Medicaid Contract Purchasing SpecificationsMedicaid Managed Care for Children with Behavioral Health NeedsA TECHNICAL ASSISTANCE DOCUMENT(October, 2000) These sample purchasing specifications are being prepared by the George Washington University Center for Health Services Research and Policy (CHSRP) in consultation with officials from Substance Abuse and Mental Health Services Administration (SAMHSA) and faculty of the Georgetown University Child Development Center's National Technical Assistance Center for Children’s Mental Health (GUCDC). It is intended that, when this document is completed, it will serve as a tool to assist state officials in purchasing services from managed care organizations (MCOs) or behavioral health organizations (BHOs) on behalf of children with behavioral health needs who are eligible for Medicaid. These specifications will be accompanied by a guidance document being prepared by GUCDC. These sample purchasing specifications are optional, and do not necessarily reflect the views of SAMHSA, HRSA, or HCFA. As the Surgeon General recently noted, Medicaid managed care arrangements involving children with behavioral health needs warrant careful consideration: "…administrators of state Medicaid programs have recently implemented managed care approaches and structures to reduce health care costs. However, Medicaid populations tend to have a higher prevalence of children with serious emotional disturbance than that seen in privately insured populations. Those children generally need longer-term care. Managed care strategies, which developed in the private sector, are geared toward a relatively low utilization of mental health services by a population whose mental health needs tend to be short term and acute in nature. As a result, the kinds of cost-cutting measures used by managed care organizations, such as reduction of hospital stays and encouragement of short-term outpatient therapies, have not worked as well in the public sector with seriously emotionally disturbed children as they have in the private sector." DHHS, Mental Health: A Report of the Surgeon General (1999), p. 185. A recent analysis concludes: “Although several Medicaid managed mental health projects have been evaluated positively, the list of problematic efforts is certainly longer, and some of these efforts (in Tennessee and Montana, for instance) have affected the credibility and perhaps the quality of the state’s whole mental health program. Despite this flawed track record, more use of managed care in Medicaid mental health services is inevitable.” Hogan, “Public-Sector Mental Health Care: New Challenges,” Health Affairs (Sept.-Oct. 1999), pp. 106-111. As the use of Medicaid managed care expands, the illustrative language in these sample specifications can assist interested purchasers in improving the accessibility and quality of behavioral health care to Medicaid-enrolled children. Purchasers may also wish to consult CHSRP's Managed Behavioral Health Care Issue Brief Series, www.samhsa.gov. Organization and Structure of this Technical Assistance Document There is enormous variation in state managed care contracting arrangements for behavioral health services, whether financed by Medicaid or other funds. See Pires et al., Research and Training Center, Department of Child and Family Studies, University of South Florida, Health Care Reform Tracking Project: Tracking State Managed Care Reforms as They Affect Children and Adolescents with Behavioral Health Disorders and Their Families (1999 Impact Analysis)1 and SAMHSA Managed Care Tracking System: State Profiles on Public Sector Managed Behavioral Health Care and Other Reforms, SAMHSA/Lewin Group (July 31, 1998). Given the high variability and continuing evolution of these contracting arrangements, no single set of illustrative purchasing specifications can meet the needs of all state purchasers. There do, however, appear to be two dominant arrangements for state contracting for managed behavioral health care: “a state purchaser contracts directly with (1) a BHO to manage the substance abuse and mental health services; or (2) a full service MCO and the MCO subcontracts these services to BHOs.” Stephen Moss, Contracting for Managed Substance Abuse and Mental Health Services: A Guide for Public Purchasers, Center for Substance Abuse Treatment, SAMHSA, Technical Assistance Publication (TAP) Series 22 (1998), p. 29. The first of these arrangements is referred to as a “prime/prime” because there are two primary contractors -- the MCO and the BHO – to which the state purchaser generally makes capitation payments. The second of these arrangements is known as the “prime/subprime” because there is only one primary contractor – the MCO – to which the state purchaser makes a capitation payment. The behavioral health services for which the MCO is responsible are subcontracted