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Special Report: Annotated Bibliography for
Managed Behavioral Health Care 1989-1999
Benefit and System Design
1. Abrams, H. S. (1993). Harvard Community Health Plan’s mental health
redesign project: A managerial and clinical partnership. Psychiatric
Quarterly, 64, 13-31.
The Harvard Community Health Plan (HCHP) redesigned its program in an effort to address
high costs and member and clinician dissatisfaction in the delivery of its mental health services.
In an extensive needs assessment, members, clinicians, and managers identified a number of prob-lems
in the HCHP mental health care delivery system. These included lack of access, inconsistent
service delivery between sites, lack of systematic utilization management, and lack of diverse
treatment programs and models. On the basis of this assessment, HCHP developed a method of
categorizing patients, restructuring the delivery system, and redesigning the mental health benefit.
This article describes the process and politics of the redesign effort, including the development of
the mental health patient-assessment tool. Also outlined are delivery system changes, such as self-referral
and group therapy, and how HCHP communicated its new benefits to members.
Keywords: private sector programs
2. Afield, W. E. (1990). Managed mental health care: Curbing costs in the
1990s. Medical Interface, 14, 26-34.
Expenditures on mental health account for almost one-third of total health care dollars spent
in this country. This article documents ways in which the insurance industry has led to inap-propriate
and costly use of mental health benefits. The article endorses managed mental health
care (including utilization control and quality assurance) as a solution to both the quality and
cost problems plaguing the current system.
Keywords: costs, quality assurance
3. Altman, L., & Price, W. (1993). Alcan Aluminum: Development of a mental
health "carve-out." New Directions for Mental Health Services, 59, 55-65.
A growing number of companies are interested in "carving out" mental health services. This
chapter describes the development and implementation of a carve-out plan at the Alcan Alum-inum
Corporation. Alcan designed its network-based employee assistance program (EAP) and
managed mental health program to reduce costs, standardize its EAPs across the Nation, and
enhance the quality of services. Other objectives included enhanced case management for ado-lescents
and increased access for employees in rural areas. The article describes lessons learned,
such as building consensus and creating links among vendors, administrators, and employees.
Keywords: carve-outs, EAPs, private sector programs
4. Arons, B. S., Frank, R. G., Goldman, H. H., McGuire, T. G., & Stephens, S.
(1994). Mental health and substance abuse coverage under health reform.
Health Affairs, 13(1), 192-205.
This article, written by several members of the President’s Task Force on Health Care Reform,
the Working Group on Mental Health, describes the basis for President Clinton’s health care
reform proposal in which mental health/substance abuse care is integrated with the proposed
health alliances. The authors examine the organizational and financing needs of mental health
and substance abuse to ensure a successful transition to a fully integrated system at parity with
other health services. The article makes a case for full integration, describes the complexity of
integration, and defines the financing, administrative, and monitoring steps necessary to imple-ment
an integrated plan. The authors examine some of the barriers to plan implementation,
and advise that, however problematic, they are not insurmountable obstacles to achieving a
fully integrated system before the year 2001. The authors also provide some thoughts on how
to assess whether the plan is proceeding on the right track during the transition.
Keywords: integration, legislation, parity, substance abuse
5. Bennett, M. J. (1994). Are competing psychotherapists manageable?
Managed Care Quarterly, 2(2), 36-42.
This article describes the major changes currently taking place in the way behavioral health
care is organized, financed, and delivered. The author argues that while much is uncertain,
there is wide commitment to two objectives: to improve access and increase efficiency. Meeting
both objectives requires improved coordination of resources on a wide basis and a movement
beyond utilization review. The article challenges the notion that market forces alone can over-come
the barriers to reform and outlines a detailed five-step strategic plan. The strategies
include guaranteeing the right to necessary care, regionalizing resources under capped budgets,
replacing fee-for-service reimbursement with prospective payment, aligning continuing educa-tion
requirements with performance-defined gaps in knowledge, and funding professional
retraining.
Keywords: overviews, providers, training, trends
6. Broskowski, A. (1991). Current mental health care environments:
Why managed care is necessary. Professional Psychology: Research
and Practice, 22 (1), 1-9.
As inpatient mental health costs have escalated rapidly in recent years, third-party payers and
employers have started to demand cost and quality controls on the care provided. This article
describes the trends in general and mental health care costs and describes a framework for
understanding the structure of managed mental health care. The author illustrates methods for
managing mental health costs and examines the evaluation of the impact of managed care on
cost and quality of care.
