Montana managed care officials bust deadlines to replace troubled behavioral health care vendor
Regional nonprofit plans likely to succeed statewide commercial MCO
Contingency planning: That’s how Montana officials are coping with the turmoil swirling around the state’s behavioral health managed care program.
The only certainty is that the current contractor, Magellan Health Services, is exiting early from its five-year, $400 million contract to provide behavioral health services to Montana Medicaid residents. But state officials and Magellan officials can’t even come to agreement on the exact date for terminating their rocky two-year relationship.
"It’s under negotiation," says Erin Somers, a Magellan spokeswoman in the company’s Columbia, MD, behavioral health subsidiary. At issue is when the clock did (or will) start ticking for the contract’s 180-day notification clause for termination. Parties to the dispute have claimed exit dates that range from April to late fall. Montana officials say even the best-case possibility is not good enough.
"Nov. 1 will be difficult, to say the least," says Randy Poulson, head of the state’s bureau of managed care.
Despite Montana’s disastrous experience with Magellan and its two corporate predecessors, the state remains committed to providing Medicaid behavioral health services through a managed care model, says Mr. Poulson. To ensure that services and provider payments flow smoothly, state officials have crafted a transition strategy that involves the following:
• Increased reliance on outside consultants. Lansing, MI-based Health Management Associates (HMA) and other consultants are helping to assess the current status of the plan and develop projections for future contractors. In addition to a two-year evaluation slated to be completed in April of this year, HMA is analyzing how program services should be regionalized and what software the state should use under various service delivery scenarios, and helping the state secure the necessary HCFA waivers.
• Abbreviated public input into the plan. The request for proposals that brought behavioral managed care into the state two years ago is the product of extended public discussion, "but we’re not going to have the luxury of that this time," says Mr. Poulson. On the bright side, state officials are confident that the skeleton of the existing RFP is sound.
• Close communication with Magellan.
• Close communication with regional and national officials in the Health Care Financing Admi ni stration (HCFA). The program’s 1915b waiver expires April 1, and the state is negotiating one or more temporary extensions until new contractors are found.
The experience with Magellan has suggested to Mr. Poulson an additional task for potential applicants: successful completion of a rigorous dress rehearsal. In retrospect, he wishes he had imposed the requirement on Magellan’s predecessor, CMG.
"There was a hurry to bring them on, and they were not ready to be implemented," says Mr. Poulson. "We want [new vendors] to demonstrate the ability to go live before they go live. If we’ve learned anything, that’s one of the most important things."
In the meantime, state officials have a daunting to-do list:
• Maintain the current level of services and claims adjudication.
• Prepare an RFP that meets the legislature’s apparent goals of regionalizing behavioral managed care. The challenge is that specific legislative direction may change while administrators are developing the RFP.
"It’s terribly difficult," says Lou Thompson, a program analyst within the state’s addictive and mental disorders division. "We hope to have the RFP on the street by April 16. Realistically, our legislature probably won’t even have adjourned by that time."
For example, one of the unresolved variables is the licensure requirement for the new vendor or vendors. A bill being considered by the legislature would require Magellan’s successor to be licensed as an HMO, which is not currently mandated.
• Prepare for a temporary transition to fee-for-service, if necessary. State and Magellan officials are discussing the possibility of having Magellan provide administrative services during that time.
• Ensure that Magellan meets its obligations for a smooth transition.
As it has throughout its relationship with the state, Magellan maintains the program simply is not funded adequately to provide the level of service demanded. In newspaper ads throughout the state, Magellan officials describe a $17 million shortfall in the program that they whittled down to $10 million through "significant efficiencies" in their operations.
"We can’t continue to subsidize the program," Ms. Somers says.
Contact Ms. Somers at (410) 953-2405 and Mr. Poulson at (406) 444-2706.
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