NYSPA Report: How Will New York State’s Transition to Medicaid Managed Care Impact Those with Serious Mental Illness?

Skepticism, not cynicism, will be in order during the coming year as New York State’s efforts to place all of its Medicaid enrollees, including those with serious and persistent mental illness, into Medicaid Managed Care Plans (MMCPs) is realized. Reaching this goal is an important part of the Cuomo administration’s Medicaid Redesign initiative, set in motion to reduce the state’s disproportionate Medicaid expenditure. By doing so, NYS will join with the many other states, including Kentucky, Tennessee, Illinois, and Florida which have taken this step. To its credit, NYS did not rush to make the change prematurely but is now forging ahead rapidly. It started by designating regional Managed Behavioral Health Organizations (MBHOs) to gather data about the residual Medicaid Fee for Service population’s use of mental health services and provide the state with specialty behavioral managed care experience. The expectation is that the information obtained will help shape the managed care model to be created. While this is a good plan, we think that the state should also be collecting similar data on those consumers with MHSU Disorders who have been receiving their behavioral care within the MMCPs. Data collected in many states show that there are more patients being treated within the general medical system as compared to the specialty behavioral system even when the behavioral benefit is “carved out.”

The state has signaled that it would like to move all behavioral care under the broader Managed Care Organizations (MCOs). The actual clinical outcomes of this devolution to MMCPS remain to be ascertained. Nationwide it is not uncommon to have Medicaid MCOs manage a limited Mental Health/ Substance Use (MHSU) Disorder benefit. However, moving very vulnerable persons with serious and persistent mental disorders (SPMIs) into MMCPs carries a greater risk for these enrollees than for those whose use is more limited. Based on the NYS experience and that in other states with MHSU Disorder managed care, the concern of patients, families, providers and advocates seems well justified.

I am very pleased that Dr. Henry Harbin has agreed to coauthor this article with me because he knows the subject of behavioral managed care as well as, and perhaps better than, most others. The reason that his thoughts on this subject are so highly valued is that he served as the CEO of 2 national managed behavioral health care companies, Greenspring Health Services and Magellan Health Services, which at the time was the largest nationally with 70 million covered lives. He spent 10 years in the public mental health system in Maryland including serving as its Commissioner of Mental Health. Also, he served as a Commissioner on the President’s New Freedom Commission during 2002 – 3. He has been an early proponent for improved integration of mental and general health care.

Dr. Harbin has had experience with Medicaid management models in many states. He informs that there is little to no scientific evidence that moving the SPMI cohort into Medicaid MCOs will improve their clinical outcomes or reduce costs. He explains that states may undertake the transformation to entirely managed systems for financial, organizational, or clinical reasons. The consequence for enrollees may well depend on which motivation primarily drives the change.

It is our purpose in this piece to articulate principals based on which consumers, their families, providers, and advocates will be able to make informed judgments about the managed care scheme the state lays out for the care of those with significant mental health care needs.

The following are some matters worthy of consideration:

Many state Medicaid directors would like to move all patients and the premiums to support those patients under one administrative umbrella, the Medicaid MCO, hoping for administrative simplicity, and cost predictability and effectiveness as compared to contracting with many regional MBHOs. Given the vast amounts of money involved many Medicaid MCOs are lobbying to have all disease groups, especially those with chronic high cost illnesses, including behavioral, placed entirely under their control. Furthermore, many states are expecting that having all specialty behavioral services under the broader health management entity, the Medicaid MCO, will allow for better integration of medical and behavioral care. Based on experience, Dr Harbin believes that there is minimal if any data to support the expectation that this will be more cost effective nor is there research or experience that shows that clinical care will be better “integrated” or “coordinated” when all MHSU Disorders benefits are put under the same management entity. Rather, almost all of the research around improved clinical and financial outcomes for integrated care is based on clinical interventions like Collaborative Care within primary care. Given the huge financial forces which come into play around these realignments, providers, patients and families hope their interests will be taken into account as these high-level decisions are taken. While fearing a harsher system, they hope the system will not be made even less user friendly than it currently is. At best, perhaps they can hope for some improvement.

Part of the problem is that administrators and planners confuse administrative and financial integration with clinical integration. The field now has a solid research base that supports a clinical evidenced based model called “Collaborative Care for Mental Health in Primary Care”. It is effective both in terms of significantly improved clinical outcomes but also in reducing medical costs. Most of this research was done with MHSU Disorders in the mild to moderate levels of need. There an increasing research base suggesting that this clinical model works with more serious conditions as well.

This clinical model works whether the financial management of the entire healthcare benefit is under a single insurance entity or separate entities including MBHOs. For an insurer to implement an evidenced based Collaborative Care program requires flexible reimbursement of several key services and most of the cost savings accrue due to reduced medical, not behavioral, costs!

One of the approaches that interested parties in NYS could advocate for during this period of transition would be that NYS DOH require all Medicaid MCOs to begin implementation of the Collaborative Care Model for non SPMI MHSUD patients who receive part or all of their behavioral care within primary care setting. Most of these patients never receive treatment within the specialty mental health system. This would allow the state and advocacy organizations to judge the competence and effectiveness of a Medicaid MCOs to improve the outcomes of the MHSUD patients that are already under their management authority before moving SPMI patients who require a more complex set of interventions under their span of control. If an MCO is unwilling or unable to implement a well-documented clinical intervention that is low cost and effective, then it is unlikely they will be able to manage a more complex set of patients.

Other questions to ask will be:

  • Does the state’s proposal fairly require that providers at each level of care will only be held accountable for outcomes which lie clearly within their span of control? That is, will the MMCOs be allowed or denied the opportunity to shift responsibility without acting as partners in clinical problem solving?
  • Does the proposal recognize that the current criteria being utilized by Medicaid MCOs are ill suited for making care determinations when addressing the needs of the SPMI population, as they are meant to evaluate acute care situations appropriate to the oversight of patients utilizing only limited behavioral services?
  • Do the state’s contracts incorporate safeguards which would protect persons with SPMI if MCO services are completely carved in and do the contract metrics required of MCOs make improved clinical and financial outcomes more likely? For example, will the state require that any savings, if there are any, in the behavioral premium be reallocated to consumers with these problems or will these dollars be reallocated to the general health system as has happened in other states? Will the state track how often SPMI patients end up in jails or prisons as a result of inadequate treatment or poor coordination?
  • Do the service deliverables include the essential services considered necessary to improved outcomes for persons with SPMI? At a minimum, the array of services should be no less than those currently available to persons with SPMI.
  • Does the state describe a mechanism by which MCO coordination with all of the social service agencies and entities, like school systems, corrections, juvenile services, housing agencies, etc., is assured? Most general Medicaid MCOs are not familiar with the broad array of support services that are provided to many seriously ill patients with behavioral problems.
  • Does the state require that the MCOs hire MHSUD clinical and administrative staffs that have proven expertise in managing the SPMI population?

If the proposed system is to serve persons with SPMI well, advocates should only be satisfied if these and other targeted questions are asked and affirmatively answered. Some of these questions can be answered now before rolling the dice and transferring all patients if the state would require the MMCPS to produce clinical and financial data on how well their current population of patients with these problems are being handled.

Barry B. Perlman, M.D. is the Director, Dept. of Psychiatry, Saint Joseph’s Medical Center, Yonkers, N.Y., a past President of the New York State Psychiatric Association, and past Chair, NYS Mental Health Services Council. Henry Harbin, MD, a psychiatrist, is a Health Care consultant and former CEO of Magellan Health services.

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