The Provision of Mental Health Services in Managed Care Organizations

Background and Study Methods

Despite the fact that most privately insured individuals in the United States receive their health care under managed care, little is known about how individuals receive mental health services under these arrangements. This study reports on a national survey of managed care organizations (MCOs) regarding mental health services - the first such survey conducted since 1989 (Interstudy, 1992). Tremendous growth and tumultuous change occurred during the 1990s. This report provides an in-depth update about mental health service provision under managed care. The goal of this report is to provide an understanding of MCOs' provision of mental health services for privately insured enrollees.

Background

The organization and financing of mental health services have changed dramatically in recent years. MCOs are now the predominant form of private health plan coverage in the United States, enrolling almost 90% of those with employment-based health insurance (Gabel et al., 2000). Simultaneously, the managed behavioral health care industry - managed behavioral health care organizations (MBHOs) specializing in mental health and substance abuse services - has experienced huge growth. Two-thirds of Americans with health insurance now are enrolled in some type of managed behavioral health care program, with enrollment increasing 86% since 1995 (Oss, Jardine, & Pesare, 2002).

The growth in the managed behavioral health industry has occurred because some employers, government purchasers, and health plans have looked to MBHOs as a way to control costs and/or to improve the quality of care. Employers and government purchasers can choose to separate ("carve out") mental health and substance abuse services from the rest of the medical care package and contract directly with MBHOs for behavioral health services (Figure II.1). Alternatively, they can follow the traditional approach and purchase behavioral health coverage along with general medical benefits from the MCO. The MCO can choose to manage and provide (make) behavioral health services within its own organization or to contract out (buy) these services from a specialty MBHO. This report is based on a survey of MCOs focusing on how the MCO provides behavioral health services - that is, the right-hand portion of Figure II.1. We do not report on direct employer or government purchaser contracts with MBHOs, which require different data sources such as employer surveys (including Buck et al., 1999; Horgan et al., 2000; Salkever & Shinogle, 2000) or studies of state Medicaid programs (including Callahan et al., 1995; McGuire, Hodgkin, & Shumway, 1995; Rosenbaum, Shin, & Smith, 1997).

The ways that MCOs structure and deliver mental health care, including decisions to contract out these services, can affect the experience of enrollees seeking and receiving treatment. Given the fact that most people with mental health problems do not receive care despite the availability of effective treatments, it is crucial to facilitate access to and continuation of necessary and appropriate services (Regier et al., 1993; DHHS, 1999). Gatekeeping requirements to access specialty mental health care, utilization review procedures, provider practice guidelines, and screening for mental health problems in primary care settings are all examples of delivery system features that can influence the care that people receive.

The growth of managed care in general, as well as managed behavioral health care in particular, has raised both hope and concern. Some observers note that MBHOs may improve the quality of behavioral health care through the development of comprehensive services, coordination of care, improved networks of care, and increased use of "best practices" (Jeffrey & Riley, 2000). Because they are specialized, MBHOs may have a greater level of expertise, which would make achievement of these goals more likely. Others are concerned that financial arrangements with MBHOs may lead to limited access or undertreatment, and that the administrative separation of behavioral health from general medical services may lead to fragmentation of care (Strosahl & Quirk, 1994; Sederer & Bennett, 1996).

A substantial body of research has been published on employer or government purchaser carve-outs (Grazier & Eselius, 1999; Sturm, 1999; Horgan et al., 2000). However, little recent information was available regarding MCOs' provision of behavioral health services in relation to contracting choice until the current study, which was designed to help address this gap in the literature (Garnick et al., 2001; Garnick et al., 2002; Hodgkin et al., 2002; Hodgkin et al., 2002; Merrick et al., 2002). For an overview of the full study, see Horgan et al. (2000).

