Medicaid Managed Care - U.S. Senate Special Committee on Aging

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carve-out approach:
- improves the capacity to meet the mental health needs of severe
and persistently mentally ill adults and children;
- is an important first step in developing expertise in managed
mental health care;
- compensates for mainstream plans' lack of experience, capacity
or willingness to provide mental health services;
- improves access by assuring that mental health needs do not
"fall through the cracks;"
- alleviates the bias of the traditional medically-oriented managed
care system against mental. health;
- may operate more effectively and efficiently (professionals who
perform large numbers of specialized procedures for certain
conditions should enjoy economies of scale 4 );
- may reduce or prevent risk selection;
- allows for reinvestment of savings gained from inpatient and
other 24-hour care into other mental health services; and
- clarifies administrative tasks (for example, prior to carving out
managed mental health programs, several states noted that
many HMOs sub-contracted behavioral health to other
organizations, making these services difficult for the state to
monitor).
Partial carve-out model: Delaware and Washington both have partial
carve-out models, but their models have little in common.
- Delaware, only allows managed care organizations to provide
less acute mental health services. State agencies continue to
provide many services (such as psychiatric hospitalization and
residential treatment) for adults and children with severe and
prolonged mental illness. This system arose from the concern
that the managed care organizations did not have the capacity to
provide deep-end services.
- Washington carves-out nearly all mental health services, except
those provided in primary care settings, limited psychological
testing and one hour per month with a psychiatrist.
Washington's community mental health program operates
under legislatively mandated regional (county-based)
authorities. Supporting the established, if ever-changing, system
of care for people with mental illness is the chosen course.
States using partial carve outs seek to tailor their programs to get the best of both
strategies.
4 Ibid, p. 8.
The National Academy for State Health Policy * 0 8/97
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