Why carve out? Determinants of behavioral health contracting choice among large U.S. employers

Behavioral Health Services in the Changing Landscape of Private Health Plans

OBJECTIVE

Health plans play a key role in facilitating improvements in population health and may engage in activities that have an impact on access, cost, and quality of behavioral health care. Although behavioral health care is becoming more integrated with general medical care, its delivery system has unique aspects. The study examined how health plans deliver and manage behavioral health care in the context of the Affordable Care Act (ACA) and the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA). This is a critical time to examine how health plans manage behavioral health care.

METHODS

A nationally representative survey of private health plans (weighted N=8,431 products; 89% response rate) was conducted in 2010 during the first year of MHPAEA, when plans were subject to the law but before final regulations, and just before the ACA went into effect. The survey addressed behavioral health coverage, cost-sharing, contracting arrangements, medical home innovations, support for technology, and financial incentives to improve behavioral health care.

RESULTS

Coverage for inpatient and outpatient behavioral health services was stable between 2003 and 2010. In 2010, health plans were more likely than in 2003 to manage behavioral health care through internal arrangements and to contract for other services. Medical home initiatives were common and almost always included behavioral health, but financial incentives did not. Some plans facilitated providers' use of technology to improve care delivery, but this was not the norm.

CONCLUSIONS

Health plans are key to mainstreaming and supporting delivery of high-quality behavioral health services. Since 2003, plans have made changes to support delivery of behavioral health services in the context of a rapidly changing environment.

Managed Behavioral Health Care Carve-Outs: Past Performance and Future Prospects

As the managed behavioral health care market has matured, behavioral health carve-outs have solved many problems facing the delivery of behavioral health services; at the same time, they have exacerbated existing difficulties or created new problems. Carve-outs developed to address rising inpatient behavioral health costs and limited insurance coverage. They are based on the economic principles of economies of specialization, economies of scale, price negotiation, and selection. Literature shows that carve-outs have been successful in lowering costs and maintaining or improving access, but results on their impact on quality of care are mixed. In recent years, carve-outs have evolved to take on new roles within the health system, such as coordinating mental and physical health, addressing fragmented public financing systems, and using market power to implement quality improvement. Although not perfect, carve-outs have been instrumental in addressing long-standing challenges in utilization, access, and cost of behavioral health care.

Effect of a mental health "carve-out" program on the continuity of antipsychotic therapy

BACKGROUND

On July 1, 1996, as a cost-containment strategy, Tennessee's expanded Medicaid program, TennCare, rapidly shifted the provision of mental health services to a fully capitated, specialty "carve-out" program, TennCare Partners. We studied the effect of this transition on the continuity of antipsychotic therapy among patients with severe mental illness who had previously adhered to treatment.

METHODS

Study patients were 21 to 64 years of age, were enrolled throughout the study period, and had adhered to antipsychotic therapy during a 6-month base-line period that preceded the 12 months of study follow-up. The study population included 4507 patients whose follow-up began on the day the change was implemented (the post-transition cohort) and 3644 patients whose follow-up began one year earlier (the pretransition cohort). We compared the two cohorts in terms of the loss of continuity of antipsychotic therapy (missed treatment for more than 60 days during follow-up) and the mean number of days of antipsychotic therapy during follow-up.

RESULTS

As compared with the pretransition cohort, the post-transition cohort had increased odds of loss of continuity (a multivariate odds ratio of 1.18 [95 percent confidence interval, 1.07 to 1.30], P=0.001) and a shorter mean duration of antipsychotic therapy (a mean reduction of 4.2 days [95 percent confidence interval, 1.7 to 6.7], P=0.001) during follow-up. This difference was most pronounced among high-risk patients (those requiring the administration of extended-release [depot] injections of antipsychotic medications or who had been hospitalized for psychosis) at base line, for whom continuity was most important (odds ratio for loss of continuity, 1.79 [95 percent confidence interval, 1.45 to 2.22]; P<0.001; mean reduction in the number of days of antipsychotic therapy, 14.4 days [95 percent confidence interval, 9.4 to 19.4]; P<0.001). These patients had decreased use of antipsychotic drugs immediately after the transition; the lower level persisted throughout the 12 months of follow-up.

CONCLUSIONS

These findings underscore the need to ensure that shifts to widely used carve-out programs, which are designed primarily to contain costs, do not adversely affect clinical outcomes.

Organizational and financial issues in the delivery of substance abuse treatment services

Examination of organizational and financial characteristics of the specialty substance abuse treatment system allows an understanding of how to meet the needs of clients in the system. Further, this assessment may afford insights into how the specialty sector may adapt in the changing environment of managed care. Data from Phase I of the Alcohol and Drug Services Study (ADSS) describe the specialty substance abuse treatment system in terms of type of care, setting, level of affiliation, licensure/accreditation, ownership, revenue sources, client referral sources, client's primary substance of abuse, and managed care. Although the system is largely outpatient and remains substantially two tiered in terms of public/private funding mix, it varies along a number of organizational and financial dimensions which have implications for system structure and facility viability in the changing environment of substance abuse treatment service delivery.

Effects of managed care on programs and practices for the treatment of alcohol and drug dependence

Managed care is affecting the organization and financing of treatment services for alcohol and drug dependence. This paper examines the effects of managed care on program operations including the use of clinical protocols, the administrative burden, information systems, staffing, and program consolidation. It also reviews the effects of managed care on system performance related to employer-sponsored health plans, state employee health plans, and Medicaid and other public plans. Our review of managed care's influences on the alcohol and drug abuse treatment system finds evidence of systemic reductions in access to inpatient care and increased reliance on outpatient services. Moreover, although analyses of behavioral health carve-outs often suggest increases in the use of outpatient care, evaluations of substance abuse claims report reductions in ambulatory utilization for the treatment of alcohol and drug dependence.

Financing of substance abuse treatment services

The financing of treatment for substance abuse problems has differed from the rest of financing of health care in part because of the dominant role of the public sector as the payer of services. Nonetheless, the rise of managed care has affected substance abuse treatment services as well as the rest of the health care system. Alternative payment mechanisms are one important component of some managed care approaches. Behavioral health carve-outs are another managed care development that has affected substance abuse services. In this chapter, salient features of financing for substance abuse treatment are reviewed within the conceptual framework of payers (purchasers and intermediaries), providers, and consumers. Existing literature on substance abuse treatment financing is summarized, while recognizing that much remains to be researched.

Selecting data sources for substance abuse services research

In this article we discuss the strengths and weaknesses of using different types of data sources for alcohol and drug abuse services research. To do this, we describe four types of data sources used in substance abuse services research: surveys of organizations, medical records, claim and encounter data and program-level administrative data. For each, we outline where to obtain data, how each type has been used, and the advantages and challenges. This overview should allow investigators to think more critically about the datasets they now use; providers to understand the types of data sources most appropriate for specific research questions so as to participate more fully in research; and policy makers to interpret correctly results based on different types of data. Moreover, it should foster better communication among these stakeholders in collaborative projects to improve the effectiveness of services for people with addictions.