Keywords: costs, overviews, trends
7. Broskowski, A. (1994). Current mental health care environments:
Why managed care is necessary. In R. L. Lowman & R. J. Resnick (Eds.),
The mental health professional’s guide to managed care (pp. 1-18).
Washington, DC: American Psychological Association.
An earlier version of this chapter appeared in Professional Psychology: Research and Practice.
Refer to Broskowski, 1991 for annotation.
8. Burton, W. N., & Conti, D. J. (1991). Value-managed mental health
benefits. Journal of Occupational Medicine, 33, 311-313.
This article describes the experience of the First National Bank of Chicago’s comprehensive
plan for mental health services. It contends that by managing a benefit plan assertively rather
than cutting it, the quality of mental health services can be enhanced while costs are contained.
The plan is based on an employee assistance program (EAP) that provides assessment, short-term
counseling and referrals, psychiatric hospital utilization review, and consulting psychia-trists.
An internal evaluation of the program showed declines in the number of admissions, the
length of stays, and the costs of inpatient mental health.
Keywords: EAPs, evaluation, private sector programs
9. Busch, S. (1997). Carving-out mental health benefits to Medicaid
beneficiaries: A shift toward managed care. Administration and Policy in
Mental Health, 24(4), 301-321.
Since 1991, a number of states have initiated mental health carve-out programs for at least
some of their Medicaid population, providing mental health services through a separate pro-gram
from physical health care. This paper outlines the choices States face in designing such
programs including cost considerations, political considerations, the procurement process,
reimbursement, eligibility, risk adjustment, and benefit design. The author relies on examples
from Massachusetts and Utah to illustrate differences between public and private models.
From the discussion, the author concludes that while carve-out programs have yielded some
initial savings, future research needs to focus on their effect on quality of care and general
health care costs.
Keywords: carve-outs, Massachusetts, Medicaid, public sector, Utah
10. Dickey, B., & Azeni, H. (1992). Impact of managed care on mental health
services. Health Affairs, 11(3), 197-204.
This article describes the use of two types of managed mental health care programs designed to
reduce inappropriate use of hospital services and compares their impact on the use of inpatient
services. Each of these programs represents a type of utilization review. The first is a mandato-ry
preadmission screening program that requires certification, prior to or within 24 hours of it,
that the admission is medically necessary; the program also authorizes a set number of reim-bursable
days. The second program focuses on discharge planning and requires attending
physicians to detail treatment plans as they relate to discharge. Thus, the first program attempts to reduce the numbers of admissions, while the second focuses on reducing length of
stay. Neither program was shown to be effective in reducing mental health spending. The
authors hypothesize several reasons for this, including the increase in pressures that drive up
the supply of and demand for mental health services, the growth of new psychiatric inpatient
programs, and physician noncompliance with reviews. The authors conclude with a discussion
of the limitations of the study and future research needs.
Keywords: evaluation, utilization management
11. Duhl, L. J. (1994). Can mental illness be prevented under managed
care? Managed Care Quarterly, 2(2), 7-9.
The author argues that the movement toward managed mental health care focuses narrowly on
intervention techniques and cost containment. These foci are inappropriate and will not lead to
an overall improvement in mental health for the majority of people who need and seek mental
health care. A more appropriate system would recognize the importance of the social and cul-tural
context of individual lives and their social networks. From the author’s perspective, a
program that moves beyond the medical model and recognizes the importance of jobs, recre-ation,
and education is more likely to have a positive impact on the mental health of individu-als
in a community than would the managed care approach.
Keyword: prevention
12. Durham, M. L. (1994). Health care’s greatest challenge: Providing
services for people with severe mental illness in managed care.
Behavioral Sciences and the Law, 12(4), 331-439.
This article discusses the fundamental advantages of managed care for persons with severe
mental illness (SMI) and examines how this patient population is treated in actual practice.
Specifically, the author analyzes the advantages and the actual practice data for this population
for three primary aspects of managed care: institutional care, coordination of care, and preven-tion.
Regarding these three principles of managed care, the author notes that SMI individuals
do not receive the best care possible, and the author offers solutions on how to best improve
care for these individuals within a managed care framework. Some of the solutions which are
suggested solely for the SMI population include specialized HMOs, training and support for
primary care physicians to better diagnose and refer individuals with SMI to the appropriate
treatment, financing schemes that decrease the copayments for SMI individuals, developing risk
assessment models specifically for the SMI populations, and developing clearer ethical guide-lines
for treating SMI patients.
