State Medicaid and MCO-CBO contracting. The George Washington University studies

The web of contracts between purchasers, plans, and providers will ultimately shape the American healthcare system. Managed care contracts represent a marked departure from common law principles which allowed healthcare providers to decide when and under what circumstances they would enter into a provider/patient relationship. In two studies supported by the Substance Abuse and Mental Health and Services Administration (SAMHSA), contracts for behavioral healthcare services between Medicaid agencies and MCOs, and between MCOs and community-based mental health and substance abuse organizations were examined. Contracts typically cover both mental health and substance abuse treatment services, but state-to-state variation in procedures and specific services covered is the hallmark of behavioral healthcare contracts across the board.     

Tracking changes in behavioral health services: How have carve-outs changed care?

This special issue of theJournal of Behavioral Health Services & Research on mental health carve-outs brings together some of the latest research on recent policy and market changes affecting behavioral health services. This introductory article provides background information about carve-outs and the managed behavioral health care industry. This article also reviews prior research in the mental health carve-out field.     

Does the quality of care in Medicaid MCOs vary with the form of physician compensation?

A growing fraction of Medicaid participants are enrolled in managed care organizations (MCOs). MCOs contract with primary care physicians (PCPs) to provide health-care services to Medicaid enrollees. The PCPs are generally compensated either via fee-for-service (FFS) or via capitated arrangements. This paper investigates whether the quality of care that Medicaid enrollees receive varies with the means by which PCPs are compensated. Using data for all Medicaid MCO enrollees in a large state, we find that enrollees in MCOs that pay their PCPs exclusively via FFS arrangements are more likely to receive services for which the PCPs receive additional compensation. These enrollees also are less likely to receive services for which the PCPs do not receive additional compensation. These findings suggest that financial incentives may influence the behavior of PCPs in Medicaid MCOs, and thus the quality of the health care received by Medicaid participants enrolled in MCOs.     

Foster Higgins National Survey: trends in behavioral benefits

Most employer-sponsored health insurance plans provide some coverage for mental health and addiction treatment. However, analysis of over 3,000 employer benefit plans reveals wide variation in the level and scope of behavioral health benefits. Of all commercially insured employees and dependents, 77 percent are currently enrolled in health maintenance organizations (HMOs), preferred provider organizations (PPOs), or point-of-service (POS) managed care plans. This article documents the differences among behavioral health coverage packages in these three different types of managed care organizations (MCOs), and the lower levels of behavioral health coverage compared with coverage for other medical care. The author states that some employers are selecting single-specialty managed behavioral carve-out plans specifically to increase benefit levels and improve quality of care.     

Benefit limits in managed behavioral health care: Do they matter?

More than half of Americans with insurance coverage for mental health services are enrolled in plans that carve out behavioral health care services with a vendor specializing in the management of these services. However, utilization management has not taken the place of benefit limitations. Do benefit limits matter? This article reports the percentage of enrollees in managed behavioral health care carve-out plans that encounter benefit limits. Estimates are provided on the impact and savings of imposing benefit limits on enrollees in unrestricted plans. Costs to eliminate benefit limits are estimated to be very small. This study finds that benefit limits do matter but only to a very small number of plan enrollees. Furthermore, the results of this study show that for inpatient limits, children are especially vulnerable. These issues have important implications for discussions about the impact of managed care in mental health and for discussions concerning parity legislation.     

An economic and clinical rationale for changing utilization review practices for outpatient psychotherapy

The growth of managed care has led to greater cost consciousness in the financing and delivery of mental health and substnace abuse services. The authors examine whether pressures to reduce the costs associated with mental health and substance abuse treatment have led to the overapplication of a popular managed care strategy, utilization review (UR), to the management of outpatient psychotherpay benefits. Several arguments are presented highlighting why changing outpatient psychotherapy UR practices would be in the best economic and clinical interests of all involved parties, including payers, managed care organizatios, (MCOs), mental health consumers, and providers. A number of alternatives to the aggressive management of outpatient psychotherapy benefits are outlined and discussed. The views expressed in this article are those of the authors and do not necessarily represent the positions of their organizations.     

