Colorado will tinker with success in RFP for managed mental health

How do you improve upon a mental health managed care program that consumers, providers, and advocates support? Very carefully, according to Colorado officials who are seeking proposals for services to take effect Jan. 1, 2001.

"I think our program has been largely successful," says Bill Bush, director of mental health services in the Colorado Department of Human Services in Denver. "But we have lots more ground to cover. Still, we see the new request for proposals (RFP) as fine-tuning, and not a major overhaul."

The scope of Colorado’s effort to contract for Medicaid mental health services is ambitious. The Colorado Medicaid Mental Health Capitation and Managed Care Program was implemented in 1995 in 51 counties, with the remaining 12 counties added in 1998. Approximately 225,000 Medicaid individuals are enrolled, and about 30,000 receive mental health services per year.

Services are provided through Mental Health Assessment and Services Agencies (MHASAs) that hold contracts with the state to manage delivery of mental health services to Medicaid-eligibles.

Eight managed care contractors, one in each region, provide services through 17 community mental health centers, a number of hospitals, some specialty clinics, and several hundred private practitioners. The annual program budget is approximately $125 million.

State officials like to tick off improvements in the programs’ first years, including:

1. new services such as crisis beds, respite care, self-help groups, and home-based services;

2. expansion of community-based services;

3. a shift from hospital inpatient to less restrictive community-based services;

4. increased involvement and empowerment of consumers and their families;

5. steps toward development and use of a recovery model of care;

6. improved coordination of mental health services;

7. creation of an independent ombudsman program;

8. cost savings and increased control over future cost increases.

The new RFP will emphasize a recovery model for adults that assumes they can and do recover from mental illness, says Mr. Bush. It calls for MHASAs to provide innovative supportive services such as clubhouses, drop-in centers, vocational services, self-help groups, housing, and education.

Gaining consumer confidence

While the state emphasizes consumer involvement and empowerment, it has taken time to win consumer confidence. As the program began, consumers were worried that they would not have sufficient choice of providers. "Their worst fears have not come to pass," Mr. Bush says. "We have not had great problems. There has been some choice but not enough yet, and we need to do better."

One problem is that many of the MHASA contractors are community mental health centers and there are consumers who don’t want to receive services from a center because of a perceived stigma.

Mr. Bush says that consumers and advocates have changed their views since reports of their concerns in a 1997 pilot project study.

"From the point of view of a Medicaid patient, managed care has not been a bad thing. They are getting adequate care," says Carol Jean Foos-Garner, volunteer director of MidWest Mental Health Association in Paonia, CO.

Mr. Bush acknowledges consumer concerns over managed care’s capitation strategy and the possibility of incentives to withhold care.

Consumers "still want to see all the problems with the mental health system addressed, and so do we. But we’ve made a shift in people’s thinking, and most consumers would now say we’ve made a big step in the right direction," he says.

Providers also have changed their opinions. Donald Rohner, vice president for managed care at Jefferson Center for Mental Health in Arada, CO, says the program has made "enormous accomplishments in the last five years."

Competition is good!’

"The big advantage at the service delivery end is the type of flexibility we get from this type of funding. We’re not confined to strict CPT codes. We’re not concerned with production of units of service, but with what’s happening with each individual and family we see. The program is working as the theory says it should," he says.

Many providers still are learning how best to incorporate the input of consumers and their family into treatment and decision making and he expects the new RFP to improve consumer direction and service and further expand freedom of choice, Mr. Rohner says. "The community mental health centers think they will be completely cut out if there is total freedom of choice, but I think it’s more likely that they’ll be cut-in’ because of the varied services they can provide in their regions."

One concern that providers and consumers share is whether the new RFP will result in national providers eyeing Colorado as a good place to operate and elbowing out the local contractors.

The existing regional approach was planned carefully to give the community mental health centers an opportunity to be competitive and succeed in winning contracts, Mr. Bush says, but the state is opposed to any sole source contracting to favor the centers.

"Competition is good!" Mr. Bush declares. "Our legislature tends to like and expect competition, and the federal government expects to see it. It’s simply not an option for us to hand the new contract to our current contractors."

The Jefferson community mental health center is not afraid of competition, but Mr. Rohner says he understands the anxiety that some center administrators have about the outcome of the bidding process.

"The state tried to be scrupulous in the design of the new RFP to create a level playing field. It’s the only reasonable and fair thing they could do."

Jefferson does feels somewhat vulnerable, he says, because it is a major provider and a community safety net for indigent non-Medicaid patients who have benefited from the Medicaid managed care programs. "Outside organizations can focus 100% of their resources on the Medicaid population and could beat us on that contract. The non-Medicaid population would suffer because we would not be able to serve the number of medically indigent that we do now.

"We would have to turn people away. We currently try to operate with one standard of care for everyone. But it is possible that we could end up with two very different standards of care — one for Medicaid and one for the non-Medicaid indigent," adds Mr. Rohner.

Contact Mr. Bush at (303) 866-7411, Ms. Foos-Gardner at (970) 527-4388, and Mr. Rohner at (303) 432-5000.