Five Pennsylvania counties seize opportunity to assume controland riskof behavioral health care
PA Behavioral Health Care
May 31, 1997
When it comes to delivering behavioral health care to poor persons, many mental health advocates think nobody does it better than local government.
Five counties in eastern Pennsylvania—Bucks, Delaware, Montgomery, Chester and Philadelphia—have seized the opportunity to maintain control of behavioral health under the state’s mandatory Medicaid managed care program, HealthChoices, since the program began in February.
The roll-out of HealthChoices will take place statewide over the next three years. The five counties are in the region of the state that is the first to enroll Medicaid beneficiaries into mandatory managed care. By mid-July, 522,000 Medicaid recipients will be enrolled.
The five counties were offered the "right of first refusal" to assume financial risk for managing mental health and substance abuse care under a separately capitated program. While only one county has opted to create its own behavioral health company, the others are contracting with for-profit companies themselves instead of letting the state play that role.
The counties that are contracting with private firms say blending the business and public cultures is a challenge but a doable one. One key issue for counties working with private firms has been the payment rates for providers.
Philosophically compatible
Montgomery County and the smaller Chester County are jointly contracting with AmeriChoice Behavioral Health, a for-profit HMO to manage care for their populations.
Ruth Kranz-Carl, who runs the Chester and Montgomery Counties Office of Managed Behavioral Health Care, says AmeriChoice was philosophically compatible and had "respect for the experience that counties have to bring to this partnership." The company also recognized that public clients have more complex and severe problems than commercial ones and that provider networks have to address those needs.
To ensure that there is no skimping on care, Ms. Kranz-Carl says that all policies, including the clinical criteria for services, are approved by the two counties. Montgomery and Chester counties will establish the performance standards. The counties also approve payment rates to providers and provider network composition.
The two counties have created an "incentive pool." If the plan provides exceptional service or exceeds targets for paying claims or telephone response time to beneficiaries, it would get more money.
Bucks County has hired a subcontractor to oversee its contract with AmeriChoice to manage care. The subcontractor reports to the county commissioners. The county also has a management team that meets regularly with officials from AmeriChoice to review issues. Janet Skiba, director of human services, says the county sets expectations and builds in performance standards. If the company doesn’t manage the program efficiently, then the county will step in and manage the funds it gets from the state directly, she says.
Bucks’ subcontractor, Anthony Panzetta MD & Associates, also will seek to ensure that clients are served appropriately when they call. The firm also will monitor for any languishing claims payments and access problems. In addition, Bucks has made clear to AmeriChoice that its payment rates to providers have to be reasonable, particularly during the first year.
"We didn’t want to put anyone out of business," says Ms. Skiba, adding that the company must use the county’s provider network at least initially. She admits that the negotiation with the company over payment rates has been "long and protracted."
"We can’t tell them what to pay but we know what makes sense to keep a provider network going," Ms. Skiba says. So far, the firm has bowed to the county’s concerns.
County mental health providers also need to accept that "doing work in a managed care environment is very different than fee for service. . . . Let’s not kid ourselves, the reason the state did this is to rein in costs," Ms. Skiba says.
Delaware County is directly contracting with Merit Behavioral Health. Marianne Grace, deputy director of behavioral health for the county, says Merit’s philosophy best reflected the county’s philosophy and could bring technical and management skills to the partnership.
Ms. Grace says Delaware has taken the position from the start that this is the county’s contract. "This is not just a pass-through of funds; we are not turning over responsibility for health care to a managed care organization." The county has worked with Merit on policy procedures and coordination of medical and social service benefits, and set standards for access and credentialing.
The county also has helped develop utilization management guidelines for psychosocial services; Merit is contractually bound to the guidelines. The county has set benchmarks for consumer and provider satisfaction and will be looking at data monthly to see if Merit is meeting the standards.
Delaware County also is capping Merit’s profits. Under the contract, 89% of the per member per month payment per recipient "has to go to the cost of care," says Ms. Grace; 11% can go to administration cost for both the county and Merit. The contract also calls for Merit to receive an incentive payment if it exceeds any of eight performance indicators. For example, the county has set a percentage of claims that must be paid within a certain number of days. If Merit substantially exceeds that level, it gets a bonus.
Ron Melzer, vice president for Merit’s public sector programs, says the company is comfortable with the partnership. He likens it to the way a boating crew operates. "Government makes policy and we do the rowing, which is provide the administrative expertise to actually carry out their model."
Mr. Melzer, who spent 20 years in state government before joining Merit this year, says state government "has become a very sophisticated purchaser of services." The companies that will do well, he adds, "are the ones with the technical skill and expertise to manage tightly. If you’ve got the systems and know-how, you will be able to operate with those small margins."
Philadelphia is the only county that has chosen to create its own behavioral health company called Community Behavioral Health (CBH), a non-profit entity. Philadelphia had a leg up on other counties because it had been planning this for years.
"It’s the public sector that really knows how to do this," says Mary Hurtig, policy director for the Mental Health Association of Southeastern Pennsylvania.
"We were not interested in hiring a managed care organization to do this," Ms. Hurtig adds. "Any problem that people encounter CBH tackles, there is an incredible will to problem solve."
CBH is in the midst of a political struggle over whether the city will outsource its administrative services to a private company. CBH officials were not available for comment.
Statewide, Pennsylvania officials are allocating about $350 million in behavioral funds this year to Philadelphia. The four other counties, which have significantly smaller populations, will receive between $25 million to $43 million, based on a formula.
Pennsylvania’s plan "recognizes the county as the point of local accountability," says Martin Cohen, executive director of the Technical Assistance Collaborative, a Boston-based consulting firm. It is also forcing counties "to demonstrate that they, in fact, can manage these dollars and put a program in place that is really sensitive in terms of quality, access and costs."
—Janet Firshein
Contact Ms. Hurtig at 215-751-1800. Ms. Skiba at 215-348-6202; Ms. Grace at 610-713-2457; Ms. Kranz Carl at 610-278-3020; Mr. Cohen at 617-742-5657; and Mr. Melzer at 215-504-3977.
Five Pennsylvania counties seize opportunity to assume controland riskof behavioral health care
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