by the MCO to a “subprime” contractor, or BHO. In both cases, the BHOs and the MCOs enter into agreements with providers participating in their provider networks for the delivery of covered services. See diagram below. This document parallels the two dominant contracting approaches described by Moss. Chapter I contains illustrative language for the contract a purchaser could negotiate with a BHO under a “prime/prime” arrangement. Chapter I does not suggest language for the other “prime” contract between the state purchaser and the MCO; for illustrative language, see CHSRP’s general Medicaid Pediatric Purchasing Specifications discussed below. CHSRP’s survey of state Medicaid managed care contracts in effect during 1996 found states use “prime/prime” and “prime/subprime” arrangements S. Rosenbaum, et al., Negotiating the New Health System (2nd Edition), Special Report: Mental Illness and Addiction Disorder Treatment and Prevention, (March 1998), p. 19. Accordingly, Chapter II sets forth illustrative language for use by purchasers interested in implementing the “prime/subprime” approach. Chapter II focuses on the duties of the BHO “subprime” and the division of responsibilities between the MCO “prime” contractor and the BHO “subprime”; illustrative language describing the duties of the “prime” MCO contractor in such arrangements may be found in CHSRP’s general Medicaid Pediatric Purchasing Specifications. Interested state purchasers may, at their option, draw from the illustrative language set forth in either Chapter I or Chapter II, or both, depending on their own policy preferences. This document is not intended as a recommendation of one approach vis-à-vis the other, or as a recommendation that children with behavioral health needs eligible for Medicaid be in enrolled in MCOs or BHOs under either arrangement. In preparing this draft, we have relied on the materials prepared for, and the input received during, SAMHSA’s Stakeholder Council Meeting on January 21 and 22, 1999. In addition, these specifications were reviewed by a representative group from the Stakeholder Council. We also relied upon S. Rosenbaum, et al., Negotiating the New Health System(2nd Edition), Special Report: Mental Illness and Addiction Disorder Treatment and Prevention , (March 1998) and other SAMHSA publications on mental health services and managed care contracting.2 Finally, we received comments from state Medicaid officials, MCO representatives, mental health experts, and others at a vetting meeting held in Washington, D.C. on May 10, 2000. In addition to the sample purchasing specifications, this document, like the Medicaid Pediatric Purchasing Specifications, contains sample contract compliance measures. CHSRP’s reviews of state Medicaid contracts with MCOs “have consistently observed an absence of clear and articulated measures for reviewing the extent to which contractors are in compliance with performance specifications, as well as a failure to specify the data that contractors will be expected to submit to demonstrate their compliance.” S. Rosenbaum, et al., Negotiating the New Health System (2nd Edition), Special Report: Mental Illness and Addiction Disorder Treatment and Prevention, (March 1998) p.56. The compliance measures in these purchasing specifications have been drafted to assist interested purchasers in specifying data and articulating measures for reviewing the extent of compliance by contractors with their duties under the purchasing agreement. How to Use This Technical Assistance Document The drafting format used in these sample specifications is as follows:
Every state purchaser has its own drafting format. The particular format used in these sample specifications is NOT intended as a substitute for each state’s own format. Instead, it is intended simply to divide each suggested provision into the smallest practicable policy elements. This division and subdivision format is designed to enable a user to identify quickly the policy choices contained in each provision and to identify which, if any, of the elements the user wishes to adopt. This format also serves as a detailed checklist for those users who wish to compare portions of their current purchasing documents with the relevant portions of these sample specifications. For example, assume a state purchaser uses the following language relating to reporting in its contracts with MCOs:
Assume further that this purchaser is interested in using the "prime/prime" approach to contract with BHOs to provide services to children with behavioral health needs. If this purchaser were to find that potential BHO contractors are seeking greater specificity regarding reporting requirements in order to better evaluate the administrative burden that they would be undertaking if they were to enroll such children, the purchaser could refer to §209 (Data Collection and Reporting) of these specifications for guidance. Finally, assume that this purchaser is particularly interested in monitoring the use of inpatient discharge plans by contracting BHOs. In this case, the purchaser could use §209(b)(4) of these specifications:
