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.     

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.     

Medicaid managed care and infant health

This paper provides estimates of the effects of Medicaid managed care on prenatal care adequacy and infant birthweights, using a census of 1994 Medicaid births in Wisconsin, where some Medicaid recipients were enrolled in fully capitated health maintenance organizations (HMOs) while others remained in traditional fee-for-service (FFS) systems. The results indicate that while Medicaid patients enrolled in managed care programs may be more likely to receive adequate prenatal care, birth outcomes under managed care are not significantly different from those under FFS financing systems. We conclude that cost savings generated by Wisconsin Medicaid managed care are not coming at the expense of maternity patients' or infants' welfare.     

Medicaid behavioral health care plan satisfaction and children's service utilization

This study examines associations between caregivers' satisfaction with children's Medicaid-funded behavioral health care plans and the likelihood that children with severe emotional disturbance receive mental health services. Data are from a multisite study of managed care versus fee-for-service (FFS) settings. In multivariate logistic regression analyses controlling for demographic, environmental, site, and clinical characteristics, plan satisfaction was associated with greater likelihood of subsequent service use regardless of managed care versus FFS setting. Children in managed care plans were less likely to use intensive residential and non-traditional outpatient services. Efforts to increase plan satisfaction may encourage service use, consequently, improving children's behavioral health outcomes.     

Disparities in use of and unmet need for therapeutic and supportive services among school-age children with functional limitations: a comparison across settings

Objectives. To determine whether family resources predict use of therapeutic and supportive services and unmet needs in medical versus educational settings. Data Source. Children 5–17 years of age with at least one functional limitation (n=3,434) from the 1994 to 1995 Disability Supplement to the U.S. National Health Interview Survey. Study Design. Family resources included the child's type of health insurance, household education level, and poverty status. Therapeutic services included audiology; social work; occupational, physical, or speech therapy. Supportive services included special equipment, personal care assistance, respite care, transportation, or environmental modifications. Need was controlled by child health status and the severity and type of functional limitation(s). Age, gender, race/ethnicity, family size, and structure were covariates. Data Analysis Methods. Logistic regression provided estimates of associations between‐family resources and use of or unmet need for therapeutic and supportive services. Multinomial methods were used to determine therapeutic service outcomes in medical versus educational settings. Principal Findings. Children with public insurance were two to three times more likely to use services than children with private or no insurance regardless of type of service. Household education and public insurance were associated with supportive and therapeutic service use, but for therapeutic services only among children receiving services beyond the school setting. Household education predicted unmet need for both types of services and therapeutic services across settings. Findings should be interpreted cautiously, given the survey's dependence on respondent report to define the need for services and the potential for overrepresentation of children with more severe needs in the public insurance category. Conclusions. Disparities in the use of services by household education level and by type of health insurance across service settings suggests inequitable access among the U.S. policies and programs serving children with functional limitations. Family income and education appear to give families an advantage in obtaining services and in identifying a child's unmet need.     

Health care organization and incentives under emerging models of elderly health care

Health providers are rapidly establishing integrated delivery systems to prepare for managed care and capitation. However, acute and primary services for the elderly continue to be reimbursed through DRGs or fee-for-service (FFS) payments. Different incentives and care patterns are described for providers caring for elderly populations and younger, capitated groups. Pilot programs to provide Medicare services to the elderly may become models or foundations for a future, capitated health system for the elderly. Existing models of elderly health care that receive capitated payments are described in this article, including Social HMOs, TEFRA HMOs. and PACE programs. The potential significance of these programs for the synchrony of operational incentives, comprehensiveness of health care, volume of institutional services, and primary care orientation is analyzed.     

Comparing provider perceptions of access and utilization management in full-risk and no-risk medicaid programs for adults with serious mental illness

This article compares provider perceptions of access to services and utilization management (UM) procedures in two Medicaid programs in the same state: a full-risk capitated managed care (MC) program and a no-risk, fee-for-service (FFS) program. Survey data were obtained from 198 mental health clinicians and administrators. The only difference found between respondents in the FFS and MC sites was that outpatient providers in the MC site reported significantly lower levels of access to high-intensity services than did providers in the FFS site (p<.001). Respondents in the two sites reported similar attitudes toward UM procedures, including a strong preference for internal over external UM procedures. These findings support the conclusion that through diffusion of UM procedures, all care in the Medicaid program for persons with a serious mental illness is managed, regardless of risk arrangement. Implications for mental health services and further research are discussed.     

