What To Look For
What To Ask
What Is Managed Care?
What is now called "managed care" began in the 1940s with health
maintenance organizations (HMOs). Families getting medical care at HMOs
were urged to get yearly checkups and to seek preventive care and early
treatment in case of illness. This proved to be cost effective.
As health care costs rose, employers, for their employees, began to sign
contracts with companies offering to "manage" health care.
The managed care company organizes doctors into cost-conscious groups.
Since the 1980s, more and more employee benefit programs have contracted with
managed care companies. There are now hundreds of managed care
companies. Their rules differ. Contracts change from year to year.
In general, managed care pays for what is "adequate"
and "medically necessary," using the least costly alternative.
Keep in mind:
- Managed Care Means Controlling Health Care Costs.
- Managed Care Discourages Unnecessary Hospitalization.
- Managed Care Discourages the Overuse of Specialists.
- Managed Care Services Depend on the Contract.
States are now looking to the managed care industry to provide public
health care, including mental health and related services. In the past,
State and local governments allowed service providers to bill Medicaid
and Medicare directly, after the services were provided, on a "fee for
service" basis. With managed care, providers will be under contract with
the managed care company. The company may expect to authorize each piece
of service they consider "medically necessary."
Managing care is harder than managing dollars. For people with long-term
mental illness, managed care is a new way of delivering services that
has not been tried before. This overview, for consumers of managed
mental health care and their families describes:
What To Look For
What To Ask
Providers Have Organized Into Networks.
What Is an HMO?
A PPO?
Consumers* may be offered several health insurance plans, at different
prices. Managed care companies often use doctors and providers willing
to lower their fees and work within "practice guidelines." In
general, the greater the choice of providers and services, the more the
consumer must pay.
*Individuals who receive mental health services use various
terms to describe themselves, such as consumers, survivors, patients,
clients, or recipients. While respecting individual preference, this
document uses the term "consumer."
There are two major types of provider groups, or networks:
A health maintenance organization (HMO) is a prepaid health plan.
For a fixed fee per year, an HMO provides enrollees a range of medical
services, both inpatient and outpatient. Doctors, on salary or contract,
may work in a central facility or in a number of different places.
Generally, you must use the providers who work for the HMO.
A preferred provider organization (PPO) is a group of independent
providers in private offices offering services at a discount to the
managed care company. The plan distributes a list of participating
doctors. In both PPO and HMO plans with a "point-of-service"
option, you may pay more if you use a doctor outside this group.
What Services Are Provided?
What Services Are Excluded?
With managed care, each benefit package is determined by a contract
developed by an employer or your State. There is no standard. If you
have a choice of plans, review and select your plan carefully. Before
joining a plan, talk with contracted medical providers and enrollees
whose needs are similar to your own. Ask: Are the benefits described on
paper authorized for people with medical conditions like mine?
Review the benefit package to be sure that you are receiving all the
benefits you need. If you have a "pre-existing condition" (such as a
mental illness), be sure you are covered. If you need mental health care
or drug and alcohol treatment services, be sure that these services are
covered in the benefit package.
Mental health benefits may be limited. Maybe a contract allows up to 30
days of inpatient care and 20 outpatient sessions a year. There may be a
maximum sum of money available for your care in a year or over your
lifetime. Some benefit packages use words like "adequate mental health
care" or "care where medically necessary." Call and ask for more
details. Ask:
- Are the services I need covered by the plan benefit package?
- How long will it take to get hooked up with a therapist? Will I have a
choice?
- What does "medically necessary" mean?
- For hospital care, what is the maximum and average length of stay?
- For outpatient care, what is the maximum and average number of visits a
year?
- Will my plan pay for medications? Is there a limit on the number or
total cost of medications each year?
- At what point does my therapist have to ask approval for additional
sessions?
- What other services (e.g., housing assistance) are available within the
plan? Is there a limit on these services?
- How do I appeal decisions and file a grievance if I am not satisfied
with the services being provided?
Often, therapists may be social workers, psychologists, or nurses,
supervised by doctors. Benefit packages may be geared to emergency and
acute care, providing for hospitalization and outpatient services. In
response to a crisis, enrollees may be allowed limited care, such as 4
days in the hospital or 8 outpatient sessions. Sessions to monitor
medications may be as short as 15 minutes.
Many plans ask enrollees to pay a fixed sum of money toward each bill.
This fee, called a "co-payment" or "co-pay," may be $5
or $10 per visit or prescription. The co-pay may be higher for mental health
care than for other services. There may also be "deductibles" where
you have to pay a set amount for services before the plan begins to cover
these expenses. Ask about these costs.
When benefits are used up, people go without care or pay the total cost
out-of-pocket. Sometimes, extensions of benefits are possible. Ask what
can be done to continue services.
What Are the Benefits and Drawbacks of Managed Care, Especially
for Public Mental Health Services?
Managed care controls medical costs mostly by limiting hospitalization,
applying "standards of care" for most conditions, and contracting
with exclusive providers. Managed care companies seek to provide less
expensive, less restrictive care.
