Substitution in a Medicaid mental health carve-out: services and costs

The objective is to empirically test the incentives associated with a Medicaid capitated mental health carve-out contract, whether outpatient services (less expensive, inside the contract) and residential treatment center care (costly care, outside of the contract) were substituted for inpatient psychiatric hospitalization used by children and adolescents. Data sources include Medicaid fee-for-service (FFS) claims for the non-capitated comparison sites and for residential treatment center use, and "shadow billing" encounter data for the experimental capitated managed care sites that provided public mental health services for children and adolescents with Medicaid insurance statewide in Colorado from September 1994 to June 1997. Two part least squares regression models are used to decompose services. Managed care sites are compared to sites that remained under FFS financing, before and in two post-periods after the carve-out. Principal findings show that children and adolescents who received mental health services from a capitated managed care provider were significantly less likely to receive inpatient care, and significantly more likely to receive residential treatment center care. In addition, insurance contract design contains financial incentives that affect the amount and mix of clinical care provided to clients by risk-bearing provider agencies. Findings provide evidence of cost substitution from inpatient care both inside the specialty system and outside the carve-out to other child-serving systems.     

The Relationship Between State Capacity Measures and Allocations to Children and Youth with Special Needs Within the MCH Services Block Grant

Objectives To examine the association between state economic, political and health services capacity and state allocations for Title V capacity for Children and Youth with Special Health Care Needs (CSHCN). Methods Numerous datasets were reviewed to select 13 state capacity measures: per capita Gross State Product (economic); governor’s institutional powers and legislative professionalism (political); percent of Children with Special Health Care Needs, percent of uninsured children, percent of children enrolled in Medicaid, state health funds as a percent of Gross State Product, ratio of Medicaid to Medicare fees, percent of children in Medicaid enrolled in managed care, per capita Medicaid expenditures for children, ratios of pediatricians/family practitioners and pediatric subspecialists per 10,000 children, and categorical versus functional state definition of CSHCN (health). Five measures of Title V capacity were selected from the Title V Information System, four that reflect allocation decisions by states and the fifth a state assessment of the role of families in Title V decision-making: ratio of state/federal Title V spending; per capita state Title V spending; percent of state Title V spending on CSHCN; state per child spending on CSHCN; and, state Title V Family Participation Score. OLS regression was used to model the association between state and Title V capacity measures. Results The percentage of the state’s gross state product (GSP) accounted for by state health funds and the per capita GSP were positively associated with the per capita expenditures on all children. The percentage of CSHCN in the state was negatively associated with the ratio of state to federal support for Title V and the per child expenditures on CSHCN. Lower family participation scores were associated with having a hybrid legislature; however, higher family participation scores were found in states using a functional definition of special needs. Conclusions Measures of state economic, political and health services capacity do not demonstrate consistent and significant associations with the Title V capacity measures that we explored. States with greater economic capacity appear to devote more financial resources to Title V. Our finding that per capita CSHCN expenditures are negatively associated with the percentage of CSHCN in the state suggests that there is an upper limit on what states devote to CSHCN. Our current understanding of what state factors influence Title V capacity remains limited.     

Cost shifting in a mental health carve-out for the AFDC population

This study tests whether the managed care vendor shifted costs to Medicaid-reimbursed medical care after the start of the mental health carve-out for the Aid to Families with Dependent Children (AFDC) population in Massachusetts. We used claims data over a 4-year period to estimate expenditures for four types of health services, two of which were paid for by the managed care vendor and two by Medicaid. Total per person public expenditures declined by only about 3 percent. Inpatient psychiatric services were replaced by outpatient psychiatric services and some pharmaceuticals, but overall there was little or no evidence of cost shifting to the medical sector. These results are in contrast to what was found in a sample of Medicaid beneficiaries eligible due to a mental health disability.     

The Nebraska Medicaid managed behavioral health care initiative: Impacts on utilization,expenditures, and quality of care for mental health

This study evaluates the impact of Nebraska's Medicaid managed care program for behavioral health services on mental health service utilization, expenditures, and quality of care. Implementation of the program is correlated with progressive reductions in both total (about 13% over 3 years) and per eligible per month (20%) expenditures and a rapid, extensive decline in inpatient utilization and admissions. The percentage of enrollees receiving any type of treatment for a mental disorder actually increased modestly. Most important, several indicators of quality of care (eg, timely receipt of ambulatory care following discharge from inpatient care and readmission to inpatient care shortly following discharge) suggest that quality of care did not materially change under the carve-out. Although a thorough assessment of quality of care impacts is warranted, this study suggests implementation of a managed care program may allow states to reduce Medicaid expenditures without compromising quality of care.     

