In most states, individuals with serious mental illness and chronic medical conditions are among Medicaid’s highest-cost, highest-need populations. Only 5% of Medicaid beneficiaries account for more than 50% of total program spending in most states. To add to this, health care costs are as much as 75% higher for patients with chronic conditions who also have mental illness, compared to those patients without a mental illness.

With this in mind, Pennsylvania’s Department of Public Welfare set out to demonstrate the benefits of integrated care for Medicaid beneficiaries with serious mental illness and chronic medical conditions. The initiative, Serious Mental Illness (SMI) Innovations Project, part of the national Rethinking Care Program coordinated by the Center for Health Care Strategies (CHCS), began in 2009 and included two pilots in the southeastern and southwestern regions of the state.

The state partnered with managed care organizations, managed behavioral health organizations, and county behavioral health systems in both regional pilots. Some of the common features for both pilots included:

• Consumer engagement;
• Information exchange across health plans and providers;
• Multidisciplinary care planning; and
• Member education and support around appropriate ED use and follow-up after a hospital discharge.

Although outcomes varied across the two regions, one or both pilots were successful at reducing the rate of mental health hospitalizations, all-cause readmissions, and emergency department visits, as noted below.

• The rate of mental health hospitalizations was an estimated 12% lower (southwestern pilot);
• The all-cause readmission rate was an estimated 10% lower (southwestern pilot); and
• The rate of emergency department (ED) use was an estimated 9% lower (southeastern pilot).

"The SMI Innovations Project was designed to more closely align physical and behavioral health services and improve health care quality through better coordination and information exchange across health plans and providers," said David Kelley, MD, chief medical officer for Office of Medical Assistance Programs at the Pennsylvania Department of Public Welfare. "We are encouraged by the very promising results that point to vital improvements in care for our beneficiaries and potential cost savings for the state."

"States across the country are looking for better ways to control costs and improve quality for Medicaid's highest-need, highest-cost beneficiaries," said Allison Hamblin, CHCS vice president. "In Pennsylvania, improved integration of physical and behavioral health services was an effective means for achieving these goals. The pilot programs' experience offers concrete strategies to guide other states interested in developing similar approaches."