Future Options for Managing Public Mental Health Funding in Washington State

1
Future Options for Managing Public Mental Health
Funding in Washington State

• Revised 10/21/04
• Barbara Mauer, MSW CMC
• Dale Jarvis, CPA
• MCPP Healthcare Consulting

2
Clarification of Terms

• MBHCO managed behavioral health care
  organization.
• A specialty health carrier that bears insurance
  risk for the mental health and/or substance abuse
  benefits component of a health plan.
• Examples include Magellan, United Behavioral
  Health, Value Options, American Psych Systems.
• RSNs bear insurance risk, so are a type of MBHCO
  (but not regulated by the state insurance
  commissioner).

3
Clarification of Terms

• ASO administrative services organization. This
  is not a separate type of organization, but a
  product line that is offered by health carriers,
  including MBHCOs.
• They provide insurance management services for an
  administrative fee, but insurance risk is
  retained by the entity contracting for ASO
  services.
• These services can include access services,
  member services, provider relations (network
  development, credentialing, contracting), care
  management and authorization, quality management,
  billing and reimbursement, information systems
  and decision support, financial management and
  accounting.
• Examples include the UBH contract with Spokane
  RSN (and, in the past, with King and Clark
  Counties).
• Nationally, many public sector contracts with
  MBHCOs have shifted to ASO arrangements due to
  concerns on the public side regarding profits
  taken from public systems, and concerns on the
  MBHCO side regarding risk that is ill-defined or
  exacerbated by the terms of the RFP or contract.

4
Clarification of Terms

• MCO (Managed Care Organization) Medicaids term
  for a health plan that provides health care
  services to Medicaid enrollees.
• Examples include Group Health Cooperative,
  Community Health Plan of Washington and Molina.
• PIHP (Prepaid Inpatient Health Plan) Medicaids
  term for a health plan that provides a more
  limited range of services than an MCO for
  specialty services such as mental health.
• Examples include the Washington State Regional
  Support Networks (RSNs) and Oregons Mental
  Health Organizations (MHOs)
• PAHP (Prepaid Ambulatory Health Plan) Medicaids
  term for a health plan that provides a more
  limited range of services that do not include
  inpatient risk, such as dental or transportation
  there are also two states with mental Health
  PAHPs (Georgia and New York).

5
Clarification of Terms

• Carve out where a specialty benefit is
  separated from management of the overall benefit
  package provided for enrollee members.
• Behavioral Health is just one type of carve out
  it has also been done for radiology, eye care,
  etc.
• Subcapitation of insurance risk is the usual
  financial mechanism.
• Examples are MBHCOs, which grew as an industry
  managing BH carve outs of commercial plans. This
  is still their main line of business.
• Sometimes the purchaser carves out the benefit
  (RSN/PIHPs contracted separately from Healthy
  Options plans for Medicaid enrollees).
• Sometimes the health carrier carves out the
  benefit (Regences past use of Magellan).

6
Clarification of Terms

• Carve in where a specialty benefit is managed
  as a part of the overall benefit package by the
  health carrier through its customary provider
  network and claims management processes.
• Again, BH is just one type of carve inmany
  health plans manage all of their specialty
  benefits through their provider networks and
  claims adjudication.
• Examples include commercial insurance plans that
  pay fee for service to contracted providers of
  mental health and substance abuse services, or
  staff model HMOs.
• Carving in the benefit is a financial
  arrangement, and implies nothing specific
  regarding structural or clinical integration of
  services.

7
Models Across the Country

• In almost half of all states, responsibility for
  management of mental health services is with
  county governments (or groups of
  counties/regions) this includes states with
  managed mental healthcare waivers and states
  without waivers.
• Some carve out the Medicaid MH benefit and still
  retain the county role for managing MH services
  for the non-Medicaid population (Oregon, Iowa).

8
Models Across the Country

• There are Medicaid carve outs in 23 of the 28
  states with Medicaid managed mental healthcare
  plans
• Of these, over half are contracted to Magellan,
  UBH, Value Options, American Psych Systems
• Some carve outs are structured regionally
  (Colorado), often with provider/MBHCO
  partnerships
• Counties also contract with MBHCOs (San Diego,
  CA)
• MBHCO contracts are a mix of capitated risk and
  ASO servicesrisk contracts are converting to ASO
  (Nebraska, Arkansas)
• Some Medicaid carve outs give counties (or groups
  of counties/regions) first right of refusal
  (California, Pennsylvania, Michigan, Washington)

9
Models Across the Country

• Medicaid carve in has been infrequent
• Tennessee carved in briefly, then carved out
• New Mexico carved in, its 2000 waiver renewal
  initially was denied (only 55 of BH premium
  going to services) then reinstated (requires
  that 85 of BH premium go to services) note that
  the three health plans with the carve in
  contracts hired MBHCOs to manage -- a carve out
  inside of the carve in!. The New Mexico system
  has continued to be restructured.
• University of South Florida MH Institute studied
  state systems regarding services for children and
  youth, and concluded that carve outs were better
  than integrated contracts, covering a broader
  array of services with more flexibility

10
Models Across the Country

• The federal requirement for competitive bidding
  and consumer choice of plans in Medicaid managed
  care hasnt gone away.
• Texas NorthSTAR created two plans (Magellan and
  Value Options)Magellan exited, VO continued to
  manage all of program during a rebid, there were
  no bidders, mooting the requirement
• Federal requirement was waived for Michigan and
  Pennsylvania
• The BBA oversight of PIHPs is just unfolding,
  starting with Washington CMS is beginning to
  revisit whether they will continue to waive
  consumer choice of plans.

