Behavioral managed care: Don’t dismiss it, because changes are coming

State purchasers, policy-makers, plan executives, and consumers should not dismiss public sector managed care or assume it has arrived at the end of its cycle. That’s the conclusion of a working paper published by the Lawrenceville, NJ-based Center for Health Care Strategies on what lies ahead for Medicaid behavioral managed care.

"Overall, managed care is viewed as bringing added value to the field," writes Dr. Sandra Forquer, "especially in the area of controlling costs and implementing policies that would have been difficult for the purchaser to put in place without the strong arm of for-profit behavioral managed care companies. While there also is consensus that there had been some very serious design and financing flaws in some early attempts, there was general agreement that the lessons learned from those debacles will make it possible to avoid repeating them."

Ms. Forquer tells State Health Watch there is concern because managed behavioral health care companies are pulling out of what they see as an unprofitable business. Also, the number of requests for proposals and other opportunities for managed behavioral care are decreasing.

"We wanted to look at what opinion leaders thought the movement away from behavioral managed care means to the future of Medicaid managed behavioral health care," she says.

Her interview respondents indicated that public-sector managed care will be designed differently in the future, with three areas targeted as priorities for further examination by states, health plans, providers, and consumers: risk arrangements, the role of safety-net providers, and administrative services only (ASO) contracting.

Adoption of capitation as a funding strategy seems greatly diminished moving forward, according to Ms. Forquer. Respondents indicated that capitation creates incentives for undertreatment and can contribute to for-profits making their margins, however slim they may have become, on care dollars. Opinion leaders suggested that states consider moving to ASO contracts or look to increasing the role of safety-net providers and ensuring their continued participation in the program.

Ms. Forquer says a second practical implication of the survey for its target audiences is that there is definite agreement that integrated care is the preferred model for delivery of mental health, substance abuse, and primary health care services. The report says, "Policymakers and purchasers must address five critical areas if movement in this direction is to be achieved: structural issues, provision of support services, disease management strategies for special needs populations, protection of the behavioral health dollar from being moved to physical health cost centers, and stigma and discrimination in the primary care setting."

For providers, a critical structural issue is time, i.e., the 15-minute visit vs. the 60-minute session. People with serious and persistent mental illness are not seen as treatable in the context of a 15-minute visit. Ms. Forquer says development of evidence-based disease management protocols to address that question should be a high priority. Provision of wraparound services — support and outreach services that go beyond general case management — is another relevant issue for both providers and plans to consider.

The report says behavioral health consumers face a high degree of stigma and discrimination in primary care settings. If such patients don’t feel respected and treated with dignity, or if they feel their needs are not being met in the primary care environment, they won’t enter its doors.

"We could find ourselves back in an era where one waits until one is very ill before seeking help, and hospitalization becomes the only option available," Ms. Forquer says. "Policy-makers, purchasers, plans, and consumers should elevate this issue in their integration discussions. The recommendation of numerous opinion leaders that the psychiatrist should serve as the primary care physician for [behavioral care patients] should actively be explored and piloted."

The report also noted the importance of consumer and family involvement to the quality of behavioral health programs. Children and adolescents have been identified as the population most at risk for the near future, the report says.

Key conclusions reached by the 33 experts Ms. Forquer interviewed were:

  • Public-sector managed behavioral health care is an improvement on the previous models of fee for service and grants, but implementation has varied from excellent to unsatisfactory. While well-executed behavioral managed care programs can integrate fragmented funding streams, improve clinical and financial outcomes, and take controversial actions that would be difficult for a public agency, poorly executed programs can disrupt care, worsen clinical outcomes, degrade local safety nets, and heighten conflict.
  • Future contracts will emphasize shared risk arrangements, a stronger role for safety-net providers, and selective purchase of administrative services.
  • Integration of physical care, mental health care, and substance abuse care is desirable, but there are very few successful models, and most interviewees doubt that it can be accomplished in the near future.
  • Well-structured and -supported consumer participation leads to better programs and policies.
  • Children and adolescents are viewed as the population most at risk for the next few years.

A decade of experience with Medicaid managed behavioral care suggests that success requires full participation from four key stakeholder groups: state leadership, managed behavioral health care organizations, providers, and consumers/families.

Ms. Forquer tells State Health Watch she was interested to find that, almost without exception, the experts she interviewed agreed that an integrated system is preferable to carve-outs, with treatment time being the key issue. "One respondent said the behavioral health setting is time-sensitive, unlike primary care offices, where 15 minutes is all a patient can get," she says.

Ms. Forquer finds behavioral health care and primary care at an important crossroads. "Behavioral health managed care as a system for controlling costs and managing outcomes continues to be a management strategy of choice in many states," she writes. "The future may reveal a shift from capitation to shared risk arrangements with safety net providers. And administrative services only arrangements may become the preferred option with for-profit behavioral managed care companies."

[Download the report from Contact Ms. Forquer at (719) 538-9922.]