More than 100 Utahns attended a public hearing to protest a proposed Medicaid payment change some called "devastating" to the treatment of the mentally ill, and several asked the Department of Health to put off making a decision until the Legislature can be consulted.

The Division of Health Care Financing, which administers Medicaid, has proposed that payment for adult psychiatric treatment be based on a Diagnostic Related Group (DRG) or principal diagnosis basis, depending on the patient's age. The impetus for the change, according to Rod Betit, division director, is budgetary. Medicaid needs to make $13 million in cuts mandated by the Legislature, and this is one small piece of that cutting process.Under a DRG system, diagnostic categories are established and billing is matched with categories to determine payment rates. The most common type of adult psychiatric treatment, for example, would allow an average nine days for treatment. So whether a hospital treated a patient in that category for three days or 20, the facility would be paid for the nine days. At a certain point in longer-term care, with pre-approval, exceptions (called outliers) would kick in to cover the costs. Betit said the change is expected to save $270,000 in state and $730,000 in federal funds.

While no one in the audience spoke in favor of the change, numerous representatives of hospitals, mental health treatment facilities, the mentally ill themselves and advocate organizations lambasted the plan.

Keith Stroud, director of the Division of Mental Health, asked the Health Department to hold off on any decision until the proposal can be discussed in legislative interim committees.

Mary Lynn Baer said her daughter suffered her first schizophrenic "break" when she was 17. Since then, she has been hospitalized for months at a time to regulate her medication and control her violence. "I am aghast at the assumption that someone other than her psychiatrist can determine that eight days is adequate to deal with this problem," she said.

Dr. Craig Hummel and Dr. Jed Ericksen, both affiliated with the University Hospital psychiatric unit and Salt Lake Valley Mental Health, expressed the fear that hospitals, which cannot afford the proposed cuts, might refuse to take Medicaid patients with psychiatric problems.

"Beds are at a premium and we have a complex screening process," Hummel said. "Any mental health patient there is very, very ill." Many of the patients are there involuntarily and cannot be treated before a hearing, so some of them would not even receive treatment in the approved time period, he said. "It's unreasonable. People don't respond in eight days. Sometimes not in eight weeks."

"This argument is somewhat irrelevant," Ericksen added. "DRGs are based on a false premise, because we are not treating diagnoses, we are treating human beings." He said the average length of stay at University Hospital for Medicaid patients in the psychiatric unit was 30 days - three times the average proposed by the division.

"We now know that schizophrenia is an organic illness, similar to diabetes. We're not dishonest," said Dr. Robert Burgoyne, psychiatric chair at LDS Hospital. "We keep patients only as long as we need to. But it's even hard now to admit Medicaid patients because of the amount of work involved. It might take 15 minutes to discharge one, and two hours to do all the paperwork."

"There's a misunderstanding that University Hospital lets in all the people who need help," said Jan Harding, administrator of the Utah Alliance for the Mentally Ill. "A lot of people may go without help. When I first heard about this, I thought, `This isn't true.' How can they even consider such a horrible, inhumane way of handling people?"

Betit pointed out that Medicaid money is not to be used for chronic, long-term mental illness anyway. Rather, it is for acute hospital care. Those who need to be in the state hospital, he said, are the responsibility of the state.

Hearing officer John McFarland will make a recommendation to the Health Department as soon as it has finished collecting written testimony, due by June 16. The department director, Dr. Suzanne Dandoy, will then make a decision, which will go to rule making for official approval.