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Comprehensive Mental Health Insurance Benefits:
Case Studies

U.S. Department of Health and Human Services
Substance Abuse and Mental Health Services Administration
Center for Mental Health Services
Office of Managed Care

IX. Appendix D: Managed Care Organization Case Studies

A. American Psych Systems

Company History/Profile

American Psych System (APS), started in 1992, is a relatively young company among those specializing in the delivery of managed behavioral health services. The eighth largest managed MBHO in the country, APS provides managed behavioral health and EAPs to about 5.2 million covered lives in 24 markets.

In 1995, APS purchased CHS, a small New York MCO. In September 1998, APS purchased Principal Behavioral Health Care. By adding Principal's 2 million lives, APS achieved the critical mass necessary to turn a profit (Managed care, 1998). Generating approximately $40 million in revenue in 1998, the company attributes much of its success to its investment in building partnerships with providers and developing technology that allows the company to focus on quality of patient care.

APS's primary customers include private and public sector HMOs, PPOs, indemnity plans, State and local governments, corporate employers, and unions. The largest portion of APS's business is generated from its HMO clients, which include Principal Mutual Life, Coventry Health Care, Mastercare, and Kaiser Permanente. APS's staff of about 200 employees provides the following products:

APS has created a niche in the marketplace by appealing to small and mid-size HMOs that are less interested in contracting with one of the largest conglomerates in the industry, such as Magellan. The company's motto, "Big enough to deliver, small enough to care," reinforces this market strategy. The typical HMOs that contract with APS share the following characteristics:

• are regionally based,
• award contracts to MBHOs in the $5-$10 million range,
• serve about 50,000 to 250,000 members, and
• demonstrate an interest in differentiating (in some cases through the mental health services they provide) their company from the major HMO players.

APS has established a 95 percent client retention rate and is seeking to tap into a significant share of the small to mid-size HMO market, which includes about 400 HMOs. APS reports that the majority of larger HMOs are less attainable clients, primarily because many have already established their own behavioral health carve-outs.

Behavioral Health Benefits

Employers, HMOs, and public sector agencies are contracting with MBHOs for a range of services and programs, including EAPs, behavioral health benefit packages, administrative services only (ASO) contracts, and a combination of these services.

Employee Assistance Programs

APS markets its EAPs as an opportunity for clients to reduce unnecessary health care costs, while providing workers with greater access to short-term behavioral health benefits requiring no copayments, deductibles, or restrictions. APS notes that EAPs are particularly useful to companies employing a high number of "blue collar" workers because they often earn low wages and may not seek behavioral health services because of high copayments and deductibles in many standard benefit plans.

APS offers a number of EAP models including telephone, in-person, combined telephone/in-person, and integrated EAP/managed behavioral health programs. EAP components include

• 24-hour access to master's-level staff counselors,
• problem assessment and assistance,
• on-site crisis response,
• program promotion,
• referral to community resources,
• connection to health benefits,
• training and education,
• legal assistance, and
• financial consultation.

Employees may seek assistance on their own or on the recommendation of their supervisors or coworkers. Individuals call case managers on the toll-free EAP line, receive a risk assessment based on a screening checklist, and then receive a referral to an appropriate provider based on physician specialty and geographic location.

Employees, as well as their spouses and dependents, use the EAP for a number of reasons including family or relationship problems, parenting difficulties, work-related problems, substance abuse, emotional or physical abuse, and grief and loss. Employees typically receive up to eight free visits; beyond that they are required to access benefits from their standard physical and behavioral health package.

APS's EAP employee utilization patterns indicate that 40 to 50 percent of all employees who initiate a call to the toll-free EAP line make an appointment for an initial evaluation or outpatient visit. Many employees either receive help from the EAP or lose interest in pursuing counseling before completing the first five sessions. Those who complete five sessions, however, are likely to reach the eight-visit maximum. The company also reports that 50 to 75 percent of employees seeking help with their behavioral health problems from the EAP do not require a referral to services offered under a company's behavioral health benefit package.

According to APS, when evaluating the success of an EAP, employers and HMOs consider a number of factors:

• whether utilization rates of the program are high (indicating employees are receiving better access),
• selection of providers in the network (some HMOs or employers require the MBHO to contract with specific providers),
• frequency and number of complaints they receive directly from employees,
• range and level of services offered, and
• number of positive health outcomes resulting from EAP utilization versus those that require referrals to other behavioral health benefits.

Behavioral Health Programs

The fastest growing business segment in the company, behavioral health programs (mostly private sector contracts) generate 93 percent of APS's revenue. APS employs an innovative structure using "core" and "anchor" provider groups who maintain a unique relationship with the organization (see below for detailed information). Its HMO clients require copayments from $5 to $25 per outpatient visit. APS reports benefit packages vary by HMO, but most include

• outpatient assessment and treatment (typically 20 to 30 visits),
• alternative care, such as partial hospitalization, intensive outpatient and day treatment programs,
• inpatient assessment and treatment (typically 20 stays),
• individual and group treatment,
• crisis intervention available 24 hours a day, 365 days a year,
• some integrated services with substance abuse, and
• treatment followup and aftercare.