Use of Social Services by Pregnant Medicaid Eligible Women in Baltimore

Objectives: To use linked health and social service databases to determine differences in the use of social services by pregnant women in different managed care systems. Methods: Comparison of service use by women enrolled in a fee-for-service primary care case management program (Maryland Access to Care or MAC), in a capitated health maintenance organization (HMO), or not assigned to managed care using six state databases. Participants included 5181 women receiving Medical Assistance (MA) and delivering in Baltimore City in 1993. Outcome measures were receipt of WIC, AFDC, and Food Stamps. Results: The overall proportions of women receiving WIC, AFDC, and Food Stamps at delivery were 52.7%, 89.2%, and 62.7%, respectively. Women enrolled in an HMO at delivery were less likely to be receiving WIC (adjusted odds ratios, 0.8, 95% CI, 0.69 to 0.93), AFDC (OR, 0.20; CI, 0.03 to 0.43 for women with prior children and OR 0.13; CI, 0.09 to 0.20 for women without prior children), and Food Stamps (OR 0.77; CI, 0.59 to 0.95 for women with prior children and OR, 0.49; CI, 0.35 to 0.67 for women without prior children) than their MAC counterparts. Women not assigned to managed care also generally were less likely than their MAC counterparts to receive WIC (OR 0.55; CI, 0.46, 0.66), AFDC (OR 1.07; CI 0.83,1.30 for women with prior children and OR 0.24; CI 0.18,0.34 for women without prior children), and Food Stamps (OR 0.31; CI 0.08, 0.55 for women with prior children and OR 0.31; CI 0.23, 0.41 for women without prior children). Conclusions: Although many low-income pregnant women qualify for select social services, receipt of WIC and Food Stamps was low. Increasing efforts are needed by managed care systems and public health agencies to ensure delivery of appropriate services for women.     

Unmet Need and Problems Accessing Core Health Care Services for Children with Autism Spectrum Disorder

To investigate the health care experiences of children with autism spectrum disorder, whether they have unmet needs, and if so, what types, and problems they encounter accessing needed care. We address these issues by identifying four core health care services and access problems related to provider and system characteristics. Using data from the 2005?C2006 National Survey of Children with Special Health Care Needs (NS-CSHCN) we compared children with autism spectrum disorder with children with special health care needs with other emotional, developmental or behavioral problems (excluding autism spectrum disorder) and with other children with special health care needs. We used weighted logistic regression to examine differences in parent reports of unmet needs for the three different health condition groups. Overall unmet need for each service type among CSHCN ranged from 2.5% for routine preventive care to 15% for mental health services. After controlling for predisposing, enabling and need factors, some differences across health condition groups remained. Families of children with autism spectrum disorder were in fact significantly more at risk for having unmet specialty and therapy care needs. Additionally, families of children with autism spectrum disorder were more likely to report provider lack of skills to treat the child as a barrier in obtaining therapy and mental health services. Disparities in unmet needs for children with autism suggest that organizational features of managed care programs and provider characteristics pose barriers to accessing care.     

Capitated Medicaid Managed Care in a Rural Area: The Impact of Minnesota''s PMAP Program

CONTEXT: Although states have had difficulty extending Medicaid managed care (MMC) to rural areas, rural models of capitated MMC are expected to grow in response to new federal regulations and the serious budget problems facing nearly all states. As such, understanding the effects of capitated MMC in rural settings is important for policy considerations. PURPOSE: To evaluate the effects of capitated MMC on beneficiary access and use in rural Minnesota. METHODS: We took advantage of delays in the timing of the introduction of MMC across rural counties in Minnesota to estimate the effects of managed care on adults and children under Medicaid using a difference-in-differences framework. FINDINGS: We found that Minnesota's shift from fee-for-service Medicaid to MMC in its rural counties had little effect on access to health care for either adults or children. CONCLUSIONS: Because Minnesota reports that Medicaid costs under MMC are below expected costs under FFS Medicaid, it appears that the primary accomplishment of Minnesota's rural MMC initiative is one of cost savings: MMC provides the same access to care as FFS Medicaid, but at lower cost. With steep budget deficits in nearly all states, other states may want to consider Minnesota's rural MMC model as a mechanism for reducing their Medicaid costs.     

