a satisfactory type of response to it, but you come up with an agreed upon new rate that at least brings you up to cover those base costs of providing the service. Okay, I'll let others ask some questions, but I have some more for you. Any questions? Yes, murph. Thank you. Thank you for being here. I guess my initial response is the federal government doesn't pay cost. Example, medicare. And so I I'm struggling to think that any place at the state level that we're going to be able to pay cost. And what we do for one, we do for all. So it's a it's almost we've had this discussion before. I've been on this Committee for eight years, and this idea has come up before. We entertain it, but we've never seriously entertained it because it hasn't proven to be feasible. I don't know how we do it. So react to that if you will, but. I know I appreciate what you're saying. And I and I realize that we probably are not in a place where we can actually cover absolutely 100% of all operating costs. But what I think is balanced in this is for I'm going to speak just for the division of behavioral health, not I'm not speaking for medicaid, for for how those costs and the cost reports that they do and how they base theirs. But what the division also allows a provider to do is you have sliding fee schedules that are for individuals that also are built in that. So above the rate, whatever the rate might be set at, and it might not cover 100% of cost. There also are fee schedules where you can at least collect a dollar or $2, $10, depending on the income level of a family. So that helps with a little bit of that margin. Some of it, I think what we found when we look at burdensome administrative functions, there's some pieces there that could have been. Addressed a little bit as well to help reduce what some of those operating costs might be. So to answer your question, are we expected to cover 100% of costs? I think we have to cover at least the base, the very base cost of a service to keep it sustained. And over and above that, it to me is a different question. Thank you, thank you. Thank you, chairman. Thank you for being here. Can you talk a little more about workforce retention? Is that workforce retention? Is that the is that the primary driver behind a lot of these costs? And what kind of industries are you competing with? I think salaries.
I think it has been in the last few years in particular, because we've got a significant behavioral health workforce shortages across Nebraska, particularly in the rural areas. So if you're going to retain some staff and some areas, you're probably going to have to offer a greater salary in some instances. We've had people who live in that community and stay there, and then you've got long term staff that are there. So your cost of the of the staff are certainly going to be higher as well. So while a cost model can't solve all of the things and solve 100% of the cost, at least lays out what is the what is the, the layers of the highs and the lows that you're working with to come to at least to a middle, a middle ground. And then the rest of it is what a provider is going to have to address. But if you don't pay for those, that's where we've got we've got places where we don't have services because they can't get providers to work there. Yeah. And what were the major industries that providers are competing with for personnel? Is it what are the major industries? Is it fast food industries that we're competing with for. For workforce workforce? I think it's it's a rural urban issue. I think it's a culture issue. You choose to live more in a more rural area. We used to hear all the time, well, the cost of living in an urban area like omaha or lake of the cost are always going to be higher. Well, then you can balance that out when you have a cost model. And I can see there are certain costs that are in some of the cost model elements that actually hire out in a rural area than they are in an urban area. So you can balance, balance some of, of those things out with it too. The for, for the workforce, we have found it's mostly centered around the eastern side of the state, maybe even grand island. It's got, it's got kearney is not bad. North platte is not bad. But the further west you get or north, I mean, I grew up in south southeastern south dakota, one of the least populated counties in south dakota. There's probably one mental health provider that's in that whole county that's there. You said you try all different kinds of things to bring those services in. And one of the models that this actually contributes to, when you want to move towards improved care, is the integrated health model where we can get behavioral health services integrated into maybe the local primary care practitioner, which is a little more conducive. I think there's a lot of mental health and substance use providers that kind of like to work in that environment.
