Community mental health authorities could create regional entities to deliver services under legislation approved Tuesday by the House Health Policy Committee. The entities are alternatives proposed by the state to the strict federal requirements to require competitive bidding to provide Medicaid specialty services for persons with serious mental illnesses, addictive disorders and developmental disabilities.

The legislation (SB 554-SB 557 and SB 1337) is largely unchanged from the version passed in May by the Senate, though an issue regarding reviews of mental health entities to ensure compliance with state and federal requirements has not yet been resolved.

Under a new Department of Community Health plan seeking a waiver from the strict competitive bidding requirements of federal regulations, first priority for providing specialty services will continue to go through community health service programs or groups of them banding together.   The package of bills allow CMH organizations to establish regional entities that would be eligible to provide those services, to share risks and costs with providing services, revise conflict of interest provisions and require DCH to establish standards for CMH service programs to be designated as specialty prepaid health plans under Medicaid.