11
Models Across the Country

• In the private sector, the California
  implementation of parity MH benefit (focused on
  SMI/SED), resulted in most major health carriers
  using MBHCOs.
• Of 8 major plans, 2 continued use, 4 expanded or
  initiated use, 2 continued to subcapitate
  provider groups including the MH benefit

12
Future Options for Managing Publicly Funded
Mental Health Services in Washington State
Fee for Service
State Mental Health System
PAHPs
Managed Care
PIHPs
13
Future Options for Managing Publicly Funded
Mental Health Services in Washington State
Medicaid
FQHCs reimbursed for all clinician services
working within scope of practice
Limitations on service modalities or benefits?
Any willing provider
Fee for Service
Private providers and CMHCs subject to limits
Cannot limit provider network without waiver
Rate differential by provider type?
Yes
CMHC rates
FQHC rates
Non-Medicaid
System Management Strategies
Private Practitioner rates
Fee for Service
Limitations on service modalities or benefits?
Limitations on provider network?
No
FQHC rates
Limitations on funding budgets?
Private practice and CMHC rates
Note FQHC Federally Qualified Health Centers
that are chartered to provide medical services to
indigent and Medicaid persons their scope
includes mental health services.
14
Rate Differential

• In one state, for psychiatric medication service
• CPT-code 90862
• A university medical center clinic is reimbursed
  12.50 via fee-for-service (FFS) Medicaid
• The same visit at a community mental health
  center would be reimbursed 39.92 FFS Medicaid
• At a FQHC, the visit with a psychiatrist would be
  reimbursed at 80 - 88 (variable due to
  quarterly recalculated cost basis) Medicaid

15
Future Options for Managing Publicly Funded
Mental Health Services in Washington State
RSNs or other configuration, with fewer BBA
administrative requirements, but rate setting
issues remain the same
Outpatient Risk
Managed Care PAHPs
Community Inpatient Risk to DSHS for management
?
State Hospital Risk
16
Future Options for Managing Publicly Funded
Mental Health Services in Washington State
17
Mental Health Manager and Provider Options under
Carve-In to Health Plans
This table describes three major options for how
mental health services would be managed under a
carve-in to health plans (e.g. Community Health
Plan, Molina, GHC) and with whom plans might
contract under each option. There would likely
be multiple plans in any service area, each of
which might choose a different option. They
would likely use market rates, which currently
are less than the cost of many CMHC services.
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Quadrant I

• Low BH/low physical health complexity and risk
• BH services in primary care
• BH staff on site
• Consultant to PCPs
• Assessment and triage
• Brief services
• Referral to specialty BH
• Referral to community resources
• BH staff competent in both MH and SA

20
Quadrant II

• High BH/low physical health complexity and risk
• BH services in specialty BH system
• BH case manager assures access to primary care
• BH case manager coordinates with PCP via
  established protocol
• BH staff competent in both MH and SA

21
Quadrant III

• Low BH/high physical health complexity and risk
• Served in the primary/specialty healthcare system
  with BH staff on site
• Consultant to PCPs
• Assessment and triage
• Brief services
• Referral to specialty BH
• Referral to community resources
• BH clinician as physician extender and health
  educator regarding chronic health conditions
• BH staff competent in both MH and SA

22
Quadrant IV

• High BH/high physical health complexity and risk
• Served in both specialty BH and primary
  care/specialty systems
• BH case manager works with all other healthcare
  providers, especially disease management care
  managers (e.g diabetes) to assure coordination
  via an established protocol
• BH staff competent in both MH and SA

23
Carve Out Structural Options
This table describes options for how a mental
health carve-out might be restructured. It is
possible that a licensed health carrier might be
required in order to bear statewide capitated
risk. Organizations that might bid for regional
or county-level PIHPs are 1) MCOs 2) RSNs 3)
Provider sponsored networks (CMHC or private)
4) Health Plans or 5) Counties. With the
implementation of BBA requirements, PIHPs are now
required to look more like licensed health
carriers in the quality, utilization, member
services and other processes.
24
Comparison of Mental Health Coverage for Medicaid
/ Non-Medicaid
This table compares the mental health coverage
that is available for different populations in
Washington State. Note that non-Medicaid persons
cannot be served with Medicaid funds.
25
Funding Comparisons for Under- / Uninsured
Populations
This table describes whether targeted funding
exists to serve under- / uninsured populations.
It compares Washington FQHCs with the current
Washington mental health system as well as the
mental health systems in Oregon and California.
26
State Mental Health Funding Comparisons, Fiscal
Year 2001

• This table compares state mental health funding
  for the top 30 states and how each
• compares with the average of the top 10 states,
  which can be considered a proxy for
• adequately funded states.