Keywords: serious mental illness
13. England, M. J., & Goff, V. V. (1993). Health reform and organized
systems of care. New Directions for Mental Health Services, 59, 5-12.
Several major companies are using organized systems of care (OSC), an integrated care
financing and delivery system. The authors argue that organized systems of mental health and substance abuse care can achieve both cost management and quality improvement through
the use of a select multidisciplinary panel of providers and the delivery of a continuum of
services from prevention and primary care through chronic care. The chapter provides two
examples of the development of OSCs. Finally, the chapter describes how OSCs are different
from current managed care systems.
Keyword: integration
14. England, M. J., & Vaccaro, V. A. (1991). New systems to manage
mental health care. Health Affairs, 10 (4), 130-137.
Early managed care arrangements focused primarily on reducing costs and only secondarily on
improving access or quality of care. This narrow focus contributed to the bitter opposition of
managed health care plans by clients and providers of mental health services. More recently,
managed mental health care organizations have demonstrated that managing care not only
reduces costs, but also potentially enhances early detection of mental health problems, offers a
broad range of services, provides continuity of care, reduces the costs shifted to individuals,
and prevents unnecessary hospitalization. The authors argue that managed care systems will
increasingly be required to demonstrate their quality of services provided in order to success-fully
compete for contracts with businesses. This article describes six case studies of businesses
that have introduced managed systems of care for their employees.
Keywords: private sector programs
15. Feldman, S. (Ed.). (1992). Managed mental health services (1st ed.).
Springfield, IL: Charles C. Thomas.
This book was written by those involved in or connected to the managed mental health sys-tem:
as payors, providers, managers, health-benefit consultants, human resources and employ-ee
assistance program (EAP) staff, researchers and teachers, and public and private policymak-ers.
The book’s wide range of topics includes the genesis of managed mental health and its
application to particular settings. Several viewpoints are represented, including those of corpo-rations,
of the purchasers of health care, and of the freestanding managed mental health firms.
One chapter describes the basics of a mental health evaluation system; another addresses the
special quality assurance needs that managed mental health firms have. Finally, the book rais-es,
in separate chapters, clinical, ethical, and legal issues.
Keywords: ethics, managed behavioral health care organizations, overviews, perform-ance
measurement, quality assurance
16. Feldman, S. (1998). Behavioral health services: Carved out and
managed. The American Journal of Managed Care, 4, SP59-SP67.
Mental health and physical health have maintained the same relationship for the past 200
years—separate. The managed behavioral health carve-out (MBHCO) is the most current
demonstration of this separation, as it involves the same managed care philosophy that has
revamped the physical health industry, but it is not integrated with the physical health care HMOs. This article examines the financial incentives that led to the development of the
MBHCO as well as their common characteristics. The author illustrates such typical compo-nents
of an MBHCO as contracts, payment mechanisms, and provider networks and data col-lection,
through the example of United Behavioral Health. He also highlights available research
on the effects of the MBHCO on cost and utilization, access, quality, and the relationship of
behavioral health services to physical health care and other human services. The author also
argues for further research in order to evaluate the qualitative aspects of care.
Keywords: carve-outs, managed behavioral health care organizations
17. Fishel, L., Janzen, C., Bemak, F., Ryan, M., & McIntyre, F. (1993).
A preliminary study of recidivism under managed mental health care.
Hospital and Community Psychiatry, 44, 919-920.
This brief article reports on a study to determine the recidivism rates for mental health services
provided through HMOs, case-managed programs, and fee-for-service insurance plans. In the
article, recidivism rates are considered a proxy for quality of service. The records of all persons
(N=365) who were referred by an employee assistance program within a 24-month period
were examined. Those who made a second request for service at least three months after the
initial visit but still within the 24-month study period were considered "recidivists." The study
found a higher rate of recidivism in the managed care programs than in the fee-for-service
plans. Limitations of this study are discussed, as are implications for future research.
Keywords: HMOs, performance measurement
18. Fisher, L., & Ransom, D. C. (1997). Developing a strategy for managing
behavioral health care within the context of primary care. Archives of
Family Medicine 6, 324-333.