Plan characteristics and SSI enrollees' access to and quality of care in four TennCare MCOs

OBJECTIVE: To assess hypotheses about which managed care organization (MCO) characteristics affect access to care and quality of care--including access to specialists, providers' knowledge about disability, and coordination of care--for people with disabilities. DATA SOURCES/STUDY SETTING: Survey of blind/disabled Supplemental Security Income (SSI) enrollees in four MCOs serving TennCare, Tennessee's Medicaid managed care program, in Memphis, conducted from 1998 through spring 1999. STUDY DESIGN: We compared enrollee reports of access and quality across the four MCOs using regression methods, and we use case study methods to assess whether patterns both within and across MCOs are consistent with the hypotheses. DATA COLLECTION: We conducted computer-assisted telephone surveys and used regression analysis to compare access and quality controlling for enrollee characteristics. PRINCIPAL FINDINGS: Although the four MCOs' characteristics varied, access to providers, coordination of care, and access to some services were generally similar across MCOs. Enrollees in one plan, the only MCO with a larger provider network and that paid physicians on a fee-for-service basis, reported their providers were more knowledgeable, and they had more secondary preventive care visits. Differences found in access to specialists and delays in approving care appear to be unrelated to characteristics reported by the MCOs, but instead may be related to how tightly utilization is reviewed. CONCLUSIONS: Plan networks, financial incentives, utilization management methods, and state requirements are important areas for further study, and, in the meantime, ongoing monitoring of SSI enrollees in each MCO may be important for detecting problems and successes.     

Managed Care, School Health Programs, and Adolescent Health Services: Opportunities for Health Promotion

ABSTRACT: The rapid expansion of managed care creates opportunities and dilemmas for those involved in school health and adolescent health promotion. Managed care organizations (MCOs), public health agencies, and school and adolescent health providers share certain common goals and priorities including an emphasis on prevention, cost-effectiveness, and quality of care — and a willingness to explore innovative approaches to health promotion and disease prevention. However, MCOs often face conflicting challenges, balancing the goals of cost containment and investment in prevention. In considering support for school health programs, MCOs will be interested in evidence about the effectiveness of services in improving health and/or reducing medical expenditures. Mechanisms for improving prevention efforts within MCOs include quality assurance systems to monitor the performance of health plans, practice guidelines from professional organizations, and the contracting process between payers and health care providers. Development of partnerships between MCOs and schools will be a challenge given competing priorities, variation in managed care arrangements, structural differences between MCOs and schools, and variability in services provided by school health programs     

Provider turnover in public sector managed mental health care

The present study examines the extent of turnover in mental health provider networks within public sector managed mental health care over a 1-year period and its association to provider and practice characteristics. Telephone interviews were conducted with a sample of mental health services providers listed the previous year in the networks of the 3 public sector managed mental health care organizations operating in Puerto Rico. Thirty-one percent of respondents had dropped out of networks. The drop-out rate was significantly associated (P.05) with increasing number of years in practice and decreasing years under contract. A nonsignificant trend was observed, suggesting that providers with subspecialty training are less likely to drop out. The results may be signaling an emerging problem in public sector managed mental health care. Stability of provider networks should be monitored by state agencies contracting out mental health care.     

Academic public health and managed care.

Health care delivery is going through revolutionary changes. There is a shift toward providing care under the auspices of managed care organizations (MCOs). These MCOs are becoming larger and more comprehensive while increasingly focused on preventive and public health issues. Quality of care, health economics, health services research, data and information systems, quantitative analysis, and the social and behavioral sciences are all becoming important areas of expertise for MCOs and are vital to their successful operation. Thus schools of public health can contribute considerably to MCOs by making their curricula relevant to a managed care environment and having faculty members and research programs that recognize the public health overlap with managed care.     

Dialogue. Carve-out or HMO: which will serve public sector beneficiaries better?

We are pleased to have three distinguished and thoughtful participants take part in this issue's Dialogue section. As the healthcare industry changes dramatically, new ideas and different approaches are being aired and debated. The three panelists in this discussion attempt to meet head on some of the problems that presently beset managed care and give us their expertise about the pros and cons of privatization, integrated systems, carve-outs, and carve-ins. They provide examples of steps that are being taken right now and suggest alternative means to achieving a more responsive and equitable system. Dr. Patterson provides an overview of the history of this question. Dr. Stelovich argues for systems that integrate mental health and medical services in a managed care setting and suggests that they provide the mental health patient with better healthcare delivery. Deborah Happ makes the case for the carve-out approach in which behavioral health and physical health services are separated and put under the direction of managed behavioral healthcare organizations (MBHOs). She cites Tennessee's TennCare Partners Program as an example of a successful endeavor and carve-out alternative.     