For special needs populations, such as Medicare and Medicaid recipients, the company provides expanded services to address unique challenges faced by elderly and low-income populations. For example, APS's Medicare programs include in-home evaluations and treatment, hospital and nursing home consolidation services, and psychopharmacology, and Medicaid clients receive wraparound services.

APS's experience suggests that the most critical HMO concerns in contracting with an MBHO are whether the MBHO can ensure patient costs will not increase, keep the providers satisfied, and produce timely reports on pertinent patient utilization information. APS emphasizes that in examining the quality of a company's behavioral health benefits, it is important to look beyond the range or array of services and evaluate a number of criteria, such as accessibility to services, breadth and depth of network, and utilization management practices.

Administrative Services Only

APS can provide administrative services to MCOs, provider groups, and States. Currently, APS provides administrative services to five entities: PBHN Carolina-Charlotte ASO, Priority ASO, Mt. Sinai, Magna Care, and the State of Georgia.

The State of Georgia contracts with APS as an external quality review organization (EQRO) to conduct utilization management and review for approximately 1.2 million Medicaid eligibles. As the EQRO, APS is also responsible for provider training and quality improvement initiatives for Georgia's Clinic Option Providers systems, which furnish Medicaid mental health, mental retardation, and substance abuse services.

APS's administrative products include

• comprehensive clinical intake, including risk assessment and member benefit/eligibility review,
• utilization and quality management,
• claims processing and payment,
• management information and systems reporting,
• 24-hours-a-day, 7-days-a-week crisis assessment and intake,
• ongoing clinical review and treatment,
• discharge and aftercare planning,
• PCP integration and coordination of care,
• comprehensive continuum of care including in-home evaluation and treatment, hospital and nursing home consultation services, geriatric specialists, developmentally specific groups, and psychopharmacology, and
• provider network rental (allows employees to have access to a ready-made network for a fee).

Key Program Components / Best Practices

Integration of physical and behavioral health

APS stresses the importance of increasing PCPs' awareness of behavioral problems that present with medical symptoms. APS works with its specialists to ensure they are communicating with primary care doctors at least when a patient is on medication, is being released after an inpatient stay for mental health or substance abuse, is diagnosed with a substance abuse problem that affects physical health, or is a potential danger to him- or herself or others.

In addition, APS emphasizes the importance of coordinating all members of the treatment team, including care managers, physicians, therapists, and facilities through its policies that direct the activities of each group in sharing treatment information about members. For example, APS asks every member to sign a release of information (ROI) form so that APS network providers can immediately communicate with the PCP and receive a copy of the patient's most recent physical and laboratory data. The company also requires network facilities to request an ROI at admission so that the PCP can be notified of the admission and receive a copy of the treatment summary upon discharge. With prior consent, case managers also contact the patient's PCP when medical conditions present which may be complicated by medication or other treatment from a behavioral health provider.

APS pays particular attention to medication management issues. Behavioral health network providers are required to furnish the following information to members' PCPs:

• a list of all medication and dosage changes prescribed by a psychiatrist,
• indications of possible drug interactions or side effects,
• any potential medical or physical conditions that need further assessment,
• inpatient hospitalization with or without physical comorbidity,
• evidence of undiagnosed substance use,
• a treatment plan with a diagnosis, as well as length and time of treatment, and
• the expected therapeutic outcome for the behavioral health intervention.

Priority on Fostering Provider Relationships

The company prides itself on allowing providers the freedom to make the majority of decisions with minimal intervention from APS. This mutually rewarding arrangement allows APS to shift more resources from the day-to-day burdens of operations to quality control and oversight. APS staff also believes this relationship with providers distinguishes the company from other MBHOs that are perceived by providers as micromanagers of physicians' clinical decision making.

APS has divided its provider network into three groups: core, anchor, and prime. The core providers are those who provide mental health outpatient services for the majority of members. This multidisciplinary group is a significant size and presence in the market, offers easy access to members, and in many cases has a proven clinical track record with APS. The providers are responsible for making treatment decisions and determining number of visits. APS's role is to monitor treatment retrospectively for quality and satisfaction, as well as to troubleshoot and facilitate paperwork. The anchor group functions similarly to the core group, but for inpatient services. The prime group encompasses the rest of the network.

APS has established a regional system (primarily focusing on the Midwest and Mid-Atlantic areas) through studying local markets and carefully selecting providers on behalf of its HMO clients. For example, if an HMO has developed a provider system supported by two local hospitals, APS will develop an infrastructure to support the client's existing system. The company has created a regional Provider Advisory Group, made up of a variety of primary and behavioral health care specialists, which is responsible for recommending quality providers in specific areas and is considered "the pulse of APS's local markets."

The majority of MBHOs contract with providers on a fee-for-service basis, but APS places some of its core group of mental health providers at full risk for services they provide. Some core group members receive reimbursement based on a single case-rate fee for all services associated with the care provided for a given diagnosis. The fee is the same regardless of how much or how little time and effort the provider spends. If a provider no longer wants to participate in the program under case-rate reimbursement, he or she simply gives APS 30 days' notice.

Most of the company's well-established New York core provider groups have been receiving case rates since 1996. One of APS's goals in the next 2 years is to reimburse at least 50 percent of all outpatient providers (core groups) on a case-rate basis. Case-rate payment for chemical dependency services is also being contemplated.

