As federal and state health care costs continue to rise, state agency leaders are turning to the managed care industry for solutions to better manage health care costs by reaching more participants. The Congressional Budget Office’s Expanded Baseline Scenario predicts that spending on Medicaid, Medicare, the Children’s Health Insurance Program and health insurance exchange subsidies will increase by more than 2010 percent from 2035 levels by year 60. budgets, with less tax revenue available for Medicaid and other state-funded health programs. At the same time, membership in these programs has increased because of a weakened labor market, lack of viable insurance alternatives, and other economic factors.
Medicaid will play an even more important role in providing insurance coverage for the elderly, blind, and disabled (ABD) with mental illness/substance use disorders after health care reform. Current estimates show that Medicaid will cover 24.3 percent of these individuals when reform is fully implemented in 2019. Medicaid participants with behavioral health disorders are expected to account for about 31.9 percent of the expected increase in total Medicaid spending. These costs are expected to increase by 49.7 percent, not counting the additional costs for many comorbidities that we know exist among Medicaid participants struggling with mental illness. Overall, the needs for appropriate care and health improvement are imperative for states to control their Medicaid budgets. We believe that the only way to achieve these goals is to implement a special behavioral health program.
Benefits of a special behavioral health program
Specialty behavioral health programs are defined as programs that contract directly with managed mental health organizations, separate from the rest of the health care package. These include mental health and substance use disorder specialists. Programs can range from simple administrative services only (ASO) contracts to shared savings and full per capita behavioral health payment models.
The benefits of specialty care programs have been studied since the inception of managed behavioral health care. Evidence shows that they have been successful in reducing costs and maintaining or improving access to care. They have been instrumental in addressing long-standing issues related to utilization, affordability, and the cost of mental health services.
Across the country, behavioral health specialty programs have provided a higher level of access and a higher level of specialty for Medicaid managed care than integrated mental health programs. Through contract language and performance incentives, specialized behavioral health care programs provide recovery-oriented services that are critical for people with serious mental illness and at-risk children. A SAMHSA-sponsored study of Medicaid managed mental health care found that state specialty care programs have a penetration rate of 11%, compared to the 5.6% penetration rate reported by HEDIS for HMO Medicaid nationally in Quality Compass 2000 (1999 data). Penetration of outpatient care was significantly higher in specialty care programs, with SAMHSA research programs averaging 10.9 percent compared to the NCQA average of 5.5 percent.
Some of the program elements that showed particular promise include:
- Specialized behavioral health care programs to address the special needs of populations, such as those with severe and persistent mental illness (SPMI) or those with dual diagnoses.
- Targeted care management and care coordination for people with complex care needs.
- Developing contract performance standards to ensure high quality care for individuals.
- Provider access standards to ensure that participants can receive timely care from providers and specialists.
- Transparency in program design and accountability of contractors and providers involved in the program.
Additional benefits of specialized mental health programs include:
- A single point of accountability with mental health supervision experience for Medicaid enrollees.
- Reduced costs, especially for inpatient services. Savings are greatest at the beginning of managed care programs in behavioral health.
- Access to a network of specialized mental health and behavioral health providers, including community-based providers, offers participants a wide choice of providers.
- Targeted Behavioral Health Performance Guarantees allow clients to manage their program and achieve their desired outcomes.
- Experienced behavioral health professionals provide utilization management in specialized programs and more effectively reduce costs while improving participant outcomes. Traditional Medicaid managed care organizations have not demonstrated the ability or interest in providing specialized services for individuals with serious mental illness unless significant money can be made by reducing benefits.
- Focusing on behavioral health conditions, especially those that accompany illness, can reduce costs across the board.
- Improved treatment coordination ensures that treatment is specialized and integrated into the PCP’s medical environment.
- The use of recovery strategies, person-centered planning, and evidence-based methods helps people with complex and serious needs who require a high level of knowledge to develop treatment plans.
- Demonstrated ability to help with reinvestment in the mental health care delivery system helps with the expansion of alternative services.
- Behavioral health expertise is woven into all client services: clinical services, reporting and data management, and consultation allows each client to analyze the data needed to make informed decisions.