Effect of eliminating behavioral health benefits for selected medicaid enrollees

Objective. To determine the extent to which the elimination of behavioral health benefits for selected beneficiaries of Oregon's Medicaid program affected general medical expenditures among enrollees using outpatient mental health and substance abuse treatment services.
Data Source/Study Setting. Twelve months of claims before and 12 months following a 2003 policy change, which included the elimination of the behavioral health benefit for selected Oregon Medicaid enrollees.
Study Design. We use a difference-in-differences approach to estimate the change in general medical expenditures following the 2003 policy change. We compare two methodological approaches: regression with propensity score weighting; and one-to-one covariate matching.
Principal Findings. Enrollees who had accessed the substance abuse treatment benefit demonstrated substantial and statistically significant increases in expenditures. Individuals who accessed the outpatient mental health benefit demonstrated a decrease or no change in expenditures, depending on model specification.
Conclusions. Elimination of the substance abuse benefit led to increased medical expenditures, although this offset was still smaller than the total cost of the benefit. In contrast, individuals who accessed the outpatient mental health benefit did not exhibit a similar increase, although these individuals did not include a portion of the Medicaid population with severe mental illnesses.     

Changes in per member per month expenditures after implementation of Florida's Medicaid reform demonstration

Objective. To determine the impact of Florida's Medicaid Reform Demonstration on per member per month (PMPM) Medicaid expenditures. Data. Florida Medicaid claims data from the two fiscal years before implementation of the Demonstration (FY0405, FY0506) and the first two fiscal years after implementation (FY0607, FY0708) from two reform counties and two nonreform counties. Study Design. A difference‐in‐difference approach was used to compare changes in expenditures before and after implementation of reforms between the reform counties and the nonreform counties. Data Extraction. Medicaid claims and eligibility files were extracted for enrollees in the reform and nonreform counties and collapsed into monthly amounts (N=16,875,467). Principal Findings. When examining the entire population, the reforms had little impact on PMPM expenditures, particularly among SSI enrollees. PMPM expenditures for SSI enrollees increased by an additional U.S.$0.35 in the reform counties compared with the nonreform counties and increased by an additional U.S.$2.38 for Temporary Assistance for Needy Families (TANF) enrollees. An analysis that limited the sample to individuals with at least 3 or 6 months of observations pre‐ and postimplementation, however, showed reduced PMPM expenditures of U.S.$11.15–U.S.$19.44 PMPM for both the SSI and TANF populations. Conclusions. Although Medicaid reforms in Florida did not result in significant reductions in PMPM expenditures when examining the full population, it does appear that expenditure reductions may be achieved among Medicaid enrollees with more stable enrollment, who have more exposure to managed care activities and may have more health care needs than the overall Medicaid population.     

Transportation brokerage services and Medicaid beneficiaries' access to care

Objective. To examine the effect of capitated transportation brokerage services on Medicaid beneficiaries' access to care and expenditures.
Data Sources/Study Setting. The study period from 1996 to 1999 corresponds to the period of a natural experiment during which Georgia and Kentucky implemented transportation brokerage services. Effects were estimated for asthmatic children and diabetic adults.
Study Design. We used difference-in-differences models to assess the effects of transportation brokerage services on access to care, measured by Medicaid expenditures and health services use. The study design is strengthened by the staggered implementation dates between states and within each state.
Principal Findings. For asthmatic children, transportation brokerage services increased nonemergency transportation expenditures and the likelihood of using any services; reductions in monthly expenditures more than offsetting the increased transportation costs. For diabetic adults, nonemergency transportation costs decreased despite increased monthly use of health services; average monthly medical expenditures and the likelihood of hospital admission for an ambulatory care-sensitive condition (ACSC) also decreased.
Conclusions. The shift to transportation brokerage services improved access to care among Medicaid beneficiaries and decreased the expenditures. The increase in access combined with reduced hospitalizations for asthmatic children and ACSC admissions for diabetic adults are suggestive of improvements in health outcomes.     