APS considers itself an industry leader in developing technologies to make providers' lives "less challenging under managed care." APS reports that a key advantage of being a new player in the MBHO market is that from its inception the company had the opportunity to invest in sophisticated information systems. The company has designed and instituted a number of processes to help decrease provider time spent interfacing with the company. These initiatives include the following:

• MemLink and AuthLink: MemLink allows providers to check member eligibility for services 24 hours a day via telephone. Those seeking an initial authorization for routine care can transfer to AuthLink automatically for quick approvals, eliminating the need to complete paper forms.
• Claims scanning and auto-adjudication: APS's system can electronically convert handwritten claim forms into computer-ready information. The system receives information electronically from client customers through the Internet, or from tape, diskette, or telephone. Sixty-three percent of outpatient claims are auto-adjudicated.
• CheckWrite: This automated check writing service electronically facilitates the submission of check and explanation of payment (EOP) distribution to providers, improving accuracy and delivery time. As a result, providers receive payment within 3 to 5 days of claim approval. CheckWrite processes 92 percent of provider checks.
• Accessibility mapping: This in-house technology allows staff to generate maps that show the availability of a network in the neighborhoods where members live and work.
• APS Online: This bulletin board system provides for online, direct communication of claims, membership, and contract information by selected providers using a standard modem connection.

The company has also created a case rate review form that captures all pertinent data from the Health Care Financing Administration 1500 form (i.e., DSM-IV diagnosis codes, common procedural terminology billing codes, taxpayer identification number, and provider signature) and eliminates the need for providers to generate paper claims.

Program Satisfaction and Quality Monitoring

Based on customer satisfaction surveys, 98 percent of employees are satisfied with APS's EAPs. The company also reports that its EAP utilization rates exceed the national average of 5 percent. In terms of behavioral health benefits, member survey responses suggest that 85 percent of members are satisfied with the services they are receiving.

APS believes that investing in quality assurance mechanisms and systems is critical and spends about $2.5 million per year on such efforts. The company operates a centralized, automated information system that serves as a single warehouse to convert the data APS tracks into information that can be used to conduct historical comparisons, trend analysis, and ongoing quality improvement. For example, the company's information system generates a daily report that identifies all patients who were triaged with urgent or emergency needs. APS then contacts each primary care provider to ensure an appointment was made; if not, staff call the patient at home to encourage him or her to seek additional care. In addition, the company's case rate review form helps track three key quality-of-care standards, as follows:

APS case managers also partner with network providers to develop treatment plans by offering suggestions and providing quality management oversight. The case managers have access to APS's medical directors for consultation and authorization reviews. The company also has developed utilization management guidelines, which staff and providers use to identify treatment options and plans.

In managing utilization, APS reviews treatment for each case retrospectively, except in cases where a member's condition deteriorates. The company monitors signals that indicate problems, such as 1) if a case rate review form indicates a decrease in the GAF score, 2) if a member requires a higher level of care, or 3) if a prescription does not match the diagnosis.

Performance Data

The Managed Behavioral Health Association has developed the Performance Measures for Managed Behavioral Health Care Programs (PERMS) to help address the issue of performance standards. PERMS is designed to create standardized report cards for overall MBHO performance by defining performance indicators followed by effective and efficient organizations and by collecting data to develop benchmarks for these measures. APS adheres to PERMS standards and provides full HEDIS reporting capabilities for NCQA accredited clients. The company also conducts ongoing evaluations of key performance standards in areas such as access, satisfaction, and service.

APS provides companies and HMOs with quarterly reports related to member and provider complaints, claims- and authorization-based data, standards appeals, and provider network activities. Monthly reports include abbreviated summaries of telephone response rates, claim turnaround percentage, complaint and complaint turnaround time, and critical incidence reports.

Among the benchmarks set by the company are

• 85 percent member satisfaction with services rendered,
• 95 percent of all telephone calls answered within three rings,
• emergency appointments provided within 1 hour, urgent appointments within 24 hours, and routine appointments within 7 days,
• 98 percent of clean claims paid within 30 days, and
• 24-hour response to all complaints and concerns.

Key Lessons Learned/Challenges Remaining

Lessons Learned

• Develop an expertise in local consumer and provider markets,
• Foster relationships with providers because their decisions, as well as level of satisfaction, have system-wide implications for patient care,
• Invest in data and technology to produce evidence of the company's good patient care management practices on improving health outcomes,
• Understand that HMOs and employers place an extremely high value on cost-effectiveness of behavioral health programs, provider satisfaction, and timely delivery of data on utilization, costs, and patient outcomes.

Challenges Remaining

• Expanding market share (particularly in the public sector), as well as building the informational system and organizational structure to support growth,
• Demonstrating to employers and HMOs the value of integrating behavioral health benefits with EAPs to maximize the value of benefits and to optimize patient outcomes,
• Recruiting providers that meet APS's quality criteria, as well as increasing the proportion of providers under case-rate reimbursement, and
• Maximizing information system capabilities, such as producing reports demonstrating decreases in employee absenteeism as a result of APS's services.

