Establishing a capitation policy for mental health and substance abuse services in healthcare reform

In healthcare reform the evolution toward capitated payment systems raises many questions that are unique to behavioral healthcare providers. These issues include how to structure risk contracts, how to set appropriate prices and how to price and cover the severely mentally ill and uninsured. Two possible solutions to the pricing dilemma are described in this article: using prior-use experience for setting prices, with a DRG-type classification formula, and using a combination of past-use formulas and current utilization data.