Managed mental health program saves money

Pilot program also results in better service

The state of Colorado launched a pilot Medicaid mental health managed care program in August 1995 that, according to preliminary results, saved the state $6.5 million and improved its control over future cost increases. But the best part of the pilot program, which now serves 51 counties and roughly 70% of the state’s population, is that it expanded services and reduced waiting time for Medicaid-eligible patients with mental illness.

"We had seen a pretty dramatic increase in our mental health costs under Medicaid at the same time patients were experiencing service delivery problems, such as long delays in treatment," says Tom Barrett, PhD, director of Colorado Mental Health Services in Denver.

The state asked mental health agencies to submit competitive bids to coordinate services to Medicaid patients at a capitated rate. "In the past, mental health services provided to Medicaid patients were overseen by a combination of different agencies. The pilot set up Mental Health Assessment and Service Agencies, or MHASAs, responsible for overseeing all the services, both public and private, provided to patients in a designated area," Barrett explains.

To help the MHASAs better coordinate services, each patient was assigned a case manager, he says. "Sometimes it was a case manager assigned to do intensive case management, and in some cases it was a therapist designated as a case manager."

MHASA case managers often visited hospitalized patients and actively participated in the discharge planning process, he says. Some MHASAs also arranged with inpatient facilities to place a case manager in the facility to help coordinate services and facilitate discharge planning, Barrett adds.

Although Colorado was concerned about the rising cost of providing mental health care to its Medicaid recipients, Barrett says that cost containment was not the only — or even the primary — goal of the Medicaid mental health managed care program. (For a list of new services available through the pilot program, see story, above.) Other program goals included:

• development of new services critical to treating the mentally ill not previously reimbursed under the Medicaid fee-for-service system;

• a shift from inpatient care to community-based services;

• reductions in waiting lists for mental health services;

• increased assistance and advocacy for consumers of mental health services;

• improved coordination of mental health services;

• additional funds for service to non-Medicaid indigent patients.

Mental Health Services was responsible for monitoring the quality of care provided by the MHASAs throughout the pilot, Barrett says. "We had to make sure that the plans submitted by the MHASAs in their proposals were being faithfully executed. We set up a system for consumer complaints, and our staff went to the agencies regularly to review their records," he says.

In addition to regular MHASA site reviews, Mental Health Services set up several methods of monitoring and measuring the success of the pilot program. Those include:

• reviews of care received at community mental health centers participating in the pilot;

• evaluation of inpatient discharge plans for children and adolescents discharged from state mental health institutions;

• independent evaluation of services by the Western Consortium for Public Health at the University of California at Berkeley;

• monthly data from MHASAs on clinical assessment of all clients admitted to and discharged from services;

• monthly claims data from MHASAs on all services provided to patients;

• monthly Medicaid eligibility data and capitation payment data;

• reports from the State Auditor’s Office on the contracting process and the role of the state mental health institutes under a managed care system;

• independent accounting firm audits of the MHASAs;

• monthly meetings with key staff members from all seven MHASAs to discuss the program and policy issues relevant to all MHASAs;

• ongoing feedback from such program stakeholders as the State Mental Health Planning and Advisory Council and the Capitation Program Advisory Committee;

• data on all complaints received from consumers, family members, and others about the pilot program.

To monitor complaints, Mental Health Services hired a consumer representative to respond to all complaints received about mental health services and programs. During a 12-month period, the state received 48 complaints about the pilot program. Of those, 21 were filed by patients, 20 by family members, two by providers, and five by other interested parties, such as other service agencies.

Of the 48 complaints, 13 were about alleged denial of services, 10 were about specific MHASA staff members, nine were about access to services, eight related to consumer dignity and respect issues, and two were about payment issues. (Mental Health Services used the data gathered from all the sources above to create a list of recommendations for the future of Medicaid managed mental health services in Colorado. For a partial list of those recommendations, see p. 106.)

"About 185,000 Medicaid-eligible people were enrolled in the pilot program, and about 19,000 of those received services through the pilot. We don’t think that 48 complaints in 12 months indicates a widespread problem with the capitated system," Barrett says.