Managing Medicaid Behavioral Health Care

OBJECTIVE: Although Medicaid is the primary payer for public mental health systems, relatively little is known about managed care arrangements at the health plan level. METHODS: A brief cross-sectional survey was customized for each of the 51 Medicaid agencies. Survey data were collected and combined with Centers for Medicare and Medicaid Services data elements. Where possible, analyses were conducted at the state, waiver program, and health plan levels. RESULTS: Findings confirmed that most states were contracting to serve a broad range of Medicaid enrollees. The array of covered benefits was extensive. Health maintenance organization (HMO)-type arrangements accounted for most plans nationally, but 40 percent of plans were specialty carve-outs. Most states used capitation contracts, but a third shared risk with their vendors. A surprising number of states (41 percent) reported using governmental entities as vendors. CONCLUSIONS: By the year 2000, large numbers of public sector clients were being served by HMO-type arrangements. Benefit designs under managed care were perhaps more inclusive than some advocates had feared. The flexibility of capitation financing may have enhanced the ability of health plans to ration care in a clinically informed manner. However, large numbers of vulnerable individuals were receiving care through fully capitated health plans. This finding suggests the need for vigilance by public-sector mental health and substance abuse authorities. Authorities should aggressively pursue opportunities to influence Medicaid policy.