Managed mental health; finding coverage that fits

Managed mental health; finding coverage that fits

Deborah W. Garnick

The rapid growth in managed mental health care–as of January 1995, the journal Health Affairs reports, there were 108 million enrollees–makes it increasingly difficult to find the plan best suited to a particular population. The task can be particularly daunting for small and mid-sized companies. Vendors that readily fine-tune their services to accommodate major employers may be unwilling to do the same for smaller firms.

No matter what the size of a company, though, aligning employees’ mental health needs and provider services is crucial, both from a quality and cost perspective. While only 5 to 7 percent of enrollees typically use behavioral health services in any given year, the length and intensity of treatment may push claims costs far out of proportion. Identifying employee and dependent needs and knowing what to ask about the way a mental health/substance abuse (MHSA) plan is structured, staffed and managed are the keys to making a match.

Understand the Choices

Managed mental health plans typically fall into one of three categories: integrated HMOs, carveouts or hybrids. All rely on similar cost-containment techniques, such as preauthorization of treatment, utilization review and emphasis on lower-cost treatment modes and settings. Structurally, each one is quite different.

* Integrated HMOs cover medical care and MHSA services within the same network of providers. Using primary care gatekeepers, one organization controls expenditures, assumes risk, manages member services and oversees costs, although the HMO may have a subcontractor manage its behavioral health services.

* Carveouts keep behavioral health entirely separate from the basic managed care plan. Treatment, reviews and case management are performed by mental health clinicians who work for or contract with the vendor, which often assumes some financial risk.

* Hybrids, often offered by group practices, combine features of integrated plans and carveouts. Patients with complex or severe mental disorders are referred to outside providers; providers in the network handle the others.

Proponents of integrated programs argue that many MHSA patients have related medical problems–certain types of cancer are associated with severe depression, for example–that are easily overlooked or improperly diagnosed by someone with training exclusively in the mental health field. Those who favor specialization counter with evidence that primary care physicians often fail to detect behavioral disorders like depression or alcoholism. They point out, too, that primary care settings rarely have the resources to provide the range of services that patients with serious or chronic mental disorders may need.

Identify Prombles and Patterns

Analyzing several years’ worth of mental health and substance abuse claims with an eye toward conditions and costs is the first step in selecting both the best type of plan and the specific services to be offered. In most cases, a pattern will emerge. Several typical company profiles, all of them hypothetical, follow:

* A chain of auto supply stores finds that only about 3 percent of those it covers submitted claims for mental health but that most of those claims involved a dual diagnosis of substance abuse and depression. That would make the cost of paying out-of-network fees on a case-by-case basis prohibitive. Better alternatives: a carveout that provides specialized case management services or an integrated plan in an HMO that offers case management and experienced mental health providers either on staff or by referral.

* A software development company staffed by highly educated, specially trained people, on the other hand, tallies 10 percent of its claims costs in outpatient psychotherapy. If staff retention were the employer’s top priority, a vendor with a wide network of inpatient and outpatient services and a liberal clinical philosophy would be a better choice than a tightly managed integrated plan.

* A manufacturing firm’s study reveals high absenteeism and industrial accident rates–and the likelihood of numerous cases of untreated addiction. A carveout that includes a high-quality employee assistance plan, providers with expertise in treating substance abuse and management training in detection and intervention would be ideal.

Get answers to key questions

Finding the right mental health coverage, of course, involves far more than choosing the type of plan. Probing questions about the structure, staffing and management system used by each of the vendors under consideration should be part of the selection process. Visiting the headquarters of serious contenders is likely to reveal a lot about how people are dealt with and day-to-day activities are carried out.

To help employers or third-party administrators investigate prospective managed behavioral health plans, we have identified six key issues: the integration, or lack of it, between mental health and medical services; how a patient gains entry into the system; how special populations, such as chronic users of mental health services, are managed; how providers are selected, trained and monitored; the basis for utilization management and clinical decision-making; and the level of accountability to the employer. To get you started, we’ve provided some sample questions and answers for each:

1) Integration: “We offer a carveout of mental health and substance abuse services, but we are willing to work with medical providers.” That’s the typical answer to a standard question about integration. But it’s not enough. To find out the actual level of integration, press for specifics.

Are all patients with behavioral problems referred to the MHSA provider network or are some treated by medical generalists, for instance? What’s the basis for these decisions and who makes them? It should be someone with a background in mental health, not a clerk with a set of guidelines.

What percentage of the monthly capitation fee is allocated to behavioral health? (It should be about 5 percent.) Ask about the range of fee schedules or the salaries that mental health providers receive. Although payment will depend on credentials and the experience of the individual provider and reflect regional differences, ask for evidence that it’s high enough to attract experienced, accomplished practitioners. Find out if the plan offers providers financial incentives for limiting treatment, a common criticism of managed care.

Inquire, too, into how quality is assured, the length of the contract between vendor and provider and whether the relationship between the MCO and the behavioral services vendor is subject to performance standards and periodic review. If the carveout firm was recently chosen, delve into the selection process and what was done to smooth patients’ transition to a new set of providers. Allowing three months’ grace period for outpatient care and delaying inpatients’ change of providers until after discharge, for instance, indicate regard for the well-being of patients.

Finally, consider how the level of integration will affect your own operation. Although carveouts may provide more services than integrated plans, they can also mean more complex administrative functions and higher administrative costs. Some employers opt for integrated mental health services with a medical plan that offers one-stop shopping instead.