The authors report on findings of a review of the literature from 1970 to 1996 on factors that
predict the use of mental health and substance abuse services. The literature review was con-ducted
as a means to guide the development of behavioral heath care programs that are com-patible
with the primary care environment. The authors develop a framework to represent the
main factors associated with mental health services use. They describe each of the domains and
summarize the essential research findings. The domains include patient characteristics, primary
care physician characteristics, practice settings, and managed care plan characteristics. Based
on the findings from the literature review, the authors argue that behavioral health programs
work best when they are decentralized to account for variations among primary care patients,
physicians, and practices; when they are integrated clinically, financially, and administratively
within the primary care setting; and when primary care physicians are active leaders in the
design and implementation of these services.
Keywords: integration, primary care
19. Fitzpatrick, R. (1992). The Harvard Community Health Plan: An evolving
model of managed mental health care. In J. Feldman & R. J. Fitzpatrick
(Eds.), Managed mental health care: Administrative and clinical issues
(1st ed., pp. 385-399). Washington, DC: American Psychiatric Press.
This chapter describes how the Harvard Community Health Plan (HCHP) reassessed the
assumptions, scope, and benefits of their psychiatric and substance abuse services. The 5-year
process led to a series of evaluative conclusions on what was and was not working in the men-tal
health program, as well as a set of guiding principles for change, a mission statement, and
new treatment modalities. The chapter describes the way in which this process was implement-ed,
some of the findings, and the ways in which the HCHP has begun to implement some of
the new clinical, educational, and management programs. It also describes the way in which
the HCHP continues to evaluate the relative success of treatment options through clinical algo-rithms.
Reports show increased patient and provider satisfaction as well as decreases in the
number of hospital admissions and the length of stay.
Keywords: performance measurement, private sector programs
20. Frank, R. G., Goldman, H. H., & McGuire, T. G. (1992). A model mental
health benefit in private health insurance. Health Affairs, 11(3), 98-117.
Mental health benefits in public and private insurance vary widely, from no coverage at all to a
wide range of benefits. Many mental health care benefits packages provide incentives for inap-propriate
types and amounts of treatment. In response to a Congressional request to the
National Institute of Mental Health (NIMH), the authors designed a model mental health ben-efit
for the working population. Through both supply- and demand-side incentives, this plan
provides financial protection to both beneficiaries and their families, controls costs, and pro-motes
cost-effective care. This article describes five principles that underlie the model plan and
outlines the model benefit package itself. The article also proposes a payment system that is
consistent with the development of provider networks that form the basis of many managed
care programs. One goal of the model benefit is to draw national attention to the need to
include mental health care in proposals for national health reform.
Keywords: health care reform, models, private sector programs
21. Frank, R. G., McGuire, T. G., Bae, J. P., & Rupp, A. (1997). Solutions for
adverse selection in behavioral health care. Health Care Financing Review,
18(3), 109-122.
In this article the authors address the adverse selection and benefits for behavioral health care
in the managed care era. The adverse-selection argument presents evidence that health plans
offering "good coverage" for behavioral health benefits attract the bad-risk patients and there-fore,
behavioral health benefits must be mandated either by a public entity or through some
other means. Suggested solutions include risk adjustment of capitation rates, carve-outs, and
cost- or risk-sharing between the payer and the plan.
Keywords: capitation, carve-outs, economics
22. Frank, R. G., McGuire, T. G., & Newhouse, J. P. (1995). Risk contracts
in managed mental health care. Health Affairs, 14(3), 50-64.
This article examines potential implementation methods for mental health/substance abuse
managed care coverage. The authors make the case for risk contracting in behavioral health
care, describing the economics of risk contracting and its implications for the quality and cost-effectiveness
of mental health/substance abuse service delivery. They state that in order to effi-ciently
provide managed behavioral health services, it may be necessary to limit the choice con-sumers
have in behavioral health care plans. As a result, the authors conclude that if
behavioral health is to be covered by managed care, recipients will receive different types of
care depending upon their payers’ emphases on the costs versus the benefits of services.
Keywords: contracting, economics, substance abuse
23. Frank, R. G., McGuire, T. G., & Salkever, D. S. (1991). Benefit flexibility,
cost shifting and mandated mental health coverage. The Journal of Mental
Health Administration, 18, 264-271.
This article demonstrates an approach to evaluating a proposed change in mental health bene-fit
design that was used in the Commonwealth of Virginia. The authors designed a simulation
model to allow for an assessment of costs and utilization patterns associated with four poten-tial
design options for insurance benefits. After analyzing each option, the authors selected the
one they believed has the potential to achieve the greatest gains in the context of the existing
mental health mandate. The article describes the methods used for selecting each option, the
authors’ assumptions when making the evaluation, and the analysis of each option.