Use and sources of payment for health and community services for children with impaired mobility

A survey was made of the parents of 380 children whose mobility impairments require the use of a wheelchair, walker, or braces. They were asked about equipment, health services, related services, and family support services used during the previous year. There was extensive use of equipment and traditional medical and health services, such as visits to primary care and specialist physicians; there was moderate use of related health services, such as physical or occupational therapy and child counseling; and there was very little use of community-based family support services, such as respite care, after-school care, homemaker services, and summer camp. The cost of health care, particularly medical specialty care, was defrayed in large part by private insurance and public programs, such as Medicaid and Title V Programs for children with special health care needs, while financial support for related services, such as physical therapy and speech therapy, came largely through the schools. Compared to funding for health and related services, financial aid for community-based family support services is largely lacking.     

What happens when capitated behavioral health comes to town? The transition from the fort bragg demonstration to a capitated managed behavioral health contract

Capitated managed care contracts for behavioral health services are becoming more prevalent across the country in both public and private sectors. This study followed the transition from a demonstration project for child mental health services to a capitated managed behavioral health care contract with a for-profit managed care company. The focus of the study was on the impact—at both the service system and the individual consumer level—pertaining to the start-up and maintenance of a capitated managed behavioral health program. A case study using multiple methods and multiple sources of information incorporated a program fidelity framework that examined micro to macro levels of program implementation. The findings of this study include the following: access to services decreased, the lengths of stay and average daily census in the more intensive levels of treatment declined, difficult-to-treat children were shifted to the public sector, and ratings of service system performance and coordination fell.     

An Examination of State Medicaid Financing Arrangements for Early Childhood Development Services

Objective: To determine the extent to which Medicaid finances early childhood development services, either on a capitated or fee-for-service basis, and to gauge future interest in financing such services. Methods: We analyzed state Medicaid managed care contracts in effect in April 1998 in 45 states using capitated arrangements for children at the end of 1997 to ascertain whether state Medicaid agencies financed any of six types of early childhood development services, including parent counseling, home visiting, comprehensive assessments, telephone advice lines, parent education classes, and case management. We also conducted structured telephone surveys with the same 45 states' Medicaid managed care directors. Results: Overall, state Medicaid agencies finance few early childhood development services on a capitated or fee-for-service basis. Case management was the most popular service to be paid for fee-for-service. Parent education was the most popular service required in managed care contracts. Parent counseling and telephone advice lines for information on child development or parenting issues were the services least likely to be reimbursed through either Medicaid financing mechanism. Conclusion: To date, Medicaid agencies generally have not required managed care plans to cover early childhood development services, nor have they paid for such services on a fee-for-service basis. However, 17 states expressed an interest in expanding early childhood development services, particularly home visiting, parent education, and telephone advice lines. Nonetheless, several challenges exist in expanding Medicaid financing, including the need for more evidence on cost-effectiveness and greater political support for promoting early childhood development.     

Utilization of services in Arizona's capitated Medicaid program for long-term care beneficiaries.

The Arizona Long-Term Care System (ALTCS), Arizona's Medicaid program for long-term care (LTC) beneficiaries, capitates contractors to provide a full range of acute and LTC services to financially-eligible beneficiaries determined to be at risk of institutionalization. This article compares the acute care utilization experience of LTC beneficiaries in ALTCS with those in a fee-for-service (FFS) Medicaid program, linking data from both the Medicare and the Medicaid program files. Patterns of use observed in Arizona seem more consistent with a managed care environment than those observed in the FFS comparison. Rates of acute care utilization observed for both the capitated and the FFS program should be of interest to States considering incorporating LTC beneficiaries into their Medicaid managed care program.     

Making capitated Medicare work for women: policy and research challenges.

Growth in capitated Medicare has special ramifications for older women who comprise the majority of Medicare beneficiaries. Older women are more likely than men to have chronic conditions that lead to illness and disability, and they often have fewer financial and social resources to cope with these problems. Gender differences in health status have a number of important implications for the financing and delivery of care for older women under both traditional fee-for-service Medicare and capitation. The utilization of effective preventive interventions, new therapeutic interventions for the management of common chronic disorders, and more cost-effective models of chronic disease management could potentially extend the active life expectancy of older women. However, there are financial and delivery system barriers to achieving these objectives. Traditional FFS Medicare has gaps in coverage of care for chronic illness and disability that disproportionately impact women. Managed care potentially offers flexibility to allocate resources creatively, to develop new models of care, and offer enhanced benefits with lower out-of-pocket costs. However, challenges to realizing this potential under Medicare managed care with unique implications for older women include: possible gender bias in capitation payments, risk selection, inadequacy of risk adjustment models, benefit and market instability, and disenrollment patterns.     

