MHW: NCD Urges Managed Care Reform For BH, Other Disabilities

Report Urges Managed Care Reform For BH, Other Disabilities

Mental Health Weekly March 25, 2013

As a growing number of states are offering behavioral healthcare and other services through managed care plans, the design and implementation should be informed with the input of stakeholders, providers and disability experts, according to a new report released March 18 by the National Council on Disability (NCD). The report noted that more than half of states are planning to increase the number of Medicaid beneficiaries enrolled in managed care plans.

In the report, “Medicaid Managed Care for People with Disabilities: Policy and Implementation Considerations for State and Federal Policymakers,” the NCD outlines 22 principles to guide the design and implementation of managed care services for people with disabilities.

The NCD also recommends that the Centers for Medicare & Medicaid Services (CMS) create and circulate a comprehensive, easy-to-understand procedure spelling out the process for determining state demonstration waiver requests that seek to link Medicaid managed long-term services and supports (LTSS).

The report notes that, currently, more than two-thirds of the 70 million Medicaid beneficiaries receive at least a portion of their services through a managed care plan. “A growing number of states are providing long-term services and supports through managed long-term services and supports,” said Jeff Rosen, NCD chairperson. “If implemented wisely, as intended, these changes can expand home and community services, increase inclusion, ensure quality and improve efficiency. If done poorly, decades of progress could be lost.”

Faced with growing caseloads, declining federal aid and escalating healthcare costs, many states are electing to enroll high-cost people with chronic disabilities in Medicaid managed healthcare and long-term service plans, according to the report. They are doing so in an attempt to place program expenditures on a more sustainable course, while simultaneously improving the quality and accessibility of services.

According to the NCD, a separate, state-by-state survey found that 17 states in 2011 and 24 states in 2012 intended to expand the geographic areas and populations served by managed care programs. States also reported that they are expanding disease and care management programs, as well as patient centered medical home initiatives to improve coordination of care and increase the focus on high-need, high-cost Medicaid recipients.

Behavioral health needs

Behavioral health needs are particularly pervasive among Medicaid enrollees who qualify on the basis of disability. One study found that 47 percent of Medicaid-only enrollees with a qualifying disability also were diagnosed with bipolar disorder, psychosis, depression or another form of mental illness.

Additionally, Medicaid claims data revealed that 29 percent of such beneficiaries were treated for a mental illness and another 18 percent had used a prescription medication to address a behavioral disorder, suggesting unmet mental health treatment needs among the latter group.

According to the study, co-occurring conditions - especially mental illnesses - are a major contributing factor to the cost of serving Medicaid beneficiaries with disability-based eligibility. The presence of a mental illness also adds to the complexity of the treatment process because coordinating the full spectrum of the individuals’ care and support and controlling expenditures across multiple treatments and care settings pose a challenge.

Adherence to treatment regimens is often difficult to achieve in this population, the study stated. When such people also struggle with a substance use disorder, the complexities involved in delivering services and supports escalate even further.

The NCD cited research that found that approximately two-thirds of Medicaid-only beneficiaries with disabilities and one or more of the five most common physical conditions also had a mental illness. In addition, 20 percent of such individuals had both a mental illness and an alcohol or other drug use disorder.

For those with the most common chronic physical health conditions, healthcare spending is 60 to 75 percent higher for those with a mental illness than for those without one. The addition of a substance use disorder doubles or triples healthcare spending, depending on the conditions involved.


Among its recommendations, the NCD report suggests:

• The provider network of each MCO should be sufficiently robust and diverse to meet the healthcare, behavioral health and, where applicable, long-term support needs of all enrollees with disabilities. When a state plans to cover LTSS as part of its managed care initiative, its network must encompass both providers of institutional and home and community-based (HCB) services.

• Disability policy experts -both within and outside of state government - should be involved in designing and implementing Medicaid managed care plans involving beneficiaries with disabilities, especially when LTSS are covered under the plan.

• States planning to enroll Medicaid beneficiaries in managed long-term services should carefully analyze the diverse support needs among people targeted for enrollment and require managed care organizations (MCOs) to include skilled providers of such services and supports within their respective provider networks.

• Enrollees in Medicaid managed healthcare and longterm support plans should have access to conflict-free service coordination (case management) to assist them in navigating their way through the intake, assessment, service planning, provider selection and service monitoring processes. •

For the report, “Medicaid Managed Care for People with Disabilities: Policy and Implementation Considerations for State and Federal Policymakers,” visit