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– Stephen B. Moss, Ph.D., Manager, Substance Abuse Treatment Services, MHMA, Inc. (known nationally as First Mental Health, Inc.)

State alcohol and other drug (AOD) authorities find themselves in the midst of revolutionary changes now occurring in the health care and AOD fields. Regardless of the eventual outcome of national health care reform efforts, States are enacting legislation that is rapidly transforming the service delivery landscape. Over 30 States are in the process of legislating some form of health care reform, and most of these include the delivery of AOD treatment services with some form of managed care at the core.

The impact of a managed care system is substantial for treatment providers, recipients of service, and State AOD authorities. Every State in the country has a unique set of circumstances that must be carefully considered when exploring the use of managed care in a public system of care. These include the current status of the substance abuse treatment system and that system's relationship with other State agencies, current health care reform efforts, Medicaid involvement in managed care, political factors, geographic and population characteristics, and available funding. Each State will need to carefully evaluate its overall situation, the fundamental goals for its system, and the potential role of managed care technologies.

The Massachusetts managed care experience offers a wealth of knowledge upon which to build. Massachusetts was the first State to implement a comprehensive, statewide, managed care program for delivering behavioral health (substance abuse and mental health) services to Medicaid recipients. Many regard this initiative as the Nation's most comprehensive managed behavioral health program for the poor and disabled and as a prototypical model for State and Federal health care reform efforts. As States struggle to develop and implement reforms that best address their unique needs, they can clearly benefit from understanding the Massachusetts experience.

One important lesson has to do with benefit limits. Current debates within the health care reform movement often focus on whether or not we need to impose arbitrary limits on the amount, duration, or type of service available to contain overall costs. In the Massachusetts Medicaid plan, treatment is based on clinical need and is not arbitrarily limited. The current Massachusetts experience – successfully managing the treatment of nearly 1/2 million Medicaid and unemployed individuals without any such arbitrary limits – provides strong evidence that such restrictions are unnecessary, clinically unsound, and a hindrance to cost-effective care.

Background

In the late 1980s, mental health and AOD treatment costs were growing at a rate of over 20 percent a year– the fastest growing component of the Massachusetts Medicaid system. The system was virtually unmanaged and there were extensive systemwide problems with both quality and access. In response, the State legislature mandated that the Medicaid system incorporate managed care to rein in costs and avoid the necessity of slashing benefits.

An early and pivotal decision was whether or not to " carve out " mental health and AOD services from other medical services. After receiving a waiver from the Health Care Financing Administration (HCFA) in 1991, the State's Medicaid program (now the Division of Medical Assistance [DMA]) began to implement a system where most of its recipients would receive their managed care in one of two fundamental ways:

• In the " HMO Program, " recipients could choose to receive all their medical and behavioral health care from one of several health maintenance organizations (HMOs) in the State.

• In the Mental Health/Substance Abuse Program (MH/SAP), recipients could choose to receive their medical care through a Primary Care Clinician (PCC) system with mental health and AOD services offered through a managed behavioral health care company.

Recipients who did not make a choice were assigned to the MH/SAP. In practice, about 80 percent of the Medicaid recipients enrolled in the MH/SAP.

The MHMA Contract

DMA established a fully capitated contract with MHMA in January 1992 to develop and operate the MH/SAP. Two separate capitation rates Cone for those receiving SSI and one for those receiving AFDC or other benefitsC were used to establish the overall capitation rate DMA paid MHMA. Currently, MHMA manages the care of about 320,000 recipients of Aid to Families with Dependent Children (AFDC) and other categories of assistance, and about 50,000 recipients of Supplemental Security Income (SSI). Additionally, the plan manages the 24-hour treatment needs of nearly 100,000 individuals receiving State unemployment benefits.

