OIG’s Recommendations for State Medicaid Mental Health Programs

In addition to the three core recommendations for state Medicaid managed mental health programs, the Office of the Inspector General (OIG) also made recommendations to address specific issues in moving from fee for service to managed care. As of July 1998, 36 states had implemented mandatory Medicaid mental health managed care programs.

The OIG recommended that states starting mental health programs take the following steps:

4 Separate mental health services from other health services.

- Phase in the conversion.

- Exclude the pharmacy formulary from managed care.

- Use the existing public mental health system.

- Keep contract language specific.

As programs transition from fee for service to managed care, they should:

4 Provide community education early and often.

- Involve beneficiaries in the conversion process.

- Involve beneficiaries and their families in treatment planning.

- Ensure timely payment of providers.

Access to care can be improved by:

4 eliminating copayments;

- assigning health care coordinators;

- allowing any accredited provider to participate;

- encouraging liberal prior authorization policies;

- initiating outreach programs;

- developing rural services;

- initially sharing financial risk to encourage development of services.

The OIG’s recommendations for children’s mental health are:

- Specify services for children’s mental health in managed care contracts.

- Develop interagency agreements to promote coordination.