Mental health provider says federal Medicaid halt will lead to 'more crisis'

[MUSIC PLAYING] NINA MOINI: State leaders are responding to a move by the federal government to withhold about a quarter billion dollars in Medicaid funding. The Trump administration says the state has 60 days to share a plan to address fraud, or the freeze could be extended. Here's Vice President JD Vance.

JD VANCE: What we want to see from the Governor of Minnesota, from the entire administration there in Minnesota, is some affirmative steps to make sure that the people who are billing us for Medicaid services are actually providing those Medicaid services.

NINA MOINI: But Governor Tim Walz and members of his administration say they've been taking such steps. State Medicaid Director John Conolly said the state will have to pay the federal government a quarter billion dollars for services already provided, so it's a hit to the state budget. And Connolly says the Trump administration has threatened to withhold more money.

JOHN CONNOLLY: Which would be catastrophic for the Medicaid program, for children, for people with disabilities, for seniors, for hospitals, for rural Minnesotans, for nursing facilities. So the answer-- we feel like this is no longer about fraud because we have been acting for well over a year and a half to fight fraud here in Minnesota. I think you all have reported on that. And we've substantiated a number of actions before CMS engaged us in December. So the claim that this is necessary to make sure that we're serious about fighting fraud is just not credible.

NINA MOINI: The funding pause affects 14 categories of services funded through Medicaid. Late last year, the state began reviewing providers of those services. It's suspended or delayed some payments. The programs include, in part, treatments for substance use disorder and mental health conditions. Joining me to talk about what the funding threat could mean for mental health care in the state is Marcus Schmit. He's Executive Director of the National Alliance on Mental Illness Minnesota Chapter, or NAMI. Thanks for being with us this afternoon, Marcus.

MARCUS SCHMIT: Thanks, Nina.

NINA MOINI: What was your reaction to this news of the federal government holding back this funding?

MARCUS SCHMIT: Well, it was pretty devastating. This is another manufactured crisis. We know that Minnesotans are already struggling following operation Metro Surge. There's a lot of trauma in the community. A lot of this is impacting people with mental illnesses. And this is really the last thing that Minnesotans need right now.

NINA MOINI: Would you give an example of some types of mental health care that could be impacted?

MARCUS SCHMIT: Yeah, so we know that Medicaid in Minnesota is the backbone of our mental health system. So withholding these Medicaid funds is going to cause quite a bit of destabilization for hundreds of thousands of Minnesotans. There are a couple programs specifically that would be impacted. One is IRTS, so it's Intensive Residential Treatment Services. And this program provides quite a bit of support for those individuals who are in need of services to maintain stability.

And by losing Medicaid, access to Medicaid, they're losing medication management, therapy, skills development, transition planning back into community living. This program provides 24-hour residential treatment for adults with serious mental illnesses. So this cut is going to prevent-- it's going to impact IRTS, which is a program that prevents repeated hospitalizations and homelessness.

NINA MOINI: Yeah, I hear you kind of looking through programs to try to understand. I think a lot of people are trying to understand with different news of different threats of different funding being withheld. I wonder, though, people who represent providers of these services and people with disabilities have also said and told us that the state's been too broad in its delay in suspension of some payments. Do you share that view?

MARCUS SCHMIT: Yeah, that's-- well, I think the response to the fraud has been frustrating for a lot of providers in the community. And we know that community mental health providers are already operating on thin margins, so funding and stability for them could mean layoffs, clinic closures, rural service loss. And once those services close, once they're gone, rebuilding them could take years. So we're very concerned, and I know providers in the community are very concerned about the impact of withholding these Medicaid funds.

NINA MOINI: And can you describe for folks who may not be familiar, just the role of NAMI in interacting with different providers and perhaps even getting help and resources to people if they're looking?

MARCUS SCHMIT: Sure. So, NAMI, we're the largest mental health advocacy organization in the state. We work with families and individuals who are impacted by mental illnesses. And we're very concerned about this because we work every day with families trying to access care. We already hear about waitlists and workforce shortages. And Medicaid funding is not abstract. It directly determines whether someone in crisis can get help today, next week, or months from now. So protecting Medicaid, for us at NAMI Minnesota, is critical.