So, I mean, there's lots of different things that you can do that you hope would enhance a workforce going to those particular areas. Thank you. Tony. This. How many years did you serve in that role. As deputy? Yeah, eight. Eight years. What's your sense of what states are doing it better than us? Because it's helpful when you sit in these chairs not to reinvent the pencil. Yeah. Well. Take a look around and say, who else is writing or coming up with a word processing program? Who can do it? I, I don't know that I can answer that, but I would encourage you. One of the handouts I gave you was from the director that served with me at the time that I was at behavioral health. And she actually is works for the national association of mental health program directors right now. And she answered some of those questions in her handout in comparison to what some other states are doing right now. That may help answer your question. Do you know how much behavioral health is being addressed by telemedicine across rural Nebraska right now? In the last probably three years in particular that I was at the division, we expanded access and improved rates to pay for telehealth by a lot, particularly the covid forced a lot of that, certainly. And we've had providers that are out of state that are doing telehealth and offering it online to consumers in the state. See, that's that's another alternative that could be there too. Okay. So we have flexibility for allowing people from out of state to do that. I'm not the licensing expert, but I know we do that. So okay. Yeah, clearly they've got to be licensed here too. Yeah. In order for us to have any leverage over what they accomplished that way. Well, I was just curious, what else do we need to know? I think if I had just one plug is, is what I was disappointed myself with when we wanted to do the cost model is that we didn't have an infrastructure to, to at least perpetuate it, to take a look, whether within existing resources or funding, we it was not continued. So you couldn't look. And so it rears its head every few years on. It couldn't look. Was that more internal in the department or external? Was it discouraged? Probably a little of both. It's a hard one to bring up when you're looking at limited resources and things like that. And how much is it going to cost us? That's a hard one for me to answer because I'm in health care and I want people to have access to good health care, and we have to pay people to to provide services. Right. Okay. Well, thank you. Appreciate you being here. Thank you. Any other questions? I think. We are. So thank you. Thanks. Annette. Senator. Yes, sir. Welcome. Thank you.
Doesn't want to slide. Darn chair. Good afternoon, chairman hardin and members of the health and human services Committee. My name is annette dubas. A nnettedubas. And I'm here today representing the Nebraska association of behavioral health organizations. I want to thank you for your attention to this issue. During my time with navajo as their executive director, I always referred to provider rates as our bread and butter issue. So many things affect the delivery of behavioral health services, but without adequate provider rates, you cannot build capacity. And without capacity, access to care is impeded. But how do you determine those adequate provider rates? Senator ben hansen recognized this challenge when he introduced LR 392. Most health care entities testified and supported the need to have some kind of methodology, but it was clear the devil was in the details. LR 392 identified the need for some type of rate methodology to support maintaining quality services, meet provider and workforce needs, and ensure fair rates. Navajo appreciates Senator quick's desire to continue this conversation specific to behavioral health rates. As you heard from the previous testimony, our division of behavioral health addressed those details using the expertise of existing staff, and then developed and conducted a cost analysis, which, in our opinion, was a successful endeavor and laid the groundwork for creating sustainable, data driven formula to assess provider rates. At the time of this project, navajo members were very enthusiastic about the approach and felt that it was not just another report for them to complete, but was worth their time and felt it presented a very accurate picture of true costs and met the objectives of effective and high quality services that demonstrated positive outcomes for the patient. It is also important to point out that this model was intended not to be static, but would evolve over time as circumstances changed. As we as you just discussed, navajo had also hired our own consultant to conduct a study of inpatient and outpatient medicaid rates as compared to inflation. And while that study supported our claims that rates were not keeping up, it did not go into the detail that the type of data collected by the divisions of cost modeling at the time of their initial study, halfway house rates in particular, were so low that we were very close to seeing serious reductions in that service or absolute losses of those services. And because of the cost model, we were able to take hard numbers to the appropriations Committee and successfully demonstrate the urgent need for an increase as the division continued their work. We worked closely with the appropriations Committee and the Legislature to bring rates that ranged anywhere from 7 to 35% below the cost of providing the services much closer to the actual costs.
And I want to stress this fact, because we actually had quantitative data, it was much easier to make our case, and it gave the appropriations Committee and the Legislature actual numbers to support their budget. The successful cost model created and implemented in house at far lower costs than hiring an outside firm, gave providers and policymakers a tool that helped to drive a data driven budget that set rates which supported client outcomes and allowed community providers to build capacity and improve access to care. So again, I appreciate your attention to this important matter. I hope we can continue the conversation, and I'll attempt to answer any questions you may have. Thank you. Forgive me for bringing up such boring subjects, but inflation is a thing. What has that done to all of this inflation technology, so on and so forth. Are those pieces looked at, not looked at in your experience with what goes on with provider rates? Is that part of it or are we purely or more looking at can we get anybody hired? Plain and simple. Well, I think historically in the past, when the Legislature set provider rates and the budget, they would kind of look at inflation or those cost of living increases. And that's kind of what they use to determine what, if any, rate increases were given. So it was basically using that, that inflation rate as kind of the the barometer. And how is Nebraska comparing in 2026 to, say, the states around us? What are our what are our rates look like compared to a south dakota or colorado, wyoming, iowa. I couldn't tell you specific. I've been out of the conversation for a little over a year now, and things do continue to change. But I'll also say that trying to do an actual comparison of rates between states isn't always it's not apples to apples, because every states. Give us some for instances. What what difference? Well, states, you know how service definitions are set up. You know how they pay their how they determine their rates. There's different. And I think in director dawson's handout, she kind of refers to some more of those specifics. So I think just kind of in general, we're probably doing okay. As you know, when I left the Legislature, when I left my position with navajo, we had made strides because of the cost modeling report. We were able to work with the appropriations Committee and get some of those rates, especially those rates that were really kind of in the basement, you know, starting to move them up. Okay. Other questions. They don't have any other questions for you. What did I miss? You know, again, I just think having, you know, one of the questions when I met with director dawson, when they first started this, she was explaining to me how it was going to work. And my, my question to her was, okay.
