Colorado Department of Health Care Policy & Financing Medicaid Mental Health Rates Performance Audit

Between June and November 2006, the auditors reviewed the Colorado Medicaid Community Mental Health Services Program (MCMHSP). The review evaluated processes for managing service utilization and quality. In response to the audit findings, the Department of Health Care Policy and Financing (HCPF) will institute a series of changes to correct the problems cited by the auditors.

In fiscal year 2006, the State paid $164.8 million to provider organizations for services delivered under the MCMHSP. The services are funded half with federal funds and half with state funds. The auditors found that improvements are needed in the following areas:

• Oversight of utilization management the HCPF needs to set standards for the five behavioral health organizations (BHO) that provide services in the state. While the BHOs used appropriate standards in managing external provider networks, the majority of BHOs failed to exercise the same level of oversight for their internal provider networks
   
• Analysis of BHO data on financial and quality performance data tracking and analysis should be standardized for all BHOs
   
• Oversight of BHO telephone access lines the BHOs use the same quality monitoring standards and the data gathered statewide could not be compared
   
• Monitoring BHO third-party liability recovery efforts a lack of systematic third-party recovery efforts may have resulted in higher program costs
   
• Rate setting was not standardized across the state
   
• Colorado statutes have not been amended to reflect changes in federal regulations