2) Access: The way in which patients can enter the mental health system strongly influences the number and type of users. Is self-referral permitted, for instance? Does the plan feature an EAP for employees, and is there a hot line or 800 number readily available? Plans that require a primary care provider to identify the problem and make the referral may make it difficult for some enrollees to get treatment they feel they need. Similarly, if emergency hospitalization for a substance abuse or mental health crisis is the only way to gain quick access to the system, fewer patients–and most of them seriously ill–are likely to get continuing treatment.

Question a plan’s basic operation to determine whether other barriers to care exist. If therapists, especially MDs, must phone for permission to admit a patient to a hospital, for example, are telephones answered within five rings? Is voice mail available as a back-up, and if so, how long does it typically take for a return call? People should be available to answer the phones at the times doctors are likely to call, often in the early morning. And, if initial interactions between therapists and nurse reviewers often lead to further review by physicians, there should be an electronic record transfer system to assure prompt and informed decision making.

Finally, review providers’ schedules. Do they have ample evening and weekend office hours to allow employees to get outpatient therapy without disrupting their workday?

3) Special needs: Coordination between medical and mental health providers is a must for enrollees with chronic or severe mental illness, including children or young adults with anorexia or other serious disorders and patients with dual diagnoses. If you’re concerned about a special population, look for a plan with protocols drawn from the appropriate professional society, such as the American Academy of Child Psychiatry. Does the plan employ–or contract with–specialists in eating disorders and addiction, for example, or rely primarily on programs with a 12-step self-help orientation? A plan capable of caring adequately for patients with severe or chronic psychiatric conditions should have links with an array of clinical services, from home care to short-term crisis care (often referred to as 23-hour crisis beds) to specialized inpatient treatment.

4) Providers: Any behavioral health plan is only as good as the people who deliver patient care, so question the backgrounds of primary care physicians and specialists who treat MHSA patients. If you’re considering an integrated or hybrid plan, make sure the primary care physicians have had additional training in mental health.

Does the plan have a mix of specialists, including board-certified psychiatrists, PhD-level psychologists and licensed masters’-level social workers? If so, what determines which patients are referred to which level of provider and type of treatment?

Find out, too, who performs initial assessments and where and how they take place. Generally, clinical specialists who are skilled evaluators talk to patients by phone and follow up with an immediate in-person assessment in the event of a crisis. Registered nurses or board-certified doctors with specialized behavioral training are better equipped than other practitioners to ask relevant questions, investigate treatment alternatives and get approval of proposed treatment plans.

5) Management: The way a plan manages costs and utilization also affects the treatment employees and dependents receive.

Some plans require the patient or provider to get preauthorization from a clinical review professional prior to admission to a hospital or, increasingly, other intensive mental health treatment such as outpatient rehabilitation for a substance abuser. If a plan you’re considering uses this pre-admission certification method, find out if post-admission review, which typically must occur within 24 hours of an emergency admission, is acceptable in a crisis.

Once a patient is hospitalized, plans require concurrent review, with the frequency depending on the clinical findings and the proposed treatment and discharge plan, to authorize a continuing stay. Outpatient review is commonly required before a plan approves more than five to seven therapy sessions as well. Here, too, the frequency of review depends on the diagnosis as well as on the policy of the MCO.

Ask whether the plan uses case managers, who typically serve as patient advocates and coordinate cost-effective care and support services for patients with complex, lengthy or expensive chronic illnesses. Some plans use what they call access managers–they’re usually primary care physicians in integrated plans and behavioral health nurses in carveouts–as patients’ initial point of contact with the system. Like case managers, they match patients with providers or programs geared to their particular needs. Carveout plans often use access managers as gatekeepers who evaluate all treatment plans, discuss treatment options and make referrals to the appropriate network provider.

Managed MHSA plans, like other types of managed care, rely on clinical guidelines to determine whether treatment is justified and what level of care to provide. But selecting guidelines is more complicated than for medical care because there are so many behavioral treatment alternatives. Before you contract with a plan, ask which guidelines provide the underpinnings for clinicians’ decisions and whether the guidelines are fully disclosed. They should be based on published literature, consensus by expert panels, professional societies or government sources such as AHCPR’s clinical practice guidelines for treating depression, or norms established for a group with a profile similar to yours.

6) Accountability: Does the plan provide clients with periodic reports on how it measures up to its advertised service standards, such as time to answer the phone and its grievance and appeal resolution rates? What about outcomes measures such as employee satisfaction, symptom improvement or hospital re-admissions? If not, it should. Will it provide periodic reports showing initial levels of use and costs and subsequent changes in substance abuse, mental health and total claims submitted by those your company covers? (HMOs may not have such data readily available unless they contract with a behavioral health vendor.) If the cost is prohibitive, consider teaming up with other mid-sized or small companies with similar profiles to order–and share the price of–reports tracking usage patterns.

Be aware, however, that even the best reports do not always reveal the true costs and benefits of care. For example, people treated for substance abuse frequently receive significantly more mental health care than other patients because of other disorders that complicate the addiction problem. Or their claims may be incorrectly coded as mental health rather than substance abuse diagnoses.

With so many players in the behavioral health field, prudent buyers have little hard data or research to count on. An informed analysis of the needs of a particular population, an understanding of the types of plans on the market and an in-depth exploration of the key issues influencing the quality and the cost-effectiveness of managed mental health and substance abuse plans can lead to the right decision.

Deborah Garnick, ScD, is an associate research professor at Brandeis University’s Institute for Health Policy in Waltham, Mass. Ann Hendricks, PhD, is a senior economist at the Veterans Administration Health Services Research and Development Program in Bedford, Mass. Suzanne Gelber Rinaldo, PhD, of SGR Health, Ltd. in Wilton, Conn., is a senior research associate at the Brandeis Institute for Health Policy. Support for this project came from

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