B. Harvard Pilgrim Health Care

NOTE: This study examined mental health services provided by Harvard Pilgrim Health Care before the company's recent financial hardships. Although Harvard Pilgrim currently faces the prospect of State receivership or sale to another MCO, the HMO's innovative mental health care benefits and delivery strategies nonetheless prove instructive. This case study reflects information gathered in late 1998 and 1999.

Company History / Profile

NOTE: This profile is based heavily on Stelovich (1996).

Founded in 1969 as Harvard Community Health Plan, Harvard Pilgrim Health Care (HPHC) is New England's largest nonprofit MCO. U.S. News & World Report, Consumer Reports, Sachs, and Kiplinger's HMO Score Card have recognized it as one of the finest HMOs in the country. Newsweek named it the nation's top HMO in 1998.

Serving more than 1.25 million members in Massachusetts, Rhode Island, New Hampshire, Vermont, and Maine, HPHC has nearly 20,000 physicians, including over 4,000 behavioral health clinicians, and 140 hospitals in its network. These clinicians have practices in all types of professional settings, including staff model health centers, multispecialty medical groups, and independent practices. More than 8,000 employers offer HPHC to their employees. HPHC provides integrated physical and behavioral health benefits to many of its employer-purchasers.

Although it did not originally offer comprehensive mental health and substance abuse benefits, HPHC has a long history of progressive and integrated health care. In 1976, HPHC began to establish a comprehensive delivery system through its staff model HMO. Each of HPHC's centers recruited psychiatrists, psychologists, psychiatric nurses, and licensed social workers to work collaboratively. In addition, HPHC favored short-term group psychotherapy over longer-term individual treatment modalities. The company informally extended benefit limits when additional outpatient support could offset hospitalizations, enabling the patient to receive care in the least restrictive setting and saving HPHC money.

In 1976, Massachusetts also passed legislation requiring insurance companies to cover up to $500 or 20 visits annually for outpatient health services without regard to diagnosis (i.e., mental and physical health diagnoses were treated equally). This legislation specified the minimum amount of coverage and prohibited discrimination against certain chronic conditions. The State reinterpreted the 1976 law to favor wider exposure for managed care programs, effectively requiring unlimited inpatient care for acute psychiatric conditions.

Recognizing the limits of its staff model approach and facing increased cost pressures, HPHC expanded its size and structure and redesigned its mental health benefits. In a 1986 merger, HPHC joined with MultiGroup Health Plan and began providing services through capitated groups in its new Medical Groups Division. In 1987, HPHC initiated a Mental Health Redesign Project to determine how to expand a mental health benefit to include appropriate treatments for behavioral health problems while limiting financial risk.

The Redesign contained two components: 1) the Patient Assessment Tool, a protocol to simplify and standardize treatment, and 2) incentives to encourage wise use of psychotherapy. The new incentives realigned patients' expectations of treatment length with what was financially and clinically reasonable while accommodating the needs of more severely ill clients. The project also adjusted levels of cost-sharing based on medical condition. During the redesign, HPHC developed its intensive outpatient programs.

A 1995 merger with Pilgrim Health Care led to the newly named Harvard Pilgrim but had few direct effects on mental health benefits. HPHC took further steps to improve mental health delivery in 1998 as it reorganized 14 Boston-area staff model health centers as Harvard Vanguard Medical Associates, a clinician-led, multispecialty group practice with 600,000 members and 35,000 providers. Strong relationships between practice areas and a collegial atmosphere among physicians characterize the Harvard Vanguard environment. Fostering integration of care, mental and physical health clinicians share office space. All 14 Harvard Vanguard sites have a range of medical personnel, including emergency room staff, on-site. Harvard Vanguard staff are salaried with incentives connected to patient satisfaction and the financial performance of the entire practice instead of to utilization.

HPHC's delivery system covers three regions: Massachusetts, Southern New England, and Northern New England. In Massachusetts, HPHC operates as a network model of independent practice associations (IPAs) and Harvard Vanguard Medical Associates. The Southern New England Region offers a combination of a network and staff model. Here, HPHC hopes to manage complex cases more tightly in the staff model while leaving less-intensive cases in the network. Northern New England members use different provider networks.

Mental Health Benefits

Harvard Pilgrim offers four health care plan options: the HMO, POS, PPO, and First Seniority, a health care plan for Medicare beneficiaries. This case study will focus on the most common employer-purchased plans: the HMO and the PPO.

HPHC offers a full spectrum of services and programs based on medical necessity. Outpatient services include therapy (individual, group, couple, or family), screening for depression and substance abuse in primary care, and pharmacological management in behavioral health and primary care. The company has developed multiple mechanisms to provide specialized and intermediate care, such as diagnosis-specific group therapy, specialized counseling, continuing care groups for the chronically mentally ill, dialectical behavioral training therapy, self-help groups, neuropsychological testing, and adolescent after-school programs. In addition to acute inpatient hospitalization, HPHC offers members a variety of alternatives to hospitalization, including crisis intervention, observation beds, day treatment, outpatient detoxification, home visits, and an intensive treatment program. Limitations vary depending on the particular plan. All members can access services by contacting the Mental Health Access Center via a toll-free telephone number. In an emergency, members may seek an evaluation at an emergency facility without a referral.

