Capitation boosts Oregon Medicaid access to substance abuse treatment
Capitation boosts Oregon Medicaid access to substance abuse treatment
While capitating a substance-abuse benefit for Medicaid clients appears to substantially increase access to services, many people still are not receiving treatment, say researchers at Oregon Health Sciences University. The single benefit broadened the array of covered substance abuse treatment services formerly offered to Medicaid patients in the state and improved integration of health care services among providers.
"One of the national policy implications of our findings is that when states are planning Medicaid managed care programs, they can put protections in place that will prevent a reduction in use of services," lead researcher Dennis Deck tells State Health Watch. "One of the key things Oregon did was to integrate the substance abuse benefit with physical health services. It also required the managed care organizations to make referrals to essential community providers, and it expanded eligibility for services."
The report in the Oct. 25 issue of the Journal of the American Medical Association explains that the Oregon Health Plan was started in the early 1990s and a capitated chemical dependency benefit was added in May 1995 to improve the integration of substance-abuse treatment with physical health care.
The benefit covered outpatient treatment services, including regular outpatient, intensive outpatient, and methadone maintenance. Responsi-bility for chemical dependency treatment services for Medicaid recipients was given to 20 prepaid health plans, a marked change from the previous organization and financing of the services.
Under the earlier fee-for-service system, the traditional public sector agencies that delivered services were either freestanding, not-for-profit entities, or part of county governments. Little or no connection existed between the public sector’s substance abuse treatment system and the mental health treatment system or the larger medical-surgical health care system.
Because state officials and other stakeholders were concerned that the rate of participation in the new substance abuse program could be low if health plan officials believed that promoting use of such services was not in their best interest, the state increased capitation payments to encourage primary care practitioners to screen patients for substance-abuse disorders.
Five of the seven largest health plans covering Oregon Health Plan participants are operated by not-for-profit managed care companies. Most of them subcontracted with traditional community providers for substance abuse treatment services, but two integrated plans operated their own programs although they still were required by the state to refer at least half of their substance abuse patients to traditional community providers.
The prepaid health plans reimburse treatment providers through either:
1. modified fee-for-service in which the plan pays a certain percentage of the state rate for each billable service provided to participants;
2. subcapitation in which a fixed fee is paid each month based on the number of enrolled members in the plan’s service area;
3. a case rate that pays a fixed fee for each new treatment admission regardless of the level of care provided.
The research uses access rates for 1994, the year before the capitated benefit was introduced, as a baseline. Statewide, the access rate increased substantially between 1994 and 1997 for Oregon Health Plan recipients ages 12 to 64, the researchers conclude. In 1994 when Medicaid reimbursed substance abuse treatment providers under fee-for-service, the rate was 5.5%. Following capitation, the rate increased to 6.9% in 1996 and 7.7% in 1997 and again in 1998. Mr. Deck says the researchers found differential changes in subgroups between 1994 and 1997. Males in 1997 were more likely to participate in substance abuse treatment than females and experienced a greater increase in access between 1994 and 1997. Whites were slightly less likely to participate than minorities in 1997, and adolescents (ages 12 to 17) were about a third as likely to be admitted to treatment as adults older than 30 in 1997. The disabled were the least likely group to be admitted to treatment during 1997.
The research report indicates that access rates for three of the seven largest health plans "increased dramatically" between 1994 and 1997. Two plans operated by integrated managed care organizations had the lowest rates in 1997, representing a decrease or no change from 1994. Access rates in 1997 varied widely across plans, even after adjusting for differences in case mix. The plan with the greatest penetration of substance abuse treatment services admitted more than twice the percentage of its enrolled members as the plan with the least service use. In 1997, the lowest rate among the seven plans was approximately 7% of enrolled members, while the highest rate was nearly 16%.
Mr. Deck says the plan with the highest overall access rate has a reputation for more extensive outreach among potential treatment users. The plan has no commercial members and sees its mission as serving low-income families. Its medical clinics reportedly screen for substance abuse routinely, and the managed care organization maintains strong ties with social service providers in its service area. Likewise, the plan with the second-highest participation rate has some business ties with the first-place plan, and both contract with the same organization to manage the chemical dependency benefit for their members. Those plans also had the highest percentage of admissions to residential substance abuse treatment, a service that is covered by state funds other than Medicaid.
"Contrary to expectations," Mr. Deck and his colleagues report, "access to substance-abuse treatment substantially increased for Medicaid recipients when Oregon initiated a capitated chemical dependency benefit with the primary care benefit under the Oregon Health Plan. After integration, approximately 40% more enrollees accessed treatment each year. Analyses controlling for member characteristics suggest that the high access rates observed were not simply due to the expansion of the population eligible for Medicaid and do appear to be associated with implementation of an innovative, carefully designed managed care system."
Countering other possible explanations, the research found that managed care did not simply elevate utilization from a low preexisting baseline. "Rather, the access rate increased above levels that already were considerable, at least when compared with national data." Empirical evidence also does not support the notion that because the state’s economy was strong during this period, individuals with less need for treatment tended to find employment and lose Medicaid eligibility, changing the risk profile.
Mr. Deck says that despite the state’s success at increasing access, a substantial gap still exists between access and the level of need for substance abuse treatment. He cites a 1994 study that estimated 16.5% of the respondents likely to be found eligible for Medicaid under the expanded requirements met diagnostic criteria for substance abuse or dependence. "The findings of this study suggest that less than half of those with a substance abuse disorder enrolled in the Oregon Health Plan access publicly funded substance abuse treatment in a single year."
The researchers say it isn’t clear why there are substantial differences in rates among prepaid health plans and types of Medicaid recipients. "The high level of integration of primary care and substance abuse services under the Oregon Health Plan has not been achieved overall, although some evidence suggests that such integration may have been partially responsible for the high participation rates achieved by at least one plan. Contrary to expectations, the most tightly integrated health care system had the lowest access rate."
The three plans with the highest access rates all reimbursed providers under the modified fee-for-service system. Even after adjusting for the influence of member characteristics, that payment method was still a significant predictor of access to treatment.
Mr. Deck says other states can profit from Oregon’s experience. "All states, including Oregon, are going to have to continue to look at how they organize a Medicaid managed care program. We see that Oregon Health Plan will have to make some changes. One large managed care organization plans to withdraw in the Portland metropolitan area, and its members will need to make decisions about enrolling in another plan or paying for services out of pocket. There is concern here and elsewhere that there isn’t enough money in the system for adequate reimbursement. That’s particularly true on the medical side and less true for substance abuse. Oregon has a tight budget, and there’s not enough new money to cover the volume of services and the number of clients. We expect that changes will be made and the plan will survive."
[Contact Mr. Deck at (503) 223-8248.]
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