In order to include this policy in its contract with the BHO, the purchaser could, without modifying its current format, adapt the illustrative language as follows (italicized):
Issues Not Addressed in this Technical Assistance Document These specifications do not address issues relating to cultural competence. CHSRP is developing sample purchasing specifications with respect to this critical set of issues. When these specifications are completed, they will be posted on the CHSRP website, www.gwu.edu/~chsrp, for the benefit of interested state purchasers and other potential users. These specifications do not address two types of payment issues: (1) the determination of capitation rates paid to MCOs or BHOs by state purchasers on behalf of enrolled children with behavioral health needs; and (2) payment methodologies used by MCOs with respect to network and out-of-network providers. Part 3 reviews these issues in some detail and suggests other sources of information for interested purchasers. However, Part 3 does not contain illustrative language on either of these issues. For language used by state purchasers relating to these issues, see CHSRP, Negotiating the New Health System, 3rd Ed. (1999), Vol. 2, Part 4, Table 7.1 (payment to plans) and Table 7.2, (plan payment to providers), www.gwu.edu/~chsrp. As in the case of the Medicaid Pediatric Purchasing Specifications, these specifications do not specify any procedural time frames. Instead, a bracket ([ ]) is supplied as a placeholder, indicating that the state purchaser should insert a timeframe of its choosing.
The Balanced Budget Act of 1997, P.L. 105-33 (BBA), made a number of changes in the managed care provisions of the federal Medicaid statute. HCFA has issued two proposed rules to implement these BBA changes: a notice of proposed rulemaking (NPRM) relating to Medicaid requirements for MCOs, 63 Fed. Reg. 52022, (September 29, 1998), and an NPRM relating to the annual, external independent review of the timeliness, access, and quality of Medicaid MCO services, 64 Fed. Reg. 67223 (December 1, 1999). Upon issuance of final rules, these specifications will be updated. These purchasing specifications are consistent with the available interpretations of the BBA provisions as reflected in HCFA's letters to state Medicaid directors and in HCFA's revised Preprint Renewal Submittal for a section 1915(b) Waiver (September 23, 1999), www.hcfa.gov/medicaid. However, these specifications are not, and should not be viewed as, an official interpretation of the BBA or of HCFA's policy guidances. Related CHSRP Activities As discussed above, CHSRP has developed optional specifications for the purchase of Medicaid services from MCOs on behalf of all Medicaid-eligible children, whether or not they have behavioral health needs, www.gwu.edu/~chsrp.3 The optional specifications set forth in this document for children with behavioral health needs are designed to supplement CHSRP’s general Medicaid pediatric purchasing specifications. Where appropriate, these optional specifications for children with behavioral health needs include cross-references to the general Medicaid pediatric specifications, which are cited as “MEDICAIDSPECS (www.gwu.edu/~chsrp).” In addition, CHSRP is developing a number of sample purchasing specifications that overlap with this document. These include specifications with respect to:
As these specifications are completed, they will be posted on CHSRP’s website, www.gwu.edu/~chsrp. Endnotes1 See http://www.fmhi.usf.edu/cfs/stateandlocal/stateprog.htm#state 2 For additional information, see Stephen Moss, Contracting for Managed Substance Abuse and Mental Health Services: A Guide for Public Purchasers, Center for Substance Abuse Treatment, SAMHSA, Technical Assistance Publication (TAP) Series 22 (1998); SAMHSA Managed Care Tracking System: State Profiles on Public Sector Managed Behavioral Health Care and Other Reforms, SAMHSA/Lewin Group (July 31, 1998); SAMHSA, Partners in Planning: Consumers' Role in Contracting for Public Sector Managed Mental Health and Addiction Services, Managed Care Technical Assistance Series, Vol 10, SAMHSA/Bazelon Center for Mental Health Law (April 1998). See www.samhsa.gov. 3 CHSRP has also developed a set of sample purchasing specifications for use by State Children’s Health Insurance Program (SCHIP) agencies that parallel the Medicaid pediatric purchasing specifications. SAMHSA’s Center for Substance Abuse Treatment has conducted Team-Building Workshops on coverage of behavioral health benefits in SCHIP plans.
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