NINA MOINI: How concerned are you at NAMI about fraud or fraudulent providers? What are the statistics that you see related to fraud for Minnesota, compared to other states in these areas?

MARCUS SCHMIT: Well, of course, we have zero tolerance for fraud. There are so many people in Minnesota who are impacted and really need these services. So when we have bad actors in the system, it impacts everybody. We know about 1.4 million Minnesotans are enrolled in medical assistance or Minnesota Care. So that's roughly one in four people in our state. And this is a program that covers half of all children. So when we think about the kiddos, it's really, really critical that we are focused on fraud. I know there are efforts to address fraud. This withhold of $259 million is not a solution to addressing fraud in these programs.

NINA MOINI: You mentioned children, and you mentioned Operation Metro Surge, as it was called. And we know while it's not over for a lot of people-- a lot of people still have fear and some trauma that they're experiencing-- we've heard statistics from some school districts that thousands of more children, or kids, or teens may be seeking that type of care, either within the school district or not, but that the need has grown. And you alluded to that. What have you seen in terms of that need growing for mental health care as a result of the past few months in Minnesota?

MARCUS SCHMIT: Yeah, we know a lot of the kids are impacted by what has transpired in our communities over the last several weeks. We know parents are as well. And so at NAMI Minnesota, what we've really been trying to do is focus on delivering resources to individuals so that they know how to talk to their kiddos who are impacted by what they're seeing and what they're experiencing and starting to think about how do we help set the table for repair and recovery in the community? What are we going to do with partners in the community to really help lay some groundwork, to connect people with the resources that they need to recover from the trauma that we've all experienced over the last several weeks as a result of ICE activity in our communities?

NINA MOINI: Who's reaching out to NAMI to try to work together? Are you hearing from school districts? Are you hearing from employers? Or are you hearing from people you hadn't been hearing from before?

MARCUS SCHMIT: We're hearing from a lot of folks. And we are also reaching out to cross-sector partners to start to think about how we can provide support to our fellow Minnesotans here moving forward. And it's not just providers in the community and those who are providing those really important direct services right now. We are hearing from foundations. We're hearing from some of our business partners in the community. So my hope is is that people really rally, and we can set a table to help enable the conditions to provide the support so that Minnesotans can recover from what's happened over the last several months.

NINA MOINI: We know the legislative session began this month here in the state. I'm assuming that NAMI goes to the Capitol and advocates for different legislation and different things every year. But with the announcement of this withholding of these funds, does that impact the goals that you had?

MARCUS SCHMIT: Oh, sure it does. And I'm here right now. This afternoon, I'll be standing with several other partners who have a vested interest in making sure that this Medicaid program is strong and that vulnerable Minnesotans are being served. Our focus this session, particularly, is on playing defense, incredibly concerned about the potential for cuts, how the state and legislators respond to fraud in some of these programs. We can address the fraud, and we can make sure that delivery of services are still continuing for vulnerable Minnesotans. And at the end of the day, withholding these funds is really going to mean fewer services, longer waits, more crisis, and higher long-term costs too.

NINA MOINI: I know you're probably not the final decision maker, or there could be different routes for this, but are you hearing about any legal actions that anybody is getting ready to take or any kind of fighting back against this, I guess?

MARCUS SCHMIT: I'm sure that there are legal actions underway, and I'll learn more this afternoon. We have a briefing with some legislators. And then there will be a press conference to follow. So everybody's, I think, trying to get as much information as they can right now to really understand what next steps are going to look like here and how we need to unite to prevent this action from happening. I'm really hoping that members of our congressional delegation are able to connect with this administration to do everything that they can to prevent this from happening.

NINA MOINI: Marcus, thanks for your time. I appreciate it.

MARCUS SCHMIT: Thanks so much, Nina.

NINA MOINI: Marcus Schmit is Executive Director of NAMI Minnesota.