Service-level selection by HMOs in Medicare

In the federal Medicare program, contracting health maintenance organizations (HMOs) are paid on a capitated basis. There has long been concern that an "adverse selection" of risks remain in the traditional fee-for-service (FFS) sector, since beneficiaries with low costs may leave the FFS sector and join the HMOs. The distortion associated with this form of selection is that health plans may design their mix of health care services in order to effectuate favorable selection. This paper scrutinizes patterns of HMO membership and costs by service in the FFS sector for evidence consistent with the hypothesis that HMOs engage in service-level product distortion. We develop a multi-service model of choice between FFS and HMOs and show that if the HMO sector is underproviding (overproviding) a service relative to the FFS sector, we should observe a positive (negative) correlation between the HMO market share and average costs of those remaining in the FFS sector. We estimate the correlation between the HMO market share and the average FFS costs for different health care services using Medicare data for 1996. We find evidence indicating that there exists significant service-level selection by HMOs.     

How does managed care manage the frail elderly? The case of hospital readmissions in fee-for-service versus HMO systems

OBJECTIVES: This study examined whether hospital readmissions varied among the frail elderly in managed care versus fee-for-service (FFS) systems. SETTING AND PARTICIPANTS: Random sample of 450 patients, aged 65 and over, from a large vertically integrated health care system in San Diego, California. Participants were receiving physician-authorized home health and survived and 18-month follow-up period. MAIN OUTCOME MEASURES: Multiple logistic regression analyses were used to conduct comparisons of readmissions and preventable readmissions by plan type. Two methods to identify preventable readmissions were developed, one based on a computerized algorithm of service use patterns, and another based on blind clinical review. RESULTS: The odds of having a preventable hospital readmission within 90 days of an index admission were 3.51 (P = 0.06) to 5.82 (P = 0.02) times as high for Medicare HMO enrollees compared to Medicare FFS participants, depending on the method used to assess preventability. Readmission patterns were similar for Medicare HMO enrollees and FFS study participants dually enrolled in Medicare and Medicaid. CONCLUSION: In this group of frail elderly Medicare beneficiaries, those enrolled in an HMO were more likely to have a preventable hospital readmission than those receiving care under FFS. These results suggest that policies promoting stringent approaches to utilization control (e.g., early hospital discharge, reduced levels of post-acute care, and restricted use of home health services) may be problematic for the frail elderly.     

Effects of managed care on southern youths' behavioral services use

Children and adolescents' access to Medicaid-financed behavioral health services was examined over 8 years in Tennessee (managed care) and Mississippi (fee-for-service [FFS]) using logistic regression. Managed care reduced access to behavioral care overall, overnight services (e.g., inpatient), and specialty outpatient services. Managed care also restricted the relative use of overnight and specialty outpatient for children and adolescents. However, managed care had pronounced effects on use of case management services. We also document differences in access and mix of behavioral services used over time by race, sex, age, and Medicaid enrollment category.     

Estimating pediatric primary care provider visits in a capitated environment: encounter vs. claims databases

PURPOSE: To evaluate the accuracy of insurance claims data indicating underutilization of primary care visits by children with special health care needs (CSHCN). DESIGN: The study was a retrospective comparison of primary care provider (PCP) utilization by 1,131 CSHCN, using secondary data from electronic claims-and-encounters databases in a Medicaid health maintenance organization (HMO) and a commercial HMO. METHODOLOGY: The study was conducted at the Children's Clinics for Rehabilitative Services (Children's Clinics) in Tucson, Ariz., a provider of specialty care to CSHCN. All the children in the study were eligible for specialty services under Arizona's statewide program for CSHCN and were simultaneously enrolled, from Oct. 1, 1995 through Sept. 30, 1996, in either one or both of the managed care plans for their primary care. Identical PCP-visit information for the same 1-year period was collected from the plans' claims-and-encounters databases, and the number of primary care visits as computed from both databases was compared. PRINCIPAL FINDINGS: Health plan claims data show that only 14 percent of the patients visited a PCP during the course of a year. The encounter data indicate that 59 percent of the same cohort had PCP visits. CONCLUSIONS: Encounter databases capture more information about PCP visits than insurance claims databases in capitated environments.     

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.