Preparing for Managed Care: Staff Credentialing, Evidence-Based Practices, and Fiscal Systems

For decades, behavioral health (BH) professionals have fought for the right to have mental health (MH) and substance use disorders (SUD) regulated in a similar manner as medical/surgical conditions. First the Mental Health Parity and Addiction Equity Act of 2008 and more recently the 2012 Affordable Care Act (ACA) have begun to make parity a reality. However, with parity has come an entire new set of challenges that BH providers must traverse to ensure that the specialized treatment offered by MH and SUD providers does not become diluted in a managed care model.

Here in New York, Medicaid Redesign Team (MRT) initiatives have piggy-backed on parity laws to begin to reform the BH landscape. No longer will BH agencies exist in a world of “carve-outs” and specialty populations funded through large state contracts. Rather, they will have to navigate new relationships with Managed Care Organizations (MCOs), Behavioral Health Organizations (BHOs), and private insurers for reimbursement while being held to a higher standard of care.

Although all in the BH field will agree that improved outcomes for our clients is the ultimate goal, the process of getting there in a new system will be complex and require the following changes for both organizations and the clinicians they employ.


While the MH treatment community has embraced licensed professionals for treatment of mental health conditions, the SUD community is often seen as employing “para-professionals” and clinicians that have little training and education beyond life experiences of SUD treatment and recovery. Whether or not this perception had any merit in the past, the SUD community has embraced education and training to ensure that clients (many of whom have co-occurring mental health conditions) are receiving optimal care. MCO/BHO contracting will be the final step in ending the old stigma of semi-professionals providing care, as they will require that anyone billing for BH services is properly credentialed and/or licensed. While most SUD providers will have no issues with this and have been hiring only credentialed and licensed staff for many years, some agencies will need to figure out how they can direct current staff to continue education and training. However, one major challenge will be the increased salary requirements that credentialed and licensed staff will demand, and how these costs can be absorbed or shared by MCOs/BHOs, without increasing costs for the already vulnerable clients we serve.

Evidence-Based Practices

The term “Evidence-Based Practice” (EBP) has been the buzz-word in the BH community for quite some time and is often used anytime someone questions what type of treatment is being provided to BH clients. In the new managed care environment, simply saying that the treatment provided is “Evidence-Based” will not be sufficient. Providers will need to evaluate staff training and monitor fidelity to guarantee that interventions are being delivered in a manner where outcomes are optimized. The days of saying an organization practices “Motivational Interviewing – Type Services” for example, will be over, and the exact EBP will need to be manualized, delivered with consistency, with prescribed outcomes that can be directly attributed to the intervention. This will be a challenge for many organizations, as BH agencies often struggle with staff turn-over and issues related to the competency of staff to deliver complex EBPs.

Fiscal Preparedness

Most not-for-profit BH agencies were begun as charities, often founded and operated by individuals who were champions of client rights and wanting to make a difference for individuals afflicted with SUD and/or MH conditions. Through the years, many of these agencies have evolved into corporate-like structures in an attempt to adapt to regulatory changes requiring agency and facility licensure and managing of state, federal, and city contracts. The managed care environment will require additional transformation, where fiscal preparedness and operations will be as key to agency survival as clinical services have been. For example, smaller agencies with little or no experience billing Medicaid or private insurers will undoubtedly struggle initially with the complex billing and justification requirements set forth through MCO/BHO contracts.

Additionally, many smaller agencies may not have the administrative/fiscal staff available to re-bill rejected claims, analyze and implement regulations, and adequately justify the reauthorization of treatment. Recent requirements by New York State related to the maximum percentage of costs that can be expended on administrative staff will further limit the number of staff that agencies can hire to navigate reimbursement, which will undoubtedly lead to mergers for a necessary “economy-of-scale.”

These three challenges are only a few among the countless that will be encountered over the coming years. BH agencies will need to begin to work together through this process to maximize the success that can be achieved. As many large and established BH organizations are poised for success in this new landscape, they must work together will smaller agencies to help them survive and thrive. Recent data from SAMHSA showing that 18.9 million adults in the US had a past year SUD, and 41.4 million adults had mental illness in the past year underscores the need for more treatment options for clients (SAMHSA NSDUH 2011). The survival of all quality BH agencies, both big and small, is key to a strong BH system where help is available to those who need it.

Odyssey House is a not-for-profit, comprehensive, social services organization. Based in New York City, Odyssey House offers residential, outpatient, and family-based substance use disorder and mental health treatment, supported housing, medical, dental, vocational and educational services. For treatment referrals, admissions, and program services, please call: 212-987-5100, email:, or visit us online at:

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