The overarching purpose of this report is to present key findings about how MCOs provide mental health services and how this varies both by type of MCO and by whether the MCO carves out service provision to a specialty vendor. The study concentrates on MCOs' commercial products, since Medicare and Medicaid managed care has various special characteristics, discussed elsewhere (Buck, 2001; Hanson & Huskamp, 2001). The current study focuses particularly on aspects of MCOs' mental health care arrangements that can clearly affect enrollees' experience of accessing and receiving mental health services. MCOs face a myriad of decisions with respect to these issues. The outcomes of these decisions have the potential to support or hinder the use and quality of behavioral health services for large numbers of people. While the study is organizational in nature and therefore cannot provide information about utilization patterns or quality of care in MCOs, the results provide a comprehensive picture of how MCOs (and their vendors, when applicable) currently finance and organize their delivery systems for mental health services. The results will help to inform policymakers, consumers, advocacy organizations, and other stakeholders (including MCOs and MBHOs themselves) in the ongoing debate over the promises and pitfalls of managed mental health care in its various forms.

Methods

Data Sources and Sample

The primary data source for this report is Brandeis University's Survey on Alcohol, Drug Abuse, and Mental Health Services in Managed Care Organizations (hereafter referred to as the "Brandeis survey"). The Brandeis survey was funded by the National Institute on Drug Abuse (NIDA) and the National Institute on Alcohol Abuse and Alcoholism (NIAAA) for primary data collection and analysis, and was supplemented by the Substance Abuse and Mental Health Services Administration (SAMHSA) for additional data analysis and case studies on mental health services. This nationally representative survey collected information from 434 MCOs in 60 market areas regarding behavioral health services during 1999, achieving a 92% response rate. Each MCO was asked about its top three commercial managed care products. The Brandeis survey included an administrative module addressing contracting arrangements, benefits, and provider payment; and a clinical module addressing utilization management, treatment entry mechanisms, prescription drug formularies, quality improvement, and other clinically oriented topics. This report presents the Brandeis survey data on the provision of mental health services only; information regarding alcohol and drug service provision is reported elsewhere (Garnick et al., 2002; Hodgkin et al., 2003).

The Brandeis survey is linked methodologically to the Community Tracking Study (CTS), a longitudinal study of health system change funded by the Robert Wood Johnson Foundation and described more fully elsewhere (Kemper et al., 1996). The CTS sample design contained strata for large metropolitan, small metropolitan, and nonmetropolitan market areas. Within strata, nearly all sites were randomly selected, with probability proportional to size. The primary sampling units for the survey were the 60 market areas selected for the CTS to be nationally representative. The second sampling stage consisted of selecting MCOs within market areas. MCOs serving multiple markets were defined as separate MCOs for the survey, and data were collected with reference to the specific market area.

Within each market area, the sample frame of the Brandeis survey was based on the CTS follow-back survey, which used information from household survey respondents to question insurers and health plans regarding health plan characteristics. The follow-back survey yielded approximately 1,000 entities categorized as managed care plans across all sites. Based on information from Web searches and industry directories, the Brandeis survey excluded entities that were only indemnity plans as well as MCOs that were no longer present within market areas. This left 944 MCOs as the sample frame. The sampling allocation of MCOs within market area was stratified by two categories: preferred provider organization (PPO) only and health maintenance organization (HMO)/other (including HMO only and multiproduct).

Responses were sought from a sample of 720 market-specific MCOs, but 247 were categorized as ineligible because they had low enrollment (less than 300 subscribers) in the market area, did not offer comprehensive health care products, served only Medicaid and Medicare, or offered only indemnity products in the market area. This left 473 eligible MCOs, of which 434 (92%) responded. They reported on 787 eligible products for the administrative portion of the Brandeis survey. For the clinical module, 417 MCOs completed those items regarding 752 products. When an MCO had multiple products that were similar in terms of out-of-network coverage, referrals, and role of primary care physicians, they were collapsed into a single product for the purposes of the survey. Collapsed eligible products were categorized as HMO, PPO, or point-of-service (POS) products.