The Mental Health Executive Committee (MHEC) oversees mental health benefit design in all HPHC regions. The MHEC has overarching responsibility for the development of corporate plans, policies, and practices regarding mental health issues. The committee works closely with clinical and administrative leadership in the primary care and medical/surgical specialties. The MHEC encourages a climate of continuous quality improvement in the clinical practices and seeks the most effective forms of assessment, treatment, and prevention so best practices can transfer across sites and regions.

HPHC also offers an extensive worksite wellness program at approximately 660 client company locations. HPHC's Center for Employer Health Programs works with employers to become familiar with the worksite, the employees, and the working environment.

Key Program Components / Best Practices

HPHC has implemented a variety of innovative programs to improve member service; these programs focus on screening and detection, inpatient and crisis services, research, and quality assurance.

Screening and detection (IPA-style medical groups):

In 1997, Harvard Pilgrim instituted the Early Detection of Depression Pilot study at one of its larger, IPA-style medical groups. This pilot aimed to develop assessment and treatment guidelines for PCPs to screen patients for depression. The study team developed a simple, easy-to-use screening form and offered training to providers. To overcome initial practitioner resistance to using HPHC's depression screening instrument on its enrollees, HPHC paid providers to screen all patients, not just HPHC members. HPHC recognizes that quality and consistency are more difficult to achieve in an IPA model, where providers serve patients from several plans, each with varying reporting requirements. The program has been successful in a variety of ways. First, HPHC detection rates have approached what the Agency for Health Care Policy and Research reports as the actual prevalence of depression. Further, most of these patients are willing to pursue treatment. Finally, physicians are complying with the study, even though they no longer receive bonuses for screening; they now believe in the need for this service.

Recognizing the difficulty in convincing network doctors to use new technology, HPHC management has met with the medical directors of other major health plans to coordinate services and develop standards for communication and reporting. The group hopes to standardize mental health detection and treatment procedures, thereby reducing the burden on individual doctors and increasing willingness to comply.

Inpatient and alternative services:

• Although HPHC does not enroll enough children to warrant owning a children's hospital, it has a sufficient base to influence practices and implement innovative programs at the two Boston area children's hospitals.
• HPHC created the nation's first HMO-owned and -operated psychiatric day hospital. It now includes a day and evening substance abuse program and aftercare groups for clients.
• In an effort to create a more comfortable and less expensive alternative to 24-hour hospital-based care, HPHC helped a vendor develop an adult psychiatric hospital in a residential setting. The estate-like environment provides intensive services to patients who do not require a locked facility, restraints, or complex medical support.
• At a local hospital that it does not own, HPHC built a crisis unit providing a small number of holding beds and intensive psychotherapy and drug therapy. HPHC encourages the hospital to use the unit by reimbursing services at the same rate as a day of inpatient care. The holding beds have a diversion rate of 50-60 percent. The unit reduces the length of stay for inpatient hospitalizations and reduces HPHC's exposure to higher inpatient costs.
• HPHC operates the First Seniority Team, a unit that travels to nursing homes to treat the elderly. Psychiatrists always travel with the team to diagnose and treat mental illness.
• Harvard Vanguard health centers include a Strike Team, a team of case managers that helps reduce inpatient admissions among its high-utilization patients. The case managers, bachelor's-level social workers, conduct outreach and help patients with compliance issues such as maintaining medication regimens and keeping appointments. The Strike Team works with the appropriate clinician to help with patient treatment. The program is popular among patients and has reduced the number of admissions among the high-utilization population.

Research:

• The Harvard Pilgrim Health Care Foundation funds unique teaching, research, and community service programs. Foundation-supported programs include the Department of Ambulatory Care and Prevention, a partnership of HPHC and the Harvard Medical School; research on prevention and other health practices; AIDS awareness and education for teens; and violence prevention.

Program Satisfaction and Quality Monitoring

HPHC monitors program satisfaction through the Consumer Assessment of Health Plans Survey (CAHPS) 2.0H instrument. This survey, required by the NCQA for plan accreditation, measures member satisfaction over a wide range of services to assess how well the health plan meets member expectations. Table 17 summarizes several key survey results.

In addition to examining consumer satisfaction, HPHC examines independent data to evaluate the quality of its providers. For behavioral health providers, HPHC uses four main approaches:

1.  System-wide examination of outcomes data. HPHC compares the suicide rate of its members to the overall rates in Massachusetts; the suicide rate in the Commonwealth is currently about twice the suicide rate of HPHC members. In the event of a suicide, a committee investigates the problems in each case's treatment and evaluates whether improvements can be made at the provider or system level. In addition, the committee tries to discern any relevant trends. The process is important to ensure quality; however, it has met with some resistance from network doctors.

2.  Program/provider-specific performance. HPHC's behavioral health program uses generic screens, such as the unexpected death of a patient, patient elopement, and medication errors, to monitor provider performance. HPHC regularly reviews inpatient records for sentinel events, which are recognized as indicators of potential quality-of-care problems. The organization requires each region to establish procedures for implementing screens on inpatient records and to review positive findings appropriately.

3.  Investigation of consumer complaints. HPHC carefully monitors member complaints about mental health clinicians. Many times, a complaint results in professional coaching for the involved provider by a colleague. The Credentialing Committee reviews the performance of any provider who receives more than three complaints in a single year. The Patient Care and Assessment Committee reviews more serious complaints.

