Earlier this week a reader, responding to our coverage of more stringent controls on who receives Idaho Medicaid rehabilitation option services now that the state has moved to a managed behavioral health delivery system, posed the question – “How does the inclusion of Medicaid rehabilitation option services in managed care change these services elsewhere?” (see Idaho Medicaid Managed Care Approach Changing Utilization Of Psychosocial Rehabilitation Services). To answer, we must first define Medicaid rehabilitation option services and look at how states choose to deliver them.
The Medicaid rehabilitation option (rehab option) is the primary authorization path used by states to provide community-based recovery services to individuals with mental health and substance use disorders. As of 2013, all 50 states and the District of Columbia covered behavioral health services to some extent under the rehab option. (As an aside, states could also choose to include these services in their Medicaid state plan using the “clinic” or “outpatient hospital service” options. The reason states use the rehab option is that clinic and outpatient hospital service options are limited to a specific treatment setting, and services under the rehab option can be delivered in a variety of settings, including home and other living arrangements.)
Services included under the rehab option are defined under federal law as “any medical or remedial services (provided in a facility, a home, or other setting) recommended by a physician or other licensed practitioner of the healing arts within the scope of their practice under state law, for the maximum reduction of physical or mental disability and restoration of an individual to the best possible functional level” (see Medicaid Handbook: Interface With Behavioral Health Services). Examples of behavioral health services provided under the rehab option include:
- Individual and group therapy
- Crisis intervention
- Family psychosocial education
- Peer support and counseling
- Basic life and social skills training
- Medication management
- Community residential services
- Supported employment
- Recovery support and relapse prevention training
- Partial hospitalization
- Assertive community treatment
States employ a mix of models to finance and deliver rehab option services. An OPEN MINDS review of states finds:
- 19 states plus the District of Columbia (39%) deliver rehab option services on a fee-for-service (FFS) basis
- 31 states (61%) provide rehab option services using managed care:
- 14 states (45% of states using managed care) include rehab option services in the managed care contract for physical health
- 15 states (48% of states using managed care) contract separately either with local jurisdictions, or with a limited-benefit behavioral health plan
- 2 states (6% of states using managed care) incorporate both managed care models depending on geography (Texas NorthStar) or the beneficiary’s physical health plan type (Massachusetts Behavioral Health Plan for clients served by primary care case management — PCCM — providers)
Beyond medical necessity and recommendation by a state-licensed professional, federal guidance leaves states significant flexibility in how rehab option services are defined and managed. Typical strategies employed by states to manage costs and utilization include:
- Limits on eligibility for services
- Limits on the amount and duration of services
- Limits on eligible providers
- Use of waivers to add services not otherwise included under the state plan
So what is the managed care difference? Systematic enforcement of limits. FFS delivery systems include all these elements, but managed care contracts include specific operational requirements for screening and assessment, establishment of medical necessity, and more recently for demonstration of clinical efficacy. In the Idaho case, the Idaho Behavioral Health Plan (IBHP) builds individualized clinical reviews of a member’s medical necessity into the care management process. For providers and clients, it represents a shift (sometimes significant) in environment rather than a change in policy.
Already, 31 states provide rehab option services using a managed care model. This number will only increase. In the short term, provider organizations need to familiarize themselves with the clinical guidelines in use by managed care entities serving their area, understand which populations are eligible for coverage, and ensure treating staff possess the necessary credentialing to provide therapies that are evidence-based (and reimbursed). Over the longer haul — and at the system level — there is a need to build the case for treatment efficacy by tracking and documenting outcomes (see IOM Committee Finds Military Psychological Interventions Lack Evidence).
Because CMS does not require states to report spending by benefit category, little baseline information is available on rehab option service utilization and spending. At present, the latest study to address this question involved a reconstruction of state Medicaid reporting and was for FFS services only (see the 2007 Kaiser Family Foundation report, Medicaid’s Rehabilitation Services Option: Overview and Current Policy Issues). Premium members, however, can get a detailed review of the current environment and state approaches to delivery of Medicaid rehabilitation option services by accessing our recent Market Intelligence Report, How Are Benefits Delivered Under The Medicaid Rehabilitation Option?