Possible Benefits:
- Improved facilities. Consumers of public mental health services may
have access to more attractive facilities and better trained medical
providers, located closer to home.
- Expanded choices. There may be additional alternative service options
in the community. This includes treatment services (day treatment,
residential services, intensive outpatient care, home therapy, telephone
counseling) and support services (self-help centers, psycho-social
programs).
- Money saved can be used to expand outpatient benefits, reduce member
costs, or help make health insurance affordable to more people.
Possible Drawbacks:
- If hospitalization is denied without offering alternatives for
intensive care, a person's symptoms may get worse.
- People with long-term mental illness may need more than short-term
acute care preferred by managed care.
- Continuity of care may be difficult when people get short-term
treatments at different locations. Protecting confidentiality also might
be troublesome.
- Companies managing the mental health care may change, potentially
disrupting services.
What Is the Role of the "Primary Care Physician"?
How Does One Choose This Person, or Specialists?
In most HMOs and some PPOs one medical provider is responsible for
monitoring an individual's overall health care needs. Because this
person must approve or refuse your use of services, he/she is often
called the "gatekeeper." Some plans do not allow you to refer
yourself for mental health services.
The gatekeeper may recommend a specialist in the group. The plan may
provide a list. It probably will have a phone number to call for
referrals. In choosing a gatekeeper or specialist, consider:
- Is the person knowledgeable in dealing with your major complaints? Can
he/she prescribe medications?
- Where is he or she located? Can you get there?
- Do you have a personal preference, such as working with a man or woman
or with someone from a special ethnic group?
At the first visit consider: Can you talk with this person? Will he/she
answer your questions? If you do not feel comfortable with the
recommended provider, choose another person. Ask for another referral.
Visit someone else within the plan.
At HMOs where medical providers may share a building, you may have just
one medical chart including all laboratory reports. This helps your
primary care physician know what the specialists are doing and what
medications have been prescribed.
For mental health care, records should be kept separately and shared
with other doctors only if you sign a consent form.
What Is the Role of the Case Manager?
The title "case manager" or "care manager" is used to
mean different things in different places. If a person goes by such a title,
ask him or her what they see as their role and what they do.
The case manager working for a public or nonprofit human service agency
may be your advocate. Acting as a broker, this person may try to get you
more services. This person also may act as your therapist.
At the managed care company, the case manager's job is to ensure quality
care and to control costs by authorizing only what is considered
necessary and part of the covered benefits. The case manager is often a
person at the end of a phone, working with providers regarding what the
managed care plan will pay for. In most plans they must approve, in
advance, each day of hospital care and each session of outpatient care.
The managed care reviewer or case manager may:
- Authorize the requested treatment;
- Refuse a request to start treatment;
- Suggest a lower-cost alternative; or
- Deny further treatment such as more hospital days or more outpatient
sessions.
The managed care case manager is likely to be a social worker or nurse.
Consumers may have little contact with their case manager. It is usually
the medical provider who tells the case manager about a consumer's
situation.
What Is the Role of Membership Services?
With managed care, every employer, group, or State has a different
contract. Contracts may change from year to year. Enrollees need
someone to call with questions.
Managed care companies have a well-publicized toll-free phone number
called membership services or customer services. The larger plans can be
phoned 24 hours a day, 7 days a week. This unit may pre-authorize an
evaluation and refer you to a suitable medical provider in the group.
Membership or customer services:
- Can explain benefits. For mental health care, your plan may include
limited numbers of hospital days and outpatient therapy sessions a year.
- Can tell you what benefits you have already used. For example, if you
have used 8 outpatient sessions, 12 sessions might remain.
- Can negotiate. You can ask: Is there flexibility? Can I substitute an
alternative service for inpatient days?
- Collects complaints about providers. Based on complaints, the plan may
make changes in the services being provided, improve quality, or stop
using a therapist or hospital.
What Are Your Rights Within Managed Care?
Managed care is a business. Guidelines on how managed care systems
should operate are included in any contract your State or employer signs
with a managed care company. States may also set regulations for this
purpose. In addition, existing State and Federal laws protecting your
rights should be honored in managed care systems.
Managed care is a new system of delivering health care services and you
may find changes in certain rights you had before. Most health care
plans have a statement of patient rights. Ask for a copy of this
statement and read it carefully. Many plans also use results from
consumer satisfaction questionnaires to get their contracts renewed. In
general:
- You have the right to be treated with dignity.
- You have the right to clear information about benefits.
- You have the right to a clear explanation of your condition and
treatment.
- You have the right to updated lists of doctors in the network, and the
right to change doctors or therapists.
With managed mental health care, treatment is authorized by a case
manager using "treatment standards or guidelines"; this often means
that nurses and social workers are making treatment decisions by telephone.
Your questions about your proposed care will educate them. With any
plan, ask:
- How do I access service? Must I be referred by a medical provider in
the group, or may I call directly and request mental health services? Is
there a phone number to call? Is it available 24 hours a day, every day?
- Do I have the right to participate in decisions involving my treatment?