4.  Medical audits. As part of the recredentialing process, HPHC asks all mental health providers to submit five medical records for peer review of appropriate case documentation. Clinicians review the records against Harvard Pilgrim's mental health record standards and notify the individual provider of the review results.

Performance Data

HPHC maintains a detailed tracking program to monitor its performance data. As described in its 1999 HEDIS Report, HPHC regularly tracks several key cost and utilization indicators of its mental health, substance abuse, and prescription drug services, including

• Followup after hospitalization for mental illness: For patients recently released from inpatient programs, outpatient visits with mental health practitioners can reduce recidivism and facilitate the transition to the home or work environments. HPHC tracks the percentage of hospitalized mental health patients who were continuously enrolled for 30 days after discharge and who received some form of outpatient treatment (ambulatory care or day/night treatment). Sixty-eight percent of these patients met these criteria and sought outpatient care within 7 days of discharge; 86 percent sought such treatment within 30 days of discharge.
• Antidepressant medication management: To address the success of pharmacological management of depression, HPHC monitors three performance indicators measuring the percentage of patients with new episodes of depression who were treated with antidepressant medication and who meet specified treatment criteria. Almost 30 percent received at least three outpatient visits during the 84-day acute treatment phase; this measure, called the Optimal Practitioner Contacts for Medication Management, assesses the level of clinical management of new adult patients. Sixty-five percent met the standards for the effective acute phase treatment by remaining on an antidepressant medication during this entire phase. The effective continuation phase treatment measure, which assesses the effectiveness of clinical management in ensuring compliance, found that almost 50 percent remained on an antidepressant medication for the 6-month continuation phase.
• Mental health, substance abuse, and pharmacy utilization: HPHC tracks, by age and sex, the frequency and level of behavioral health care its members receive. Over 9 percent of members access mental health services; most care is ambulatory, with less than 0.33 percent of members receiving inpatient or residential services. Only 0.53 percent of members access substance abuse services; over 85 percent of this care occurs in an outpatient setting. HPHC also monitors the cost and utilization of prescription drugs. An average member receives 8.61 prescriptions every year and spends $32.01 per month on all (physical and mental health) prescriptions.

Challenges Remaining

Since its inception, HPHC has significantly changed the way it approaches behavioral health treatment. However, it faces continual pressures to reduce costs as well as a challenging, competitive, and maturing marketplace. HPHC's reputation for quality remains, but in today's market many employers choose insurance carriers by cost. HPHC must convince employers of the value of quality services and of supporting health plans that can provide comprehensive services for employees. Specifically, HPHC must confront three main challenges:

• Market pressure: The increasing pressure to contain costs may jeopardize HPHC's ability to provide appropriate and accessible behavioral health services. This challenge is most apparent with Harvard Vanguard, whose reputation is based on offering innovative and integrated services. However, the trend in managed care appears to be shifting away from staff model HMOs, which offer only limited geographic access and carry higher per- member monthly rates. Nonetheless, Harvard Vanguard has been at the forefront of many of HPHC's innovations and provides a strong model to ensure the availability of comprehensive integrated behavioral health services. For HPHC, participating and receiving research grants has ensured continued progress. Administration and staff believe the continued supply of Federal and foundation demonstration dollars is an absolute necessity to improve practice and to test new ideas.
• Managed care market consolidation: Extensive mergers and acquisitions have changed the business environment from a marketplace of regional or local companies to one dominated by national and multinational corporations. These larger companies want to reduce the number and variety of health plans they contract with, making national insurers an attractive option. Regional HMOs like HPHC face competitive disadvantages. After going national, at least one of HPHC's customers sought a national vendor.
• Review of contracting approach: In the long run, HPHC must look to more lucrative business practices that complement its philosophy and strengths. Its worksite wellness programs may be one avenue that allows HPHC to continue providing comprehensive benefits. The carve-out business may be another route to financial stability, but this option does require some compromise of HPHC's traditional methods of integrated service delivery. HPHC must address the trend in the market to unbundle services and contract them out on a carve-out basis. HPHC does not currently work as a carve-out for other HMOs but is considering the possibility. HPHC recently contracted with a marketing consultant to develop a feasibility plan.

C. HealthPartners

Company History / Profile

HealthPartners (HP) is a nonprofit, consumer-governed HMO and insurer based in Minneapolis, Minnesota. The organization consists of health care organizations, plans, and a hospital system that provides health care services, insurance, and HMO coverage to 800,000 members. HP offers its products to individuals and employers and supports the coverage options for 29 of Minnesota's largest employers. Dedicated to serving its members, HealthPartners is virtually a member-run organization, as 80 percent of its board of directors are consumers elected by the members.

HP, in its current configuration, is the product of a series of mergers and affiliations, the largest of which was the 1992 merger of Group Health, a Minneapolis-based staff model HMO established in 1957, and MedCenters Health Plan, a network model HMO founded in 1972. In 1993, an affiliation with Regions Hospital and Ramsey Clinic System broadened the company's network of clinics and hospitals by adding a major teaching hospital and nearly 50 medical and dental centers throughout the Twin Cities and western Wisconsin. These facilities provide a full range of services, including behavioral health care.

