States Profiles, 1999, on Public Sector Managed Behavioral Health Care

Key Findings

• The number of States with public sector managed behavioral health care programs has tripled in three years. In 1996, 14 States implemented managed care programs. By 1999, 42 States (including the District of Columbia) operated some form of managed behavioral health care. In 1999, two States (Montana and North Carolina) terminated their managed behavioral health care programs and reverted to fee-for-service systems.
• The organization, financing, and structure of each State's managed behavioral health care program(s) varies tremendously. Some are comprehensive, covering multiple populations or areas across the State; some are limited to certain populations or one county or region; and some are risk-based, while others remain fee-for-service through administrative service-only contracts.

• While Medicaid agencies most often serve as the primary purchaser for managed behavioral health care programs, State mental health and substance abuse authorities work in collaboration with Medicaid agencies, particularly for carve-out programs. Medicaid agencies act as the purchaser in 93 percent of States with integrated programs, compared with 69 percent of States with carve-outs.
• Integrated programs most often contract with private sector managed care organizations. Of 30 States with integrated programs, 93 percent contract with private entities, primarily health maintenance organizations. Public sector managed care organizations are more prevalent in carve-out programs. Of the 29 States with carve-outs, 59 percent contract with a public entity, primarily county or local governments and community mental health centers. Counties dominate among all types of public sector contractors, regardless of model.
• Ten States 924 percent) have administrative services only (ASO) contracts with private organizations to operate managed care programs with no clinical responsibilities or financial risk.

• Medicaid is the largest source of funding for public managed behavioral health care programs. Ninety-eight percent of all States with managed behavioral health care programs use Medicaid to either fully or partially fund their programs. Medicaid finances integrated programs almost exclusively. In contrast, carve-outs are much more likely to include a combination of Medicaid and Non-Medicaid funding.
• Thirty-seven States (88 percent of States with managed care) contract with a managed care organization on a capitated basis for at least one of their programs. The next most common payment arrangement consists of fixed fees (12 States) and fee-for-service (10 States). ASO contracts account for seven of the 12 States using fixed fees. In contrast to managed care organizations, providers are predominantly paid on a fee-for-service basis (34 States).

• Carve-out programs are more likely to cover specialty services (i.e., residential, rehabilitation, support, and consumer-run services), while integrated programs are more likely to cover pharmacy services.

• Contrary to earlier findings, SSI (Supplemental Security Income) populations are required to enroll in more than half of the managed care programs providing behavioral health services. Of the 71 Medicaid programs in 41 States, 66 percent have mandatory enrollment for TANF (Temporary Assistance to Needy Families) populations and 51 percent have mandatory enrollment for SSI.