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Report: PA Behavioral health rate hikes essential for vital provider services

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Tuesday, October 22, 2024   

Behavioral-health providers in Pennsylvania face financial instability because of inconsistent rate increases, affecting staff recruitment and retention.

In a survey from the Pennsylvania Council of Children, Youth and Family Services, one provider stated when increases occur, 70% goes to salaries, 20% to occupancy, and 10% to insurance.

Nancy Kukovich, CEO of the nonprofit youth services provider Adelphoi, recommended improved Behavioral Health Managed Care Organizations review processes for rate increase requests, citing insufficient state oversight over the rate request process.

She said their evidence-based multisystemic therapy is in need of a master's degree-level therapist, but due to lack of funding it's been difficult to recruit for this position.

"Its general claim to fame is behavioral health, but it is intense enough that it can keep kids out of the deeper end of the system," Kukovich explained. "They don't have to go to residential. They can get this really intensive service in their home. So, it's of great value to some of the counties, but it's not an inexpensive program."

The survey found Behavioral Health Managed Care Organizations sometimes offer increases during fund surpluses or when federal funds, such as the American Rescue Plan Act, are available. But the raises have not kept pace with providers' budget needs because of market competition and years of minimal increases.

Kukovich pointed out Adelphoi works with five Behavioral Health Managed-Care Organizations and has not received a rate increase in years. She noted they request the rate increase from the organizations and before approving an increase, they typically request information from providers to determine the value of the program.

"They go through a big process of trying to figure out, do we have enough of the service already? Do we need more of it? Is it something that's really important?," Kukovich outlined. "Then we usually have to fill out a whole lot of paperwork about what our costs are, what salaries look like, etc. We submit that information. We find out whether or not we get a rate increase."

Amy Fenn, senior director of Pennsylvania community-based services for Pittsburgh-based provider Pressley Ridge, oversees a variety of programs, including in-home mental health, child welfare, juvenile justice and others. She said the inconsistent rate increases ultimately affects their ability to attract and retain quality staff.

"The main thing is always salaries, because we give merit increases every year," Fenn emphasized. "Without rate increases, we're continuing to have higher costs but we still never feel like we can pay people as much as we as we should be, paying them as much as the work is worth, because without those regular rate increases, we just can't keep up with the expenses."

The survey shows behavioral health providers are competing with school-based jobs offering better pay and hours. To stay competitive, providers have raised salaries by up to 11%, despite limited funding. It recommends linking salary increases to actual costs and exploring flexibility within Behavioral Health Managed Care Organizations.


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