In 1996, the plan's staff model, clinic, and hospital physicians (550 physicians and 23 clinics) combined to form the HealthPartners Medical Group. The Medical Group consists of four divisions: primary care, medical subspecialties, surgical subspecialties, and behavioral medicine. HP currently operates both the staff model Medical Group and the network model MedCenters Health Plan. HP's network includes 45 medical groups at more than 220 sites across Minnesota.

A large degree of horizontal and vertical integration of health care organizations and a strong regulatory environment characterize HP's Twin Cities market. The area is also home to one of the most active and well-known employer purchasing coalitions, the Buyers' Health Care Action Group, which purchases health care services on behalf of more than 15 percent of the metropolitan area's covered lives. It thus enjoys enormous leverage over all aspects of the health care arena in the Twin Cities. HealthPartners and its component entities have experienced the types of market pressures that other HMOs, health systems, and providers across the country are now facing.

Mental Health Benefits

Group Health, one of HP's predecessors, has a longstanding commitment to integrating physical and behavioral health services; over the past 15 years, it has worked to improve early identification and treatment of mental health conditions in the primary care setting. While the recent merger and affiliation activity has made it more difficult to provide the same approach to and level of integration across the entire provider network, HP is committed to its approach and is working to further its adoption.

HP offers standard plans to individuals and small employers plus a menu of services with other options for larger companies. State law in Minnesota requires that fully insured HMO products impose no limitations on mental health inpatient days. Outpatient limits and cost-sharing requirements for mental and physical health care vary by plan. HP's entire system offers direct access for behavioral health care; it requires no referrals.

Roughly one-third of HP's membership (about 240,000 individuals) enrolls with the Medical Group and two-thirds with the MedCenters Health Plan. This study will focus on the staff model Medical Group, the area in which HP has implemented the widest variety of innovative behavioral health programs and services. In the Medical Group, HP has been able to test its approaches across a broad spectrum of conditions and providers. Moreover, the staff model and clinic-focused delivery system allow for greater innovation at the service delivery level by co-locating PCPs, specialists, and mental health practitioners. These providers work collaboratively in the primary care settings as the "front end" of the mental health delivery system.

Key Program Components / Best Practices

Health Promotion and Risk Reduction

The Partners for Better Health program, a series of unique, highly proactive, company-wide initiatives designed to reduce the incidence of disease and health risks, sets specific, measurable goals for health improvement. The program includes a number of member services and programs:

• The Partners for Better Health Phone Line allows members to talk directly with a health educator or dietitian to develop personalized health improvement action plans. Members can also complete the Partners for Better Health Survey, a confidential health risk assessment, over the telephone. Members receive confidential feedback with recommendations for individual lifestyle and health improvements. With permission, HP also sends the risk data results to members' health care providers.
• The Partners for Better Health Employer Initiative (PBHEI), launched in 1995, is a program specifically designed to improve the health of employees and dependents who carry HP health insurance. PBHEI demonstrates an approach that is integrated, focused, population-based, synergistic, systematic, and goal-driven, with interventions that help people actively change their lifestyles and are effective in preventing relapses.

PBHEI identified the most prevalent preventable conditions among members and dependents for the companies it serves. Mental health problems ranked among the top five preventable conditions. In addition, the study found depression to be one of the top five reasons patients make visits to their primary care clinic.

As seen in Figure 1, enrollment in PBHEI grew rapidly during 1997 and 1998.

• HealthPartners EAP is a free, confidential, 24-hour resource integrated into HP's contracts with employers. The program helps employees resolve personal and relationship issues, as well as substance abuse, legal, and financial problems in an attempt to reduce stress and increase productivity.
• HP operates a Center for Health Promotion, which serves as a testing ground for initiatives before they are fully implemented. The center documents feedback on the initiatives provided by patients who call HP's help lines, enters it into their medical charts, and tracks it through an information system.
• HP investigates systematizing primary care for depression through an evaluation project, called the Diamond Project, which aims to demonstrate that primary care clinics can develop systems to more consistently manage and follow up with depressed patients and to describe and evaluate the change process used to do this, the new care process, and its effects. The project has found that low-end management (such as 5-minute telephone calls with patients) can have as much of an impact as medication on patients with depression.

Integration

Whereas many health plans consider a good referral network to be an integration of mental health services and primary care, HP takes integration a step further-patients can see psychiatrists and PCPs simultaneously in a primary care setting. HP's sophisticated case management system coordinates these services.

Since 1991, HP's Medical Group has focused on integration of physical and mental health services. This priority and philosophy have transformed HP's practice. HP has developed guiding principles for the role of mental health in specialty care. It hopes to rejuvenate family practices by integrating psychiatric and primary care in particularly difficult cases and eventually delivering 70 percent of mental health services in primary care settings. Currently, only 25 percent of mental health services occur in a primary care setting.

Figure 2: The Biopsychosocial Care Continuum: A four-sector model

According to HP's Primary Care 1996 Annual Plan, the principles of primary care are

  1) comprehensiveness: "provision or coordination of all healthcare needs in a biopsychosocial model,"

  2) advocacy: "physician or team helps patients and families find their way within the care system," and

  3) population and individual patient focus: "providing care for an appropriately sized panel of patients."

