The Provision of Mental Health Services in Managed Care Organizations

Executive Summary

This study reports on a nationally representative survey of managed care organizations (MCOs) regarding how mental health services were provided in 1999, and how the provision varies by product type and contracting arrangement.

"Product type" refers to how the MCO organizes or packages the health services it sells. This paper refers to three types of products:

health maintenance organizations (HMOs)
point-of-service (POS) plans
preferred provider organizations (PPOs)

"Contracting arrangement" refers to whether mental health services are delivered internally by the MCO (through salaried providers or a network managed by the MCO) or delegated to another organization through contractual arrangements. A specialty contract indicates that mental health services are contracted to a vendor such as a managed behavioral health care organization (MBHO) that specializes in the delivery and management of behavioral health services. A comprehensive contract includes both mental health services and general medical services from a single vendor or network. Key findings are reported below.

Products and Contracting

HMOs are most likely to report using specialty contracts with MBHOs.
Products with specialty contracts are more likely than those with comprehensive contracts to delegate functions such as formation of provider networks, claims processing, utilization management, and operation of quality improvement programs.
About half of products with specialty contracts place the MBHO at some risk if claims costs exceed targeted amounts.
HMOs are more likely than PPOs to include performance standards in their contracts with MBHOs.
PPOs are the only product type that makes extensive use of comprehensive contracts.

Benefits

A majority of products have annual limits on outpatient mental health visits (most often 20 or 30 visits) and on inpatient days (most often 30 days). Outpatient visits are subject to substantial cost sharing.
Cost sharing for outpatient visits is notably higher for mental health than for general medical care.

Screening and Treatment in Primary Care

Fewer than 10 percent of products require screening in primary care settings for mental health disorders using standard screening instruments.
About half of products distribute practice guidelines for selected mental health disorders to primary care providers.

Entry Into Treatment

The vast majority of products feature either direct self-referral or phone center referral for specialty mental health care.
Even among HMOs, few require approval of primary care gatekeepers to access specialty mental health care.
Prior authorization generally is required for inpatient care. HMOs and specialty contract products are much more likely to require preauthorization for outpatient care.

Treatment Process

Most products have standards for how long one must wait for a first appointment.
HMO and specialty contract products are more likely to have specialized programs for patients with co-occurring mental health and substance abuse disorders.
Products with specialty contracts usually delegate initial utilization review to the MBHO.

Quality Management

About three-quarters of products conduct patient satisfaction surveys, track performance indicators, and have practice guidelines regarding behavioral health.
Half of all products conduct clinical outcomes assessment.
These activities are more common among HMO and specialty contract products.

This study shows that MCOs provide mental health services in diverse ways. Elements of this diversity include whether to contract out mental health services to a specialty vendor, which utilization review responsibilities to delegate, whether to require primary care providers to screen patients for mental health problems, and which quality-of-care activities to conduct. Understanding issues related to access, cost, and quality of mental health treatment services requires knowledge about the service variation that is related to product type and contractual arrangements.

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