When Medicaid pays the bills: behavioral healthcare providers have suffered as Medicaid has become the dominant public-sector payer.

Agency leaders in the Department of Health and Human Services have taken exception to statements that federal programs are financing a declining portion of mental healthcare. They point out that Medicaid overshadows traditional mental health block grants as the principal public-sector funding source for this care. If federal contributions to Medicaid are counted, then Washington's financing of public-sector behavioral healthcare is indeed growing.

State budget officers and legislators might disagree with the perspective that federal support is growing. Traditional mental health block grants are lump-sum payments to all states by the federal government, based on total state population. In contrast, Medicaid is a state government option for which the federal government provides funding support. State revenues fund roughly 40% of all Medicaid services, and state policies generally determine residents' eligibility for the program. Moreover, states can choose to participate in Medicaid or withdraw from the program; for example, Arizona opted out of Medicaid for the program's first 20 years.

However, Medicaid's growing domination of public-sector mental healthcare is real and was charted several years ago in a SAMHSA-funded study conducted by The Medstat Group ...