Data Collection

The telephone survey was conducted by Mathematica Policy Research on behalf of Brandeis University. Typically, two respondents (executive director and medical director, or their designees) were questioned at each MCO. For some national or regional MCOs, respondents were interviewed at the corporate headquarters level regarding multiple sites. In some cases, the MCO referred interviewers to the MBHO for more detailed information. All survey questions applied to individual products within each market area-specific MCO.

Scope of Survey Content

The Brandeis survey covered a wide range of administrative and clinical topics. The administrative module gathered data on the following:

• Plan characteristics, which included products offered, enrollment, ownership, and affiliation with a national chain.
• Contracting with vendors, which included contracting arrangements with both specialty behavioral health vendors and comprehensive networks (general medical and specialty providers alike), which vendors were used, functions included in the contract, and performance standards.
• Benefit design, which included mental health and alcohol and drug abuse benefits, in the most commonly purchased package for each product. This section included extent of covered services, lifetime and annual limits, consumer cost-sharing requirements, and prescription
  drug coverage.
• Personnel and provider selection, which included factors used in hiring or selecting providers.
• Payment methods and risk sharing, which included vendor payment mechanisms (administrative services only, capitation), level of financial risk, and practitioner payment methods.

The clinical module examined the following areas:

• Entry into specialty treatment, which included direct self-referral and phone center referral, as well as primary care or employee assistance program gatekeeping approaches.
• Utilization management techniques, which included the services requiring prior authorization, organizational responsibility for different levels of review, the appeals process, types of personnel used to conduct utilization management, and case management programs.
• Treatment process for behavioral health in primary care settings, which inquired about required screening and use of primary care-oriented practice guidelines. In the specialty treatment section, informants were asked about which types of clinicians provide treatment, standards for maximum wait time to first appointment, follow-up after discharge policies, specialty practice guidelines, and prescription drug formularies.
• Quality assurance/improvement, which included the use of patient satisfaction surveys, clinical outcomes assessment, and performance indicators.

A complete summary of the Brandeis survey content may be found in Appendix A.

Statistical Analysis

The results presented here are weighted for selection probability and nonresponse to be representative of MCOs' commercial managed care products in the continental United States. Statistical analyses were implemented using SUDAAN software (Shah, Barnwell, & Bieler, 1997) to allow correction of standard errors for our complex survey design. To test the significance of bivariate differences in means or distributions, t tests (for continuous variables) and chi-square tests (for categorical variables) were conducted. When conducting pairwise tests for product type and contracting arrangement differences, multiple comparisons were corrected for by using the Bonferroni correction; only corrected p values are reported. Most analyses were conducted at the product level.

Case Studies

Team members conducted six case studies in order to place findings from the Brandeis survey in context. We selected organizations that represented a range of contractual arrangements, organizational structures, product offerings, and geographic locations. Organizations were also chosen because of previous connections with senior personnel on their staff, ensuring cooperation and a willingness to express opinions candidly. Because of the small sample size, findings from these case studies cannot be generalized; but they do contain some important insights from significant players in managed care. The information that these experts shared was used both to illustrate specific points in this report and to add insight to the general discussion of findings.

Organization of the Report

The chapters that follow present major findings from the Brandeis University Survey on Alcohol, Drug Abuse, and Mental Health Services in Managed Care Organization. Chapter III examines MCOs' product offerings and behavioral health contracting arrangements. Chapter IV describes mental health benefits, including limits and cost-sharing features. Chapter V reports on MCOs' policies regarding mental health screening and treatment guidelines in primary care settings. Chapter VI focuses on entry into specialty treatment, including gatekeeping mechanisms and prior authorization. Chapter VII describes aspects of the treatment process, such as standards for time to first appointment, types of clinicians providing services, and utilization management and appeals procedures. Chapter VIII presents findings on MCOs' behavioral health quality management activities. Chapter IX summarizes the conclusions of the study and discusses implications for various stakeholders.

Previous | Table of Contents | Next