Child participation in WIC: Medicaid costs and use of health care services

OBJECTIVES: We used data from birth certificates, Medicaid, and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to examine the relationship of child participation in WIC to Medicaid costs and use of health care services in North Carolina. METHODS: We linked Medicaid enrollment, Medicaid paid claims, and WIC participation files to birth certificates for children born in North Carolina in 1992. We used multiple regression analysis to estimate the effects of WIC participation on the use of health care services and Medicaid costs. RESULTS: Medicaid-enrolled children participating in the WIC program showed greater use of all types of health care services compared with Medicaid-enrolled children who were not WIC participants. CONCLUSIONS: The health care needs of low-income children who participate in WIC may be better met than those of low-income children not participating in WIC.     

Managed behavioral health care: a Medicaid carve-out for youth.

This DataWatch assesses the impact of a public sector-managed Medicaid mental health carve-out pilot for North Carolina youth. Access to, volume of, and costs of mental health/substance abuse services are reported. We compared a pilot managed care program, with an incentive to shift hospital use and costs to community-based services, with usual fee-for-service Medicaid. Aggregate data from Medicaid claims for youth (from birth to age seventeen) statewide are reported for five years. We found dramatic reductions in use of inpatient care, with a shift to intensive outpatient services, and less growth in mental health costs. These findings demonstrate that public sector-managed care can be viable and more efficient than a fee-for-service model.     

Associations between State Economic and Health Systems Capacities and Service Use by Children with Special Health Care Needs

To examine the relationship between measures of state economic, political, health services, and Title V capacity and individual level measures of the well-being of CSHCN. We selected five measures of Title V capacity from the Title V Information System and 13 state capacity measures from a variety of data sources, and eight indicators of intermediate health outcomes from the National Survey of Children with Special Health Care Needs. To assess the associations between Title V capacity and health services outcomes, we used stepwise regression to identify significant capacity measures while accounting for the survey design and clustering of observations by state. To assess the associations between economic, political and health systems capacity and health outcomes we fit weighted logistic regression models for each outcome, using a stepwise procedure to reduce the models. Using statistically significant capacity measures from the stepwise models, we fit reduced random effects logistic regression models to account for clustering of observations by state. Few measures of Title V and state capacity were associated with health services outcomes. For health systems measures, a higher percentage of uninsured children was associated with decreased odds of receipt of early intervention services, decreased odds of receipt of professional care coordination, and increased odds of delayed or missed care. Parents in states with higher per capita Medicaid expenditures on children were more likely to report receipt of special education services. Only two state capacity measures were associated explicitly with Title V: states with higher generalist physician to population ratios were associated with a greater likelihood of parent report of having heard of Title V and states with higher per capita gross state product were less likely to be associated with a report of using Title V services, conditional on having heard of Title V. The state level measure of family participation in Title V governance was negatively associated with receipt of care coordination and having used Title V services. The measures of state economic, political, health systems, and Title V capacity that we have analyzed are only weakly associated with the well-being of children with special health care needs. If Congress and other policymakers increase the expectations of the states in assuring that the needs of CSHCN and their families are addressed, it is essential to be cognizant of the capacities of the states to undertake that role.     

Opportunities for Older Children and Adolescents With Disabilities Through the Supplemental Security Income Program

The revitalization of the Supplemental Security Income Program for low income children with disabilities has important implications for state Title V programs for children with special health care needs. Historically, this program has focused primarily on recipients under the age of 7. The files of children between the ages of 7 and 16 referred to Children's Special Health Services, North Carolina's Title V children with special health care needs program from July to August 1991 were analyzed to determine whether there was documentation that children in this age group were receiving recommended services. Reports in the files indicated that most (n = 214, 77%) of the children's needs for specific services were being met. The utility of information that currently exists on older children and adolescents eligible for SSI for assisting Title V children with special health care needs programs in coordinating care is discussed.     

Trends in physician participation in Medicaid. The California experience

Physician participation rates in Medicaid vary widely across the country, and, overall, there has been a decline in recent years. We performed an evaluation in California of whether the expansion of Medicaid managed care and a physician payment increase were associated with an increase over time in the percentage of physicians caring for Medicaid patients. Surveys performed before and after these strategies were used did not reveal an increase over time in physicians' participation in California's Medicaid program. Budgetary constraints will force policy makers to confront the priorities of the Medicaid program, to question the policy objectives for physician participation in Medicaid, and to consider more far-reaching reforms in Medicaid and the overall health care system.     