Keywords: private sector programs, Virginia
24. Goldman, H. H., Adler, D. A., Berland, J., Docherty, J., Dorwart, R. A.,
Ellison, J. M., Pajer, K., Siris, S., & Kapur, S. (1993). The case for a services-based
approach to payment for mental illness under national health care
reform. Hospital and Community Psychiatry, 44, 542-544.
In this position paper drafted by a committee of the Group for the Advancement of Psychiatry,
the authors describe the advantages and pitfalls of three approaches to achieve equitable cover-age
for the treatment of mental illness. The three strategies are achieving parity by diagnostic
status, by disability status, and by the set of services to be covered. After a comparative analy-sis
of the three approaches, the authors advocate the services-based approach. They believe
that a services-based approach is nondiscriminatory, and that costs can be controlled through
managed care and through changes in the payment system or benefit design.
Keywords: health care reform, parity
25. Goldman, W. (1994). Myths and potentials. Managed Care Quarterly,
2(2), 51-52.
This article describes two competing myths embodied in the health reform debate. The first
myth is that the current health care system allows freedom of choice and access to health care.
The second is that competing organized health care systems, given economic pressures for cost containment, will correct the current inequities in the health care system and lead to the same
goals (of freedom of choice and access to competent, compassionate practitioners). The author
of this viewpoint piece argues that both myths obscure reality. He puts forth his vision of how
the shared goals of both camps can be reached through managed mental health care.
Keywords: health care reform, overviews
26. Goran, M. J. (1992). Managed mental health and group health
insurance. In S. Feldman (Ed.), Managed mental health services
(1st ed., pp. 27-44). Springfield, IL: Charles C. Thomas.
This chapter provides an overview of the evolution of managed care and how it affects mental
health service delivery. Group health insurance organizations are expanding their efforts to
control costs through aggressive use of managed care. A number of large employers have deter-mined
that fee-for-service plans are not containing costs as well as managed care networks that
are similar to HMOs. Although most employers are reducing the number of options they offer,
they are not inclined to "lock" employees into one choice. The chapter describes the key fea-tures
of HMOs, preferred provider organizations (PPOs) and "carve-outs." Also discussed are
criteria for deciding whether to use an HMO or a conventional indemnity plan.
Keywords: carve-outs, HMOs, overviews, PPOs, private sector programs
27. Grazier, K. L., & Eselius, L. L. (1999). Mental health carve-outs:
Effects and implications. Medical Care Research and Review, 56
(Supplement 2), 37-59.
An increasing number of employers and states are carving out behavioral health services, sepa-rating
the provision of mental health and substance abuse services out from that of general
medical services. In this article, the authors examine various models for a carve-out and
describe the advantages and disadvantages of carve-outs as opposed to integrated models of
care. The paper summarizes recent public and private sector research on the impact of carve-outs
on access and utilization, cost savings and shifting, and quality of care. From this review
of previous research, the authors suggest that carve-out strategies may lead to increased access
to behavioral health services (particularly outpatient services) as well as to significant cost sav-ings
to sponsors through decreased inpatient utilization.
Keyword: carve-outs
28. Iglehart, J. K. (1996). Managed care and mental health. New England
Journal of Medicine, 334(2), 131-135.
The author provides a brief overview of the managed behavioral health care market, in which
he discusses operating techniques, quality of care, the views of mental health professionals,
and the movement toward Medicaid-managed care. This report highlights the trade-off
between the substantial savings achieved by managed care and the potential that these lower
cost treatments are adversely affecting the lives of the mentally ill, by focusing on the outcomes
of certain American corporations that have used managed behavioral health care services.
Keywords: economics, overviews
29. Judge David L. Bazelon Center for Mental Health Law & Legal Action
Center (1998). Partners in planning: Consumers’ role in contracting for
public-sector managed mental health and addiction services: Vol. 10.
Managed care technical assistance series. Rockville, MD: Substance
Abuse and Mental Health Services Administration.
As public-sector managed mental health care and substance abuse services increasingly enter
into managed care arrangements, consumer groups have a unique opportunity to become
involved in the formulation of contract policies. This guide is geared toward enabling con-sumers,
families, and advocates to identify and advocate for the most rewarding managed care
practices. The authors describe the intricacies of the contracting process, address the substance
and key provisions with respect to rights issues in a contract, identify critical issues with
respect to children and adolescents, suggest how consumer advocates can become involved,
and provide examples of good practices from current public managed care contracts. The
guide offers seven appendices including a glossary and a list of mental health and drug and
alcohol addiction organizations with state-based contacts.
