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

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sannes and for certain conditions. Research indi4cae that no single approach
is universally superior, and few treatment approaches can be
eliminated as universally ineffective. The most important characteritic
of an effective mental health service system is the appropriate matching
of services and need, based on individual clinical conditions and circumstances
and individual choice This means that listing benefits alone is
not sufficient to produce good outcomes.
The benefit package can provide incentives that will encourage desired
patterns of utilization to enhance effective care, such as substituting
lower-cost equivalent services. However, a judicious mix of benefit
design and individualized decisionmaking is still needed to match individuals
and services correctly. Benefits must therefore be flexible, and financial
incentives promoting lower-cost services that are equally or
even more effective in the long term (such as in-home services, consumer-run
services, assertive community treatment and medications)
must be balanced by controls on the use of such services by individuals
who do not need them. Selecting the right-atch of services to effectively
address the plan member's individualized problems, while respecting
the member's preferences, is the purpose of 'medically necessary'
crateesa.
To accomplish this end, this paper suggests a different approach to
defining medically necessary services-one more consistent with the
law. In place of broad but short stipulations requiring plans to ensure
that services adhere to professional standards, are safe and effective and
emphasize less costly alternatives (as the typical contract definition does
today), states could incorporate more of the essential values and directions
they desire from their mental health service system. The section of
the contract that deals with when a service is medically necessary should
then stipulate.
* the desired goal of services (e.g., to promote recovery);
* the range of services that are to be considered 'medically' necessary
(e-g-. rehabilitation as well as clinical treatment);
* principles for service delivery (e.g., members should be fully engaged
in services planning and be given choices); and
* that plans are prohibited from subverting desired goals through arbitrary
restririons on amount, duration and scope of services.
The definition of medically necessary services should also include
standards for the process of making these determinations. Further, a System
of member appeals should be linked to the definition. Standards for
Defining 'Medically Necessary' Services to Protect Plan Members
POLICY ANALYSIS BY THE BAZELON CENTER FOR MENTAL HEALTH LAW 1.-