MHMA hired local professionals and began operations in July 1992. The management staff were well-regarded and respected local professionals. Their knowledge of the local human service system, preexisting professional relationships, and implicit personal incentives to maintain a good reputation have been important elements in making the program work successfully. The initial analysis of DMA 's purchase of AOD treatment indicated:

• Substantial overutilization of expensive hospital settings for inpatient detoxification and treatment

• Underutilization of the preexisting system of publicly funded free- standing detoxification programs

• An incomplete and fragmented continuum of AOD services

• An absence of ongoing, community- based community support and case management services

• Little capacity to profile treatment programs or to manage the cost, access, or quality of AOD treatment

• A lack of clinical oversight of or accountability for individual cases

Building the Network

MHMA built a statewide network of providers by contracting with a broad range of public and private agencies to create a comprehensive continuum of mental health and AOD treatment services. Recipients are assessed and access treatment directly at the treatment sites. For the delivery of AOD treatment services, MHMA purchased several levels of care by contracting with:

• Level IV: Nine hospital-based, medically managed detoxification programs that were selected from about 25 programs in the State

• Level III: The preexisting network of 20 freestanding, medically monitored detoxification programs

• Outpatient (drug-free): Nearly all of the preexisting outpatient AOD treatment clinics

• Methadone treatment: All the State ' s methadone and acupuncture treatment clinics

MHMA also developed two levels of care not previously available to Medicaid recipients. These included:

• Short-Term Addiction Residential Treatment (START): This acute rehabilitative level of care is generally provided for 2 weeks or less. About 1/3 of detoxified patients are now successfully transferred to these 24-hour clinically intensive rehabilitative programs.

• Structured Outpatient Addiction Programs (SOAPs) (Level II): 20 SOAPs have been established around the State in a variety of clinical settings. Designed as both a " step down " after detoxification and as a program for direct admissions, recipients may attend one or two half-day units a day for up to 6 or 7 days a week. Frequency and intensity of care are determined by providers, with the duration of care usually lasting from 1 to 4 weeks. Outpatient detoxification capabilities will soon be added to this level of care.

HCFA Evaluation

To receive an extension on their 2-year HCFA waiver, Medicaid was required to contract with an independent evaluation team to assess whether the program had reduced costs without significantly reducing enrollee access to services or quality of care. The box on page 26 shows the major conclusions of this study, done by the Heller School at Brandeis University, which covered the first year of program operations.

Cost Impact

DMA had projected that Fiscal Year 1993 spending for behavioral health services would be about $210 million, based on the 20 percent annual growth rate (from $124 to $186 million) that occurred between 1990 and 1992. From July 1992 through June 1993, the MHMA managed care efforts held actual expenditures for both mental health and AOD treatment to $163 million (including administrative costs), an estimated savings of $47 million and 22 percent less than projected expenditures.

The annual cost for treatment of AOD problems was cut dramatically, with the cost per enrollee dropping from $82 to $42 per year. About 2/3 of these savings came from diverting admissions from Level IV hospital-based detoxification programs to Level III freestanding detoxification programs and to the newly established short-term residential programs (see chart 1). Outpatient costs for treatment of AOD disorders increased 8 percent, largely as a result of increased utilization of methadone services.

Access

Access to services is a key variable in determining the impact of any capitated system. A fundamental measure of access is the number of unduplicated users of a particular service or group of services per 1,000 enrollees per year. (See chart 2.) Overall, the number of enrollees who utilize the AOD treatment services increased by 11 percent.

• Level IV hospital detoxification admissions dropped dramatically with a consequent increase in Level III admissions.

• Short-term addiction residential treatment, previously unavailable, was utilized by about 1/3 of individuals discharged from Level IV or Level III detoxification programs.

• Outpatient drug-free treatment access dropped slightly while use of methadone treatment increased by 20 percent.

Utilization Differences: Recipients of AFDC/Other Benefits and SSI

As expected, the first year' s experience showed substantial differences in utilization between the recipients of AFDC or other benefits and the recipients of Supplemental Security Income (SSI) benefits. For example, SSI recipients utilized Level IV treatment eight times more frequently than the AFDC/other group (see box below).

