Article Abstract Online ISSN: 1099-176X    Print ISSN: 1091-4358 The Journal of Mental Health Policy and Economics Volume 5, Issue 4, 2002. Pages: 163-174 Published Online: 5 May 2003 Copyright © 2002 ICMPE.

*Correspondence to: Marilyn Daley, Senior Research Associate, Schneider Institute for Health Policy, Brandeis University, Mail Stop 035, P.O. Box 9110, 415 South Street, Waltham, MA 02454-9110, USA.                                                        
Tel.:  +1-781-736-3906
Fax:  +1-781-736-3928
E-mail: daley@brandeis.edu  

Source of Funding: National Institute for Alcohol Abuse and Alcoholism Grant #R01-AA-10880 to Brandeis University.

Abstract

Although Medicaid managed behavioral health care (MBHC) plans have generally reduced public sector spending, their impact on the quality of substance abuse (SA) treatment has not been established.  Analyzing Massachusetts Medicaid claims using multivariate regression, this study compared spending and quality from fiscal years 1992 thru 1996 (one year prior to and 4 years after the carve out was implemented) .  Per episode SA spending decreased by 76% (-$2,773); access to 24-hour services overall increased by 38%, largely due to an expansion in the use of freestanding detoxification and acute residential services.  Continuity improved by 73%.  Nevertheless, rates of 7-day (+58%) and 30-day (+24%) readmissions (two areas of quality concern) increased significantly, even after controlling for increases in disability status.  The carve-out had mixed effects on the quality of substance abuse treatment.  MBHCs should implement quality-monitoring programs to ensure that aggressive utilization management strategies do not compromise quality of care.

Background: In the US, the spiraling costs of substance abuse and mental health treatment caused many state Medicaid agencies to adopt managed behavioral health care (MBHC) plans during the 1990s.  Although research suggests that these plans have successfully reduced public sector spending, their impact on the quality of substance abuse treatment has not been established. Aims of the Study: The Massachusetts Medicaid program started a risk-sharing contract with MHMA, a private, for-profit specialty managed behavioral health care (MBHC) carve-out vendor on July 1, 1992.  This paper evaluates the carve-out’s impact on spending per inpatient episode and three proxy measures of quality:  (i) access to inpatient treatment (ii) 30-day re-admissions and (iii) continuity of care. Methods: Medicaid claims for inpatient treatment were collapsed into episodes. Clients were tracked across the five-year period and an interrupted time series design was used to compare the three quality outcomes and spending in the year prior to (FY1992) and the four years during MHMA (FY1993-FY1996). Logistic and linear regression models were used to control for race, disability status, age, gender and primary diagnosis. Results: Despite a 99% reduction in the use of hospital-based settings, access to 24-hour services overall increased by 38%, largely due to an expansion in the use of freestanding detoxification and acute residential services. Continuity improved by 73%. Nevertheless, rates of 7-day (58%) and 30-day (24%) readmission increased significantly, even after controlling for increases in disability status.  Per episode spending decreased by 76% ($2,773), characterized by a dramatic spending reduction in FY1993 that was maintained but not augmented in subsequent years. Discussion: The carve-out had mixed effects on the quality of substance abuse treatment.  While one of the three measures (readmission rates) deteriorated, two improved (access and continuity).  Implications for Health Care Provision and Use: Rapid re-admissions were strongly associated with shorter lengths of stay,  suggesting that strengthening discharge planning may preserve the benefits of MBHC while avoiding its risks. Implications for Health Policies: Since reductions in Medicaid spending were impressive but finite, MBHC may not be the permanent solution to inflation in behavioral health care. MBHC firms should implement quality-monitoring programs to ensure that aggressive utilization management strategies do not compromise quality of care. Implications for Further Research: The impact of managed behavioral health care should ideally be evaluated in randomized  controlled studies. In addition, research is needed to establish that the quality measures employed in this evaluation - improved access, enhanced continuity and fewer rapid re-admissions – actually correspond to reductions in drug or alcohol use and other favorable outcomes obtained through client self-report or urinalysis.

Received 26 September 2002; accepted 6 March 2003

Copyright © 2002 ICMPE