Iowa ignores conventional wisdom on behavioral health
September 1, 1999 4 minutes read
Iowa ignores conventional wisdom on behavioral health
Medicaid enjoys very smooth’ rollout of managed care plan, integrating mental health, substance abuse
The first round of grant money available under a newly restructured Medicaid behavioral health program is about to flow to mental health and substance abuse providers in Iowa, following an exceptionally smooth rollout of the state’s new plan to combine these services.
The innovative "community reinvestment grants" are part of an integrated, restructured system for behavioral health that Iowa officials implemented Jan. 1. (See related story, p. 2.) The Iowa Plan dangles financial performance incentives and penalties in front of its Medicaid contractors and integrates mental health and substance abuse to a degree unprecedented in the state. "I don’t know of any other especially successful carve-out programs, other than perhaps the Massachusetts program, which is less venturesome than the Iowa one," says Jim Verdier, a Mathematica senior fellow who helped recommend the program’s managed care vendor.
The Iowa Plan provides mental health and substance abuse coverage for about 180,000 residents, approximately 85% of those eligible for Medicaid. Under a single contract, Merit Behavioral Care of Iowa provides both services with about $60 million annually in Medicaid funding and state and federal grants, or just over $28 per member per month in the risk-based contract. The agreement is for 2½ years, with three one-year extensions available before it must go out again for bid.
The program is shaped by Iowa’s extraordinary efforts to incorporate public opinion into public programs. As state officials considered further integrating substance abuse and mental health in the Medicaid program, they met with providers, consumers, and other stakeholders extens ively. (See State Health Watch, July 1998, p. 5.)
"The department soon learned that this type of managed care, more so than medical/surgical HMOs, was going to be highly accountable," says Jane Gaskill, a manager in Iowa’s Department of Human Services.
"There are more advocates in mental health, possibly [because] there are greater needs on the part of consumers and possibly [because of] its chronic lifelong nature. Whatever it is, the department soon decided not only did we want to expand our array of services, but we also really needed to get a better handle on what consumers and providers and the public thought would make a better mental health program."
The great wall
The current Iowa Plan is descended from Iowa’s Mental Health Access Plan, which state officials had used since 1995 to expand community-based services and inch toward integration of mental health and substance abuse services. In that year, two 1915b Medicaid waivers expanded Medicaid payment to a broad array of previously uncovered mental health and substance abuse services. The state also, for the first time, put both Medicaid and grant funds for substance abuse under a single contract.
Both waiver programs had to be budget neutral; state officials say they met this goal comfortably. At the same time, the programs remained distinct.
"We carefully managed and monitored both programs separately — we actually had one big happy office with a dividing half-wall. In the event that one of them would go down by itself, it wouldn’t take the other one with it," says Ms. Gaskill.
Merit Behavioral Care, later purchased by Magellan Behavioral Health, was the contractor for the mental health program and a subcontractor for the substance abuse program. The substance abuse program, as required by the state, was led by a not-for-profit agency. While for-profit Merit did substance abuse claims management, care management, and reporting, Employ ee and Family Resources, an Iowa-based corporation, handled oversight, provider relations, and other management responsibilities.
It’s telling that when state officials awarded the 1999 contract for a single mental health and substance abuse provider, they felt confident enough to allow a for-profit to apply and to award the contract to Magellan. In a turn of the tables, the company now contracts with Employee and Family Resources for the services the not-for-profit performed under the Mental Health Access plan.
"I’m seeing the implementation of the Iowa Plan as being very smooth," says Ms. Gaskill. While neither state officials nor the contractors are willing to compare the Iowa Plan’s rollout with Magellan’s troubled effort to provide for behavioral health care for Montana Medicaid, both credit extraordinary communication for the program’s relative calm.
"The Department of Public Health and the Department of Human Services always have had a clear vision of what they wanted, and we’ve worked hand-in-hand with them to meet that vision," says Joan Discher, chief operating officer of Merit Behavioral Care in West Des Moines.
In addition, Iowa officials proceeded slowly and did not try to expand the populations covered while restructuring the program, as was the case in Montana. In addition, Mr. Verdier says, Iowa’s "reasonable, businesslike" approach with its contractors and providers helps assuage the inevitable trauma that comes with trying to tinker with entrenched bureaucracies and clinical practices.
"You’ve got to give anybody who tries it credit for trying, and you’ve got to give people in Iowa, who’ve actually pulled it off reasonably well, an awful lot of credit for that," he says.
Performance counts
The state not only has a clear vision, but is willing to put its money where its mouth is — 10 of the program’s 60 performance standards have financial penalties or incentives attached. In one of the 10 standards, for example, Merit has 72 hours to follow up with enrollees who are referred to the hospital by the emergency department but denied authorization. Over a three-month period, Merit must contact at least 85% of the enrollees who are denied such service.
"We released an Request for Proposals that is very specific as to our expectations," says Ms. Gaskill. "It’s not just that we measure them; we sit down and negotiate so that we all understand what those words mean."
Contact Ms. Gaskill at (515) 281-5755, Ms. Discher at (515) 222-5005, and Mr. Verdier at (202) 484-9220.
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