Montanas behavioral health program will manage state hospital and use savings for added services
Montana Behavioral Health
December 31, 1996
Montana, one of the nation’s most rural states with little experience in managed care, is taking the lead in bringing
managed mental health care to low-income residents, both those who qualify for Medicaid and those who don’t.
Montana’s statewide Mental Health Access Plan is innovative in two important respects:
• it will blend all Medicaid and non-Medicaid funds for mental health into one program that includes the budget for the state hospital and covers some non-
Medicaid residents up to 200% of the poverty level, and
• it will be operated by a joint venture between the newly formed non-profit Care Coalition of Montana and CMG Health, Inc., a privately held, for-profit corporation based in Owings Mills, MD.
The Care Coalition comprises more than 20 human service organizations, including all five of the state’s community mental health centers. Such joint ventures between for-profits and non-profits have been tried on a smaller scale in other states, including parts of Colorado and Florida.
Value of the contract is estimated at $75-$80 million, or about $400-$500 million over the 5-year period. In an average month, about 80,000 Medicaid-eligible and non-Medicaid-eligible residents will qualify for the program, which takes effect April 1. But Deborah Ekstrom, who is heading up the effort for CMG, says the plan expects to serve about 15,000 to 20,000 people a year, including about 7,000 people not eligible for Medicaid who will be required to pay for benefits on a sliding scale.
Non-Medicaid eligibility is restricted to adults with a severe mental illness and children with a serious emotional disturbance.
For the first time, Montana will extend pharmaceutical benefits to the non-Medicaid population. State officials acknowledge that the cost of this expanded service remains one of the big unknowns about the Mental Health Access Plan.
"We think it (the expanded prescription drug coverage) is going to cost a heck of a lot. We’re a little uneasy with it," says Kathy McGowan, executive director of the Montana Council of Mental Health Centers. If drug coverage for non-Medicaid eligibles "ends up costing somewhere between $4-8 million, that could take a substantial chunk out of the total budget for mental health," she says. In the past, psychotropic drugs were often provided through special programs offered by pharmaceutical companies which are unlikely to be continued, Ms. McGowan says.
Ms. Ekstrom, CMG’s vice president for government programs, acknowledges the financial challenge the Montana’s Mental Health Access Plan faces, "with no more money coming into the system." The biggest potential savings is in reducing the size of the state hospital, which has a $20 million budget to treat about 600-700 patients a year. (The average daily census is about 200). Ms. Ekstrom believes savings also can be realized by "adjusting utilization at all different levels of the system."
Reducing the hospital’s role could prove difficult since it is a relatively large employer in the state and has received strong legislative support over the years. Initially, the state planned to require the behavioral health organization that won the contract to guarantee use of a minimum number of beds per year, but eventually that stipulation was abandoned, Ms. McGowan says.
Ms. McGowan also worries about what will happen to an unknown number of non-Medicaid eligibles with less serious mental illness who were treated by mental health centers under the less-rigorous guidelines of the old system, but will be left out under the new one. The mental health centers are concerned that these people could end up in emergency wards, costing the system more, not less, than before, she says.
Despite these concerns, Ms. McGowan says she is optimistic about the Health Access Plan because of CMG’s willingness to work with a board weighted heavily toward community representatives. The board will have eight representatives selected by the CARE Coalition and only two CMG representatives, along with. Community advisory boards also will be established in five regions around the state.
The strong role of a local board, coupled with "growing animosity and bitterness between providers and the state of Montana" over reimbursement and other issues made it easier for many local providers to accept the switch to managed care, Ms. McGowan says.
According to Ms. Ekstrom, CMG will serve as managing partner, with responsibility for day-to-day administration, but the board will have responsibility for the overall execution of the contract, as well as for making policy decisions and approving the budget.
The contract calls for the joint venture’s profits to be based on an independent assessment of performance. A 2.5% profit cap is set for "adequate" performance, 5% for "good" performance, and 7.5% for "excellent" performance. Randy Poulsen, managed care bureau chief for the state’s Addictive and Mental Disorders Division, says details on how the assessment will work and who will do it must still be worked out.
Ms. McGowan says CMG and the Care Coalition have promised to put $1 million of their "profits" into new community programs that offer less-expensive alternatives to hospitalization including crisis programs staffed with 24-hour-a-day psychiatric nurses.
A very open provider network will allow most people to continue receiving treatment from their current providers if they wish.
Substance abuse is not formally covered under the program, although a substantial number of substance abuse providers are covered in the Care Coalition," says Ms. McGowan, who notes that the state has indicated that it would like to roll substance abuse into the program at some future date. Limited funds are now distributed through the counties.
Mr. Poulsen acknowledges that the lack of coordination between mental health and substance is "potentially troubling" because of the possibility of cost shifting.
Montana Community Partners Inc., the non-profit partnership between CMG Health and The Care Coalition, beat out three other bidders for the contract: Merit Behavioral Health Care of Montana, Inc.; Vista Montana, a subsidiary of the San Diego-based Vista Hill Foundation; and Big Sky Health Partnership, a joint venture of OPTIONS Health Care, Inc. and The Montana Plan, a non-profit corporation including Montana hospitals.
Contact Mr. Poulsen at 406-444-5622; Ms. Ekstrom at 410-654-2530; and Ms. McGowan at 406-443-1570.
Managed behavioral health shifts power balance
Managed behavioral health care has shifted the balance of power in many states from the state mental health director to the Medicaid director, writes John Petrila, a professor at the University of South Florida’s Mental Health Institute in an article prepared for the National Alliance for the Mentally Ill.
In the past "the mental health director controlled the bulk of state expenditures on behavioral health services, was responsible for delivery of many services of last resort (such as the state hospital), and was the state official with political responsibility for the state’s public mental health system," he notes.
As states move to managed care, however, "the state Medicaid director . . . may be significantly more important than state or local mental heath directors in affecting the introduction of managed care into the public mental health system."
In an interview, Mr. Petrila stressed that working with these two departments requires an understanding of their different cultures. Medicaid people tend to look at behavioral health care as an insurance program and focus on issues such as benefit utilization criteria while mental health officials have viewed behavioral health as part of a safety net that includes housing and other services, he says.
"While the Medicaid agency will be responsible for obtaining the necessary federal waivers and administering the contract process, the state mental health director ordinarily should take the lead in ensuring that the managed behavioral health care plan is consistent with state mental health policy goals. . . "
Contact John Petrila at 813-974-9301
Montanas behavioral health program will manage state hospital and use savings for added services
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