The right to talk to reviewers? The right to file a grievance? Whom do I
call? Where can I write?
- Do I have the right to refuse a recommended treatment?
- Will I receive ongoing therapy or just supervision of prescribed
medications? Must I take prescribed medications to get therapy?
What Are Grievance Procedures in Managed Care?
When asked to authorize care, the managed care company worker or case
manager follows a set of guidelines.
The company should have published procedures describing an appeal or
grievance process and should give this to you when you enroll. Consider
asking for this in advance, when "shopping" for and comparing plans.
For mental health care, some contracts say that medical providers, not
consumers, may appeal in a dispute. The appeal process is often two
layers, based on phone calls and a review of your medical records. Your
therapist asks for a review by a physician, and then perhaps another
review by a second physician, both usually employed by the managed care
company.
In a dispute, consumers may ask to speak to the managed care reviewer or
supervisor. The reviewer may ask to speak with the consumer. Such direct
contact, however, is rare. It may be difficult to have direct contact
with the reviewer and you may be given a phone number or address to
express your concerns. Take advantage of any opportunity to speak with a
reviewer of your care. The most consumer-sensitive contracts may
establish a committee, including consumers and medical providers, to
examine areas of dispute and to advise the managed care company.
If My State Medicaid Program Moves to Managed Care, Will I See a Big
Change?
States wish to control their health care costs. In many cases, to start
managed care for Medicaid services, the State must first get permission,
a "waiver," from the Federal Health Care Financing Administration
(CMS). Before hiring a managed care company for Medicaid services, the State
puts out a request for proposals. Generally several managed care
organizations submit bids. The State selects one or more of these
bidders and signs a contract with one or more managed care companies.
For States, this contract is a critical document, a new tool in health
care delivery. Consumer advocates will need to play as big a role as
possible at the State level before a contract is signed or renewed. To
find out what is going on in your State with managed mental health care,
or to get involved, call your State department of mental health or the
Medicaid office. Or call your State consumer or family organization or
mental health association.
If public mental health services are provided through managed care,
there may be a big change for the consumer. This depends, mostly, on the
amount of money budgeted for services but also on safeguards built into
the State's contract. Here are some questions to ask concerning your
State's plans:
For the more medicalized mental health services such as inpatient,
outpatient and partial hospital care—
- Is this a "capitated" system, with a fixed payment per person
covered? How much money does the State pay per person? Is this close to
previous budgets?
- Will the same medical providers be included in the new network?
Yesterday's publicly funded therapists may have the most experience
caring for people with long-term mental illness.
- Are yearly mental health benefits for an individual limited? Will there
be a cost or co-payment for treatments or medications?
For other supports and services such as intensive case management,
supported housing and employment, psychosocial rehabilitation, social
centers, home care, respite care, or consumer-run services—
- Will these be provided through the managed care system?
- Will the State and counties continue to fund and run these nonmedical
services as a community support system?
- Will grievance procedures include a way for consumers or families to
directly appeal a denial of care?
- Who will be evaluating the service system after the contract is
signed? Is there an external review committee and some way to advise the
company to change policies or procedures?
For mental health, managed care is a new way of delivering services that
has not been tried before. Payers are watching the costs and want good
results. But consumers are most concerned about services that promote
recovery. As States move toward signing contracts with managed care
companies, it is important for consumers to evaluate the benefits and
make their voices heard. An informed consumer is the best advocate. Ask
questions! Stay involved! Speak up!
FOR MORE INFORMATION
Center for Mental Health Services
SAMHSA's National Mental Health Information Center
P.O. Box 42557
Washington, DC 20015
(800) 789-2647 (voice)
(866) 889-2647 (TDD)
Consumer Managed Care Network
c/o National Association of State Mental Health Program Directors
66 Canal Center Plaza, Suite 302
Alexander, VA 22314
(703) 739-9333
National Empowerment Center*
20 Ballard Road
Lawrence, MA 01843
(800) POWER 2 U
National Mental Health Consumers'
Self-Help Clearinghouse*
1211 Chestnut Street, Suite 1000
Philadelphia, PA 19107
(800) 553-4KEY
*CMHS-funded clearinghouses.
FURTHER READING
HMOs and Managed Care: A Sensible Approach to Health Care,
available from the Group Health Association of America (GHAA), Write GHAA
Communications, 1129 20th St. N.W.., Suite 600, Washington, DC
20036-3403.
Mental Illness and Managed Care: A Primer for Families and Consumers,
available from The National Alliance on Mental Illness (NAMI). Call
1-800-950-6264 or write NAMI Publications, 200 N. Glebe Road, Suite
1015, Arlington, VA 22203-3754.
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Substance Abuse and Mental Health Services Administration
Center for Mental Health Services
1996
The Center for Mental Health Services (CMHS) wishes to thank Carol
Schreter, Ph.D., and the many consumers who were involved in the
development of this brochure. This document is in the public domain and
may be reproduced or copied without permission from CMHS. However,
citation of the source is appreciated.
MC95-59
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