And then what, you know, we get this information and then what? And she kind of just went like this to me. She said, well, then that's up to the Legislature. And those of you who advocate for rates, what we're giving you is information. And so that's what we felt this was when we were able to actually take numbers and show you what went into those numbers and why the rates were what they were. Then it was up to the Legislature. What what could you afford to budget? But at least you had information. And whether you decided to go up or down or just remain flat, that was your decision. But you could make a decision based on some hard data. Very good. Thank you. You bet. Thank you. Senator. Quick. Would you slowly return? Sorry. I'm playing off of your last name, which is, I'm sure been done before. Yes, yes, I actually do it myself once in a while. First, I want to thank my testifiers here, linda and annette, for coming in and and talking about the and giving their experience and and the cost modeling. You know, I think about, you know, sometimes it's a circle of events that happens that, you know, whether it's we're not the. So the medicaid rates maybe are too low. So we can't afford staffing. And maybe that causes some, some people to not want to go into that education field because they don't want to they know it's a low paying job. So I know there was something brought up about who, you know, who they compete for, for people to, to work in those facilities. And I think recently, just in my conversations, I met with unmc with their beacon program. And, you know, the, the kids coming out of the behavioral health education program, through the meds, through the med center. And there is a lack of people, psychologists, counselors, I don't know that techs, I don't know if they get tech training there, that maybe a community college education, but those are really more technical jobs. So it's not someone coming out of a mcdonald's or somebody wouldn't be a welder either. I would tell you that as my that was my trade, but just my experience in talking with people recently, because I want to bring back a drug and alcohol treatment center back to grand island, because it's a need for our community and what we're finding out, we can build the building. But then there's that lack of staff too. So how do we how do we get there? And I think looking at this at the, at, at these costs and, and looking at a cost model to see actually maybe where the rates should be. And then like she said, like annette said, you know, looking at bringing it to the Legislature so we can actually decide if that's something that we can, can do.
And I know with the shortfall in the budget, this year would be definitely not something that we could probably do. But I think it's something in the future that we need to be seriously looking at to make sure that we're providing health care for people with mental health and substance abuse issues, because we're going to pay for it one way or the other. You know, if we don't pay for it through through healthcare, then they go to the emergency room. It'll be through physical health, or they might end up in our court system and end up in our, in our jails and or in our prisons. And so the cost is still there. It's just where are you going to pay for it at? So I'm looking forward to seeing how if we can do something with this, to at least have them do the study and go from there. So thank you. I just had someone text me who's listening watching along here about there are our http dollars that are going in the direction of the telehealth, in particular for the behavioral area. And so that's good to know. And that, you know, we've got hopefully four more years of that kind of funding that's coming our way. So that will help. In these rural areas. Do you have a sense, Senator quick, in terms of total numbers, you mentioned a couple of things that are missing in the grand island area in particular, but are you aware of what our total numbers look like for the state in terms of what we seem to be missing? I don't know the numbers. I know, like for grand island, they had a 23 bed facility and they kept it fairly full. I think it would range anywhere from 15 to maybe 20 people in there at one time. But, you know, right now we don't have any services and we never had any mental health. So I think mary lanning has a facility. They have some mental health. And richard young in kearney. So really, I don't know if out west, if you have anything like that, I shouldn't be asking you questions. But but I don't know if there's anything out in scottsbluff area. We're in the process of actually trying to get something going in. Cumulative. Okay. And so the old hospital is being converted right now. Yeah. But it's sparse. Yeah. And you mentioned telehealth, and I've talked to people about telehealth too. And that really works. Probably you can use it for outpatient services and things like that. But there are, you know, especially for drug and alcohol treatment, those inpatient facilities. I mean, you have to be in, in the facility to get the care you need. And then probably for some mental health issues too, certain mental health diagnoses. Other questions. Seeing none. Thank you. Yeah. Thank you. This concludes for. For. For