The state is making a historic commitment of nearly $200 million during the next three years to “transform” its behavioral health care system for children in foster care and with significant behavioral health needs.

The investment, greenlit during the Thursday meeting of the Interim Finance Committee, marks a significant stride in bringing the state into compliance with the Americans with Disabilities Act, which the U.S. Department of Justice found that the state had violated by “failing to provide services to children with behavioral health disabilities in the most integrated settings appropriate to their needs.”

News of the violation came in a 25-page report the Department of Justice published in October 2022 detailing the state’s failure to provide therapy, crisis support and behavioral support programs that led to hundreds of children being “isolated in residential treatment facilities each year” often far away from home and many in states outside of Nevada “though they could remain with their families if provided necessary, community-based services.”

At that time, the Civil Rights Division announced that it would work with the state to bring Nevada into compliance with federal laws. States that don’t comply risk lawsuits.

Richard Whitley, the director of the state’s health and human services department, said 15 percent of revenues from an expanded tax on hospitals, sometimes referred to as a provider fee, passed during the 2023 legislative session will support the spending. The provider tax is projected to generate as much as $40 million for youth behavioral health services annually, which can be matched with federal dollars.

Specifically, the proposal consists of new policies to screen children more frequently for behavioral health needs and offer children in foster care or with serious emotional disorders or mental illnesses access to a new program funded by Medicaid, a government-funded insurance for people with low incomes or disabilities.

“The goal is to avoid unnecessary institutionalization of children with serious behavioral health conditions and to provide a more robust continuum of care in the community and in the home,” Whitley told lawmakers during the meeting. 

State officials estimate that between 10,000 and 15,000 children up to the age of 21 will be eligible for the new program, which, along with early screening and intervention, will focus on providing therapy, psychosocial rehab services and planned and emergency respite care. The proposal also removes a requirement that families have prior authorization from Medicaid before receiving crisis intervention services.

The new funding is an investment the governor lauded during a March IndyTalks event, saying, “We chose incarceration versus resources and help for the youth,” but the “bright spot” coming out of the DOJ investigation would be unprecedented funding for children’s behavioral health.

“We're going to put $100 million in the biennium to children's mental health, and nobody in the country can say that,” Gov. Joe Lombardo said.

The state has been working with the Department of Justice, and Whitley said the provider fee gave Nevada a head start on addressing the issues compared to other states with similar issues that had to request funding out of existing budgets.

“Unfortunately, for us, there are bureaucratic processes at a federal level that we have to work through, and they take time, and we just thought it was most urgent to initiate these processes now,” Whitley said.

Stacie Weeks, the director of Nevada Medicaid, said the state aims to have the program up and running by January 2025, adding the caveat that meeting the goal depends on how long federal government approvals take.

Weeks said the planned and emergency respite care will provide caregivers with a temporary break and can include in-home day care or residential options for children. She added that respite care services are “one of the most needed and least available services for families with [children who have] behavioral health disorders and foster care families” and cited research showing that families with respite care experience fewer negative outcomes and reductions in stress.

Another service proposed under the plan, “wraparound facilitation,” involves providing a facilitator who helps families access a variety of other in-home services available to them.

Weeks said the state also plans to expand access to intensive in-home services including individual and family therapy, and education for families around how to appropriately care for a child with behavioral health disorders.

The final portion of the proposal would support a step-down group home model for youth and young adults between the ages of 13 and 20. The group homes would serve children with behavioral health needs who are ready to be discharged from a residential treatment center but aren’t ready to return home or who cannot because there is not a foster family prepared to support them, Weeks said.

Weeks described the model as “a group home environment with a shorter length of stay, which is consistent with the DOJ complaint and also our need to help children transition successfully into the community.” 

Though building out a home and community-based model of care is vital, Weeks said the state can’t lose sight of the need to ensure that quality residential and inpatient treatment for children is still available, though it should be focused on getting children back into their communities.

To achieve that, Weeks said the state will pay residential treatment centers a new flat rate of $800 per child per day — an increase in many cases — to ensure providers are aware of the rates and won’t have to negotiate with the state. She added that residential treatment centers treating children younger than nine or children with complex or co-occurring disorders will receive $900 a day.

“Everyone should know what they're getting paid and no child should be [paid for] in a certain part of the state differently than in the other part of a state,” Weeks said. 

She added the state will also set metrics and track and monitor residential treatment centers. The state plans to reward centers in which children have shorter stays and successfully return to their communities.

Though state lawmakers on the Interim Finance Committee approved funding the new services, Nevada Medicaid will return in June to seek approval for additional funding for staffing and implementation.

During the meeting, officials said that most states that have faced similar compliance issues have had to pull funding from their general funds to address the problems. Nevada’s use of the provider fee to create a new dedicated funding source is unique.

Weeks said the funding is expected to grow during the next few years and is an “important step for Nevada children and families” that was supported by the governor’s office, the Legislature and private hospitals “who all came together to make this new funding source for Medicaid possible, and for the children of the state.”