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Joe Parks, MD, and Shannon Mace, JD, MPH

Vice President of Practice Improvement and Senior Practice Improvement Advisor, respectively, for the National Council for Behavioral Health

Managed Care Contracting: When Good Intention and Reality Collide

August 6, 2020 | Population Health | Comments
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For several decades, state Medicaid programs have transitioned to comprehensive managed care carve-in models that deliver behavioral health benefits through managed care organizations responsible for administering physical and behavioral health services.

While these models were implemented to increase integrated care delivery, reduce costs and streamline administrative functions, in practice, they have had significant detrimental effects on behavioral health providers. Rushed reforms have resulted in delayed payments, cash flow challenges and other barriers.

The behavioral health provider community has voiced these challenges; however, there has been little research to demonstrate statewide experiences and identify recommendations to improve managed care contracting.

To better understand the impact of Medicaid managed care reforms on providers, the National Council for Behavioral Health contracted with independent consultants led by Alicia D. Smith, MHA, to conduct an analysis of behavioral health providers’ and other stakeholders’ experiences. The report, “The Transition of Behavioral Health Services into Comprehensive Medicaid Managed Care: A Review of Selected States,” describes the current Medicaid managed care environment in the U.S., details experiences from 10 states and provides recommendations for more effective Medicaid managed care contracting for behavioral health.

The report authors analyzed existing state Medicaid contracts and conducted key informant interviews with 28 diverse stakeholders, including behavioral health providers, state behavioral health agencies, a behavioral health managed care organization, a state legislator, behavioral health provider associations and others. The study identified systemic barriers to behavioral health providers’ effective participation in managed care, including:

  • Lack of true, historical collaboration between leadership and staff from state Medicaid agencies and state behavioral health authorities.
  • Lack of investment in – and uneven use of – health information technology and health information exchange.
  • Lack of financial reserves in behavioral health provider organizations to manage with interrupted cash flow.
  • Lack of administrative infrastructure within behavioral health provider agencies to manage increased administrative demands from multiple managed care plans.

In addition to providing a clear assessment of the problem, the report details several recommendations that should be put in place to better protect and serve behavioral health providers in future managed care contracting. Recommendations include:

  • Use existing data resources to document the understanding of the behavioral health service system, including an analysis of population demographics, chronic health conditions, cost drivers and total cost of care.
  • Assess current provider and service capacity and determine whether a sufficient network is available to attend to population health needs.
  • Describe and quantify outcomes to be achieved with carve-in, including health, quality of care, financial and member experience outcomes and have a formal pre- and post-evaluation plan for the implementation.
  • Collaborate with the state’s behavioral health authority and provider networks’ clinical leadership to develop a clinically informed theory about how to accomplish change and confirm which evidence-based services will support desired changes.
  • Conduct internal Medicaid agency reviews of readiness across all program phases (e.g., planning, design, pre-implementation, go-live, monitoring), particularly related to requests for proposals development, outcomes measures identification, managed care organization contracting, rule promulgation and handbook development.

These findings build on and reinforce a growing body of behavioral health providers’ experiences and will be an important tool for future managed care contracting and advocacy efforts.

For additional recommendations, read Dr. Joe Parks’ commentary. Questions? Contact Shannon Mace