Leaders at HP have conceived a continuum of biopsychosocial care depicting the range of clinical problems. They posit that the majority of cases require a blend of biomedical and psychosocial treatment.

HP's integrated care and preventive services have produced numerous benefits. From a physician's perspective, integration has reduced family practice "burn-out." Many PCPs have several very difficult patients who do not respect the mores and boundaries of the physician's practice, which can lead doctors to become frustrated with their practice.

For example, HP staff recounted a story in which a family practitioner was treating a woman who complained of persistent migraine headaches and repeatedly demanded methadone treatment. She was a difficult patient with a number of physical and behavioral health problems and monopolized the physician's time. By calling in a psychiatrist colleague, the physician was able to diffuse the situation. Collaboratively the doctors created a treatment plan to address all of her needs. HP believes this model, in which psychiatrists are available to treat difficult or mentally ill patients, can help both the patient and the family physician. HP's case management system facilitates communication between primary care and mental health professionals.

Because of its geographic expansion into more rural areas that lack mental health practitioners, HP has taken an increasingly important role in supporting PCPs who must provide much of the mental health care services in a region. These physicians are particularly likely to burn out, given the demands on them as the only, or one of the few, health care providers in the area. In these situations, HP has had success in sending senior mental health professionals to work with these rural providers. The mental health specialists provide physicians with the clinical and collegial support necessary to treat patients appropriately and to set boundaries for themselves as sole health care providers.

Clients have enjoyed benefits in this integrated approach as well. HP has found the market enthusiastically in support of the PBHEI. Moreover, HP has found that some PBHEI companies have enjoyed reduced insurance rate increases over the course of 2 years. The EAP provides another outlet for behavioral health care integrated with the physical health program. Through the EAP, employers can gain a better understanding of the problems in their employee workforce. Employers are also particularly attracted to an advice line specifically for supervisors to call about employee issues.

Program Satisfaction and Quality Monitoring

HealthPartners monitors program satisfaction through a survey developed by the NCQA to be incorporated into the HEDIS. This instrument measures member satisfaction over a wide range of criteria including quality, cost, and accessibility of services. Table 18 summarizes the 1998 survey's key results.

Performance Data

In addition to satisfaction with its services, HealthPartners monitors utilization, cost, and a variety of other factors in order to improve the care it provides. In terms of mental health, HealthPartners regularly tracks hospital readmission for psychiatric patients. Studies have shown that, for hospitalized behavioral health patients, appropriate management of care immediately after release reduces readmission rates. As a result, HealthPartners attempts to provide comprehensive followup care and schedules the first outpatient visit before the patient leaves the hospital. Data from 1997 suggest that 69 percent of members¹⁰ hospitalized for treatment for various mental health disorders were continuously enrolled for 30 days after discharge and were seen either on an ambulatory basis or in day/night treatment with a mental health provider within 30 days of hospital discharge.

Challenges Remaining

Particularly with the move toward a greater reliance on contracted network providers, HealthPartners continues to develop new risk models and approaches to behavioral health care delivery. Several new approaches are being tested, such as

• including pharmacy risk (including mental health pharmaceuticals) in physical health capitation rates;
• allowing primary care clinics to select the behavioral health "partners" with whom they will share risk and whom they will use as their principal referral network;
• using stop-loss types of arrangements for certain types of high-cost, low-incidence cases (e.g., bipolar, obsessive-compulsive, eating disorders);
• developing behavioral health centers of excellence to which the entire provider network will refer appropriate types of cases; and
• limiting primary care risk-sharing for behavioral health (e.g., 20 percent of behavioral health risk within the primary care capitation rate).

HP is also testing new approaches to chronic care delivery. One recent initiative involves the use of telephone followup. HP nurses and care managers make a total of six telephone calls during the first 6 months following an episode--initially at 2-week intervals and phasing into one call every 2 months. HP staff are evaluating the success of this approach and believe that it contributes more to positive care outcomes than other, more traditional, chronic care (e.g., medications and other types of followup).

As with HPHC, the primary stressors for HP are carve-outs and large mergers producing nationwide companies. HP's dedication to integrated services is not attractive to a number of employers who feel it is beneficial and economically advantageous to use carve-outs for mental health and substance abuse treatment services. In addition, while HP has a large presence in Minnesota and neighboring States, companies with offices nationwide tend to prefer leveraging their purchasing power and simplifying health benefit administration through contracts with one or two vendors for all of their employees.

HP has had some success in attracting clients with its unique programs. In one case, a group of county employees left HP in favor of a large, national carve-out. Eventually, the group was dissatisfied with the kinds of services the new organization provided and returned to HP. HP's experience and this type of response by an employer may be somewhat unique to the Twin Cities. Minnesota's health care delivery model involves a long-standing reliance on primary care and multidisciplinary health care delivery (e.g., large multispecialty group practice clinics). Furthermore, the area's purchasers play an active role in shaping the health system; the active buyer coalition also brings with it additional infrastructure requirements to meet employers' demands for quality assurance, consumer protection, and outcomes data. Recognizing these regional characteristics and meeting such expectations are critical components to HP's approach and success as a regional player.

¹⁰ In 1997, the national average for this measure was 67 percent.

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