Assessment of Quality of Care for Managed Care and Fee-For-Service Patients Based on Analysis of Avoidable Hospitalizations

As managed care has grown to dominate the US health care delivery system, questions have been raised about the impact on the quality of care provided to its enrollees. Two important aspects of health care quality are access to care and the appropriateness of care. This analysis evaluated the occurrence of preventable hospitalizations among managed care (MCO) versus fee for service (FFS) populations to compare access to and appropriateness of preventive, primary, and surgical health care services. Rates of preventable hospitalizations associated with ambulatory sensitive conditions (ASCs) were calculated based on all discharges from Massachusetts hospitals in 1995, and categorized by population characteristics including: age, sex, ethnicity, and insurance status. Multivariate logistic regression models were employed to explain the likelihood of having a preventable hospitalization. Rates of preventable hospitalizations for two of the conditions evaluated (perforated appendix and diabetes complications) were lower for MCO enrollees. For two additional indicators (immunization preventable pneumonia and low birth weight), MCO rates were no different from FFS rates. Results for pediatric asthma were inconclusive. For four out of five quality indicators evaluated, individuals in Massachusetts MCOs are doing better or no worse than their counterparts in FFS plans. Until population-based data on managed care enrollees becomes available, and until such data can be linked to utilization and health outcomes information, investigations into the quality of services provided by MCOs compared to FFS plans cannot be definitive.     

Managed care: past evidence and potential trends

Enrollment in network-based managed care plans has grown rapidly, raising important questions about the actual impact of different types of managed care plans on health care use, expenditure, and quality of care. In this article, we analyze the literature on the performance of managed care plans relative to fee-for-service plans. We find strong evidence that staff- and group-model HMOs have lowered utilization and expenditure relative to fee-for-service while maintaining quality of care. The relatively sparse evidence is more mixed on the performance of newer forms of managed care organizations (MCOs). We also speculate on future trends in network-based managed care. It is likely that employers will increase their economic leverage with managed care firms, accelerating processes that are leading to greater concentration of marketshare among managed care firms. In turn, newer forms of MCOs will increase their economic leverage with providers, which will help MCOs contain costs and monitor quality. Some of the newer MCOs will adapt important features of staff- and group-model HMOs, including increased emphasis on provider selection and reselection.     

Considerations in predicting mental health care use: Implications for managed care plans

Managed care plans and other health care providers face a difficult task in predicting outpatient mental health services use. Existing research offers some guidance, but our knowledge of which factors influence use is confounded by methodological problems and sampling constraints. Consequently, available findings are insufficient for developing accurate predictions, which managed care plans need in order to formulate fiscally responsible service delivery contracts. This article reviews the primary data sources and research on ambulatory mental health services. On the basis of this review, the probability and intensity of outpatient visits are estimated. The primary predictors of use are also examined because they may help managed care plans forecast use by a given population or group of enrollees. Gender, age, race, education, health status, and insurance coverage are several variables surfacing as statistically significant predictors of use. The implications for planning capitated mental health services are discussed.     

Effects of Managed Mental Health Care on Service Use in Urban and Rural Maine

This study takes advantage of a "natural experiment" resulting from the reassignment of all Maine state employees to a managed behavioral health plan in December 1992. By comparing mental health claims before and after that date, the effects of a behavioral health carve-out on mental health utilization by rural and urban beneficiaries were investigated. Following the implementation of the carve-out, the penetration rate, defined as the proportion of beneficiaries who sought help for an affective disorder, increased significantly in both rural and urban areas (P < 0.001). However, the rural penetration rate remained significantly lower than the urban rate (before implementation, 25.8 vs. 52.2 users per 1,000 enrollees, P < 0.001; after implementation, 57.8 vs. 85.8 users per 1,000 enrollees, P < 0.001). Similarly, rural utilization rates, defined as the average number of outpatient mental health visits per user, were significantly lower than urban rates both before and after implementation of the carve-out (before, 9.2 us. 12.9 visits per user, P < 0.001; after, 9.8 vs. 13.3 visits per user, P < 0.001). Before-after differences were not significant. In addition, the proportion of mental health care provided in the primary care setting increased after implementation of the carve-out (from 9.5 percent of all visits before to 12.6 percent of all visits after, P < 0.001). The increase in penetration rates can be attributed, in part, to a member education initiative undertaken during the transition from fee-for-service to managed care. This type of carve-out arrangement does not threaten to reduce access to mental health services, provided the managed behavioral health organization (MBHO) managing the carve-out is willing to accept primary care practitioners as part of its provider network.     