Increased Children's Access to Fluoride Varnish Treatment by Involving Medical Care Providers: Effect of a Medicaid Policy Change

Background. In 2004, the State of Wisconsin introduced a change to their Medicaid Policy allowing medical care providers to be reimbursed for fluoride varnish treatment provided to Medicaid enrolled children.
Objective. To determine the extent by which a state-level policy change impacted access to fluoride varnish treatment (FVT) for Medicaid enrolled children.
Data Source. The Electronic Data Systems of Medicaid Evaluation and Decision Support database for Wisconsin from 2002 to 2006.
Study Design. We analyzed Wisconsin Medicaid claims for FVT for children between the ages of 1 and 6 years, comparing rates in the prepolicy period (2002–2003) to the period (2004–2006) following the policy change.
Principal Findings. Medicaid claims for FVT in 2002–2003 totaled 3,631. Following the policy change, claims for FVT increased to 28,303, with 38.0 percent submitted by medical care providers. FVT rates increased for children of both sexes and all ages, rising from 1.4 per 1,000 person-years of enrollment in 2002–2003 to 6.6 per 1,000 person-years in 2004–2006. Overall, 48.6 percent of the increase in FVT was attributable to medical care providers. The largest increase was seen in children 1–2 years of age, among whom medical care providers were responsible for 83.5 percent of the increase.
Conclusions. A state-level Medicaid policy change was followed by both a significant involvement of medical care providers and an overall increase in FVT. Children between the ages of 1 and 2 years appear to benefit the most from the involvement of medical care providers.     

Expenditures for mental health services in the Utah Prepaid Mental Health Plan

This article examines the effect of a mental health carve-out, the Utah Prepaid Mental Health Plan (UPMHP), on expenditures for mental health treatment and utilization of mental health services for Medicaid beneficiaries from July 1991 through December 1994. Three Community Mental Health Centers (CMHCs) provided mental health services to Medicaid beneficiaries in their catchment areas in return for capitated payments. The analysis uses data from Medicaid claims as well as "shadow claims" for UPMHP contracting sites. The analysis is a pre/post comparison of expenditures and utilization rates, with a contemporaneous control group in the Utah catchment areas not in the UPMHP. The results indicate that the UPMHP reduced acute inpatient mental health expenditures and admissions for Medicaid beneficiaries during the first 2 1/2 years of the UPMHP. In contrast, the UPMHP had no statistically significant effect on outpatient mental health expenditures or visits. There was no significant effect of the UPMHP on overall mental health expenditures.     

Implementation of medicaid managed mental health care in Iowa: Problems and solutions

Under the terms of a 1915(b) waiver, Iowa implemented a statewide carve-out program in 1995 for the management of mental health services for Medicaid recipients by contracting with a private for-profit corporation. In this commentary, the strategy used to develop the Medicaid managed care contract in Iowa is briefly summarized. Problems that were encountered in program implementation and regulatory attempts to address those issues are described. Suggestions for other states regarding the development, implementation, and oversight of contracts for managed care so that they might be able to deliver comprehensive mental health care services with acceptable standards of care quality are offered. By including appropriate contract specifications, providing mechanisms for oversight, and enforcing standards of care in Medicaid managed care contracts, many problems that occurred in Iowa may have been minimized or avoided. This experience can provide a valuable lesson for similar program initiatives in other states.     

The long-term effects of Medicaid managed care on obstetrics care in three California counties

OBJECTIVE: To evaluate the long-term effects of Medicaid managed care (MMC) on obstetric service use and program costs in California. DATA SOURCES/STUDY SETTING: Longitudinal administrative data on Medi-Cal enrollment and claims and encounters related to pregnancy and delivery services were gathered from three counties--two long-standing MMC counties and one traditional fee-for-service Medicaid county--in California between 1987 and 1992. STUDY DESIGN: We studied Aid to Families with Dependent Children (AFDC) beneficiaries with live singleton vaginal deliveries with associated hospital stays of 14 days or less. Effects of managed care were examined with respect to prenatal visits, length of stay for delivery, maternal postpartum readmission rates, and total program expenditures. Multivariate analyses examined how the relative effect of managed care on service use and program expenditures in each MMC county evolves over time in comparison to fee-for-service. We controlled for length of Medi-Cal enrollment prior to delivery, data censoring, and individual characteristics such as race and age. PRINCIPAL FINDINGS: Prenatal care use is consistently lower in the MMC counties, although all three counties' prenatal care provision is well below the national standard. Drastic increases in one-day-stay deliveries were found: up to almost 50 percent of deliveries in MMC counties were one-day stays. Program cost savings associated with MMC enrollment are unambiguous. CONCLUSIONS: MMC cost savings might have come at the expense of reduced provision of prenatal care and shorter delivery length of stay. Future studies should verify any possible causal link and the effects on maternal and infant health outcomes.     