Keywords: children, contracting, public sector, substance abuse, technical assistance
30. Kihlstrom, L. C. (1998). Managed care and medication compliance:
Implications for chronic depression. The Journal of Behavioral Health
Services & Research, 25(4), 367-376.
In an effort to better manage treatment compliance for chronically mentally ill patients, some
managed care organizations have initiated disease management (DM) programs for chronically
depressed individuals. By focusing on education, measuring patient outcomes when practice
guidelines are followed, and providing feedback to providers, DM programs claim to reduce
variations in care and to result in cost savings. This article examines the success of DM pro-grams
used by pharmaceutical benefit management firms (PBMs) in the management of pre-scription
drugs. The author provides a brief overview of the basic functions and attributes of
PBMs, including a description of their disease management practices. The article then presents
and critiques five different theories regarding the issue of treatment adherence as well as find-ings
from relevant studies in this area. Finally, the article discusses implications for behavioral
health services and directions for future research.
Keywords: depression, serious mental illness
31. Kunnes, R. (1992). Managed mental health: The insurer’s perspective.
In S. Feldman (Ed.), Managed mental health services (1st ed., pp. 101-126).
Springfield, IL: Charles C. Thomas.
Mental health costs have risen dramatically for a number of reasons: growing incidence of
mental health problems, "psychiatricization" of problems, expanding benefits for inpatient
psychiatric and substance abuse disorders, growth of inpatient chains and franchised vendors,
and more generous inpatient than outpatient coverage. Insurers have responded through the
use of reduced benefits, telephone utilization review and case management, claims manage-ment,
and preferred provider organizations (PPOs). The author argues that none of these approaches has reduced costs, and outlines an ideal system from an insurer’s perspective.
Such a system would emphasize alternatives to inpatient care and provide for individualized
treatment plans. The system would feature a sole entry point; effective triage; use of alternative
services; coordinated services and settings; and experienced, specialized providers.
Keyword: models
32. Lee, F. C. (1991). Managing mental health care. Benefits Quarterly, 7(4),
91-100.
This article discusses new developments in the $500-million-a-year managed mental health
care industry. Managed mental health vendors are having a major impact on reducing length
of stay in inpatient alcohol rehabilitation programs. Several initiatives are under way to devel-op
alternatives to inpatient care for adolescents, and to increase oversight of those admissions.
Managed mental health firms are also managing carve-outs of mental health benefits and
undertaking efforts to reduce worker’s compensation and disability claims. To address rising
mental health costs, corporations are using employee assistance programs, capitation, utiliza-tion
review, alternatives to inpatient care, and specialty carve-outs. The author also predicts
several trends in managed care, such as self-regulation and the increased use of technology.
Keywords: managed behavioral health organizations, private sector programs, trends
33. Levin, B. L., Glasser, J. H., & Jaffee, C. L. (1988). National trends in
coverage and utilization of mental health, alcohol, and substance abuse
services within managed health care systems. American Journal of Public
Health, 78, 1222-1223.
This study reports the results of a 1986 national survey of mental health, substance abuse, and
alcohol services within HMOs in the United States. Ninety-seven percent of HMOs surveyed
offered mental health service coverage and two-thirds of these offered alcohol and substance
abuse service coverage, an increase since the 1982 survey. Annual mean mental health hospital-ization
was 36.90 days per 1,000 members and annual mean ambulatory mental health utiliza-tion
was 0.29 physician encounters per member. Hospital and ambulatory costs for mental
health services nearly doubled since 1982.
Keywords: HMOs, substance abuse, trends
34. Lizanich-Aro, S., & Goldstein, L. (1988). A successful approach to the
start up of a mental health case management program. Quality Assurance
Utilization Review, 3(3), 90-94.
This paper describes how mental health professionals can design and implement a case man-agement
program. Quality assurance, which is based on the use of standards and normative
criteria for clinical decision making and review, is a key component of such a program. The
authors briefly outline examples of such criteria and their development, and discuss how to
design a peer-developed utilization review framework that fills in current gaps in mental
health review approaches. Using these criteria, reviewers should be better able to address a
number of case management questions, such as whether or not a treatment is appropriate.
Keywords: case management, quality assurance, utilization management
35. Lowman, R. L. (1994). Mental health claims experience: Analysis and
benefit redesign. In R. L. Lowman & R. J. Resnick (Eds.