Shortcomings

According to the Brandeis report, providers ' main criticisms of MHMA revolved around administrative problems. They reported overly bureaucratic administrative procedures, difficulties reaching staff by phone, and excessive paperwork demands. The combination of these factors resulted in the need for many providers to increase administrative staffing.

Despite these criticisms, most providers suggested that only incremental changes were needed to improve the overall management of AOD treatment services. These included:

• Permitting longer lengths of stay for clients with severe problems

• Allowing greater flexibility regarding admissions to Level IV treatment

• Continuing system development to fill service gaps

• Developing more efficient utilization review procedures.

Finally, in assessing the limits of its evaluation, the Brandeis team proposed that knowledge about the impact of the MH/SAP could be expanded by developing outcome studies, measuring client satisfaction, doing a follow-up study of the longer-range impacts on the provider network, and providing medical audits to assess care of individuals.

New Initiatives

Since the Brandeis report was published, DMA has renewed MHMA 's contract for 2 more years and several new initiatives have been implemented. These include:

• Intensive Clinical Management Program (ICM) – This program closely manages and facilitates the care of individuals with complex treatment needs. Appropriate recipients are identified in a number of ways, including high rates of readmission to inpatient settings, high treatment costs, high clinical risk, provider referral, and MHMA staff referral. A majority are " dually diagnosed, " suffering from coexisting AOD and mental health problems. ICM clinicians have wide latitude in devising creative treatment plans to best meet the unique treatment needs of individuals in this program.

• Community Support (CS)– CS service teams provide ongoing community-based advocacy, outreach, and support. These teams, a component of the Intensive Clinical Management program, assist specified individuals in achieving treatment goals and greater stability.

• Pregnancy Enhanced Programs – MHMA has assumed management from Medicaid of specialized detoxification, day treatment, and intensive outpatient programs for pregnant, addicted women. These programs are designed to identify women with AOD problems earlier in their pregnancies, increase the number of pregnant women accessing treatment, and assist these women to receive the specialized treatment and support services they require. Birth outcomes will be one of several outcome measures developed.

Program Profiling

Profiling the performance of providers is increasingly being used as a manage- ment tool in managed care systems. MHMA is now developing " Program Profiles " to share with providers; these provide a range of clinically relevant, quantitative feedback to programs. These profiles will be used as a tool to help MHMA and providers work together to better understand the impact of treatment processes and to improve treatment outcomes. Future profiles will increasingly incorporate case mix methodologies. Main components of the profiles, with regional and State norms, include:

1. Readmission rates to different 24-hour levels of care

2. Continuing care rates describing program success at triaging clients to the next appropriate level of care

3. Premature discharge rates (2 days)

4. Psychiatric comorbidity rates of clients served

5. Length of stay profiles

6. Quantified analyses of documentation and staffing practices.

7. Profiling of methadone treatment has also been implemented by analyzing the counseling intensity of the methadone treatment programs. As a future development, we hope to compare this data with an outcome tool jointly developed by MHMA, the State AOD authority (the Bureau of Substance Abuse Services), and methadone treatment providers. This tool systematically measures current opiate use, current drug use, rates of injection use, HIV high-risk behaviors, and utilization of health care. Now being piloted, the instrument shows promise as an outcome measure that can be integrated into regular programming.

Future Trends

This Massachusetts managed care initiative continues to evolve rapidly. Collaboration in system development continues to increase between MHMA, the State AOD authority, other purchasers of care, and providers. Data is increasingly used to guide and inform development. Providers have more and more autonomy in clinical decision making with decreasing " micromanagement " by MHMA. Administrative efficiencies and computerization are occurring at all levels. Continuous quality improvement methodologies are being increasingly utilized and incorporated. Outcome measures, dual diagnosis development, reimbursement options, and stronger multi-service treatment campuses loom on the horizon.

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