Medicaid's role in financing health care for children with behavioral health care needs in the special education system: implications of the Deficit Reduction Act

Background: Recent changes to Medicaid policy may have unintended consequences in the education system. This study estimated the potential financial impact of the Deficit Reduction Act (DRA) on school districts by calculating Medicaid‐reimbursed behavioral health care expenditures for school‐aged children in general and children in special education in particular. Methods: Medicaid claims and special education records of youth ages 6 to 18 years in Philadelphia, PA, were merged for calendar year 2002. Behavioral health care volume, type, and expenditures were compared between Medicaid‐enrolled children receiving and not receiving special education. Results: Significant overlap existed among the 126,533 children who were either Medicaid enrolled (114,257) or received special education (27,620). Medicaid‐reimbursed behavioral health care was used by 21% of children receiving special education (37% of those Medicaid enrolled) and 15% of other Medicaid‐enrolled children. Total expenditures were $197.8 million, 40% of which was spent on the 5728 children in special education and 60% of which was spent on 15,092 other children. Conclusions: Medicaid‐reimbursed behavioral health services disproportionately support special education students, with expenditures equivalent to 4% of Philadelphia’s $2 billion education budget. The results suggest that special education programs depend on Medicaid‐reimbursed services, the financing of which the DRA may jeopardize.     

Medicaid managed care and the unmet need for mental health care among children with special health care needs

OBJECTIVE: To determine the association between Medicaid managed care pediatric behavioral health programs and unmet need for mental health care among children with special health care needs (CSHCN). DATA SOURCE: The National Survey of CSHCN (2000-2002), using subsets of 4,400 CSHCN with Medicaid and 1,856 CSHCN with Medicaid and emotional problems. Additional state-level sources were used. STUDY DESIGN: Multilevel models investigated the association between managed care program type (carve-out, integrated) or fee-for-service (FFS) and reported unmet mental health care need. DATA COLLECTION/EXTRACTION METHODS: The National Survey of CSHCN conducted telephone interviews with a sample representative at both the national and state levels. PRINCIPAL FINDINGS: In multivariable models, among CSHCN with only Medicaid, living in states with Medicaid managed care (odds ratio [OR]=1.81; 95 percent confidence interval: 1.04-3.15) or carve-out programs (OR=1.93; 1.01-3.69) were associated with greater reported unmet mental health care need compared with FFS programs. Among CSHCN on Medicaid with emotional problems, the association between managed care and unmet need was stronger (OR=2.48; 1.38-4.45). CONCLUSIONS: State Medicaid pediatric behavioral health managed care programs were associated with greater reported unmet mental health care need than FFS programs among CSHCN insured by Medicaid, particularly for those with emotional problems.     

A comparison of capitated and fee-for-service Medicaid reimbursement methods on pregnancy outcomes.

OBJECTIVE: To determine if the payment method influenced the likelihood of selected obstetrical process measures and pregnancy outcome indicators among Medicaid women. DATA SOURCE/STUDY SETTING: Data from the live birth certificates computer file for 1993 from the State of California. The computer files contain information about the demographic characteristics of the mother, her medical conditions prior to delivery, medical problems during labor and delivery, delivery method, newborn and maternal outcomes, and expected principal source of payment for prenatal care and for hospital delivery. STUDY DESIGN: The study sample consisted of singleton live births to women in the California Medi-Cal program residing in one of two counties in which a mixed-model managed care plan was the method of reimbursement or in one of three counties in which fee-for-service was the payment method. The study and control counties were matched in terms of geographic proximity and sociodemographics. PRINCIPAL FINDINGS: Among Medi-Cal women, the likelihood of low birth weight (LBW) was lower in the capitated payment group than in the fee-for-service payment group even when controlling for maternal and newborn characteristics and adequacy of prenatal care. There was no difference in either the adequacy of prenatal care, the cesarean birth rate, or the likelihood of adverse pregnancy outcomes other than LBW between the two payer groups. CONCLUSIONS: Results of this "natural experiment" suggest that enrollment of pregnant Medi-Cal beneficiaries in capitated healthcare services through a primary care case management system in a county-organized health system/health insuring organization can have a beneficial effect on low birth weight and provide care comparable to a fee-for-service system.