How MDTA can Help Train Persons in Health-Related Occupations

Managed care organizations often tout the availability of clinicians in their provider networks, yet their clients seeking mental healthcare may find it difficult to obtain such care in a timely and effective manner. Using comprehensive data from two counties in New Jersey, the authors examine the prevalence of phantom networks of managed care providers of behavioral health services and the effects of such networks on patients’ wait times and the availability of therapists treating children.     

ADHD treatment in a behavioral health care carve-out: Medications, providers, and service utilization

Children's mental health services are increasingly being managed by managed behavioral health organizations (MBHOs) through carve-outs. Little information is available, however, about services and interventions being received by children whose mental health benefits are carved out. Using claims data, this study explores the treatment of children with a common child psychiatric disorder, attention deficit hyperactivity disorder (ADHD). Children being treated for ADHD see a variety of provider combinations. Children diagnosed with comorbid mood or anxiety disorders are more likely to see a psychiatrist than a primary care physician or therapist, and they are more likely to be in treatment with both a psychiatrist and a therapist than with just one mental health professional. After controlling for severity indicators, costs were significantly lower for patients being treated by just a psychiatrist than for patients seeing both a psychiatrist and therapist. This finding raises the possibility that attempts to save money by splitting treatment may not be cost-effective.     

Medicaid Managed Care and Health Care Access for Adult Beneficiaries with Disabilities

Objective. To evaluate the impact of Medicaid managed care organizations (MCO) on health care access for adults with disabilities (AWDs).
Data Sources. Mandatory and voluntary enrollment data for AWDs in Medicaid MCOs in each county were merged with the Medical Expenditure Panel Survey and the Area Resource File for 1996–2004.
Study Design. I use logit regression and two evaluation perspectives to compare access and preventive care for AWDs in Medicaid MCOs with FFS. From the state's perspective, I compare AWDs in counties with mandatory, voluntary, and no MCOs. From the enrollee's perspective, I compare AWDs who must enroll in an MCO or FFS to those who may choose between them.
Principal Findings. Mandatory MCO enrollees are 24.9 percent more likely to wait >30 minutes to see a provider, 32 percent more likely to report a problem accessing a specialist, and 10 percent less likely to receive a flu shot within the past year. These differences persist from the state evaluation perspective.
Conclusions. States should not expect a dramatic change in health care access when they implement Medicaid MCOs to deliver care to the adult disabled population. However, continued attention to specialty care access is warranted for mandatory MCO enrollees.     

The transition to managed care: experiences of planned parenthood patients.

A review of the findings from a 1996 survey of women visiting a Planned Parenthood clinic reveals that some members of managed care organizations (MCOs) may not be receiving appropriate preventive services and information from their primary care providers. This article details the results of a survey of 115 women who attended a Planned Parenthood of New York City clinic for reproductive health services. Based on these survey findings, the authors provide recommendations for MCOs and traditional providers of reproductive health to improve service delivery.     

Negotiating and contracting in a managed care environment: considerations for practitioners.

The world of integrated service provider networks, managed care providers, and preferred provider systems requires clinical social workers to become skilled in business negotiations, with specific attention to contracting for services. This article focuses on the components of negotiating and successfully competing for contracts to gain access to and participate in provider networks for the delivery of mental health services. The authors identify critical elements involved in contracting for services from the perspective of social work practitioners who are now working with or who plan to work with managed care organizations. This pragmatic approach recognizes the controversial nature of social workers' relationship with managed care organizations and the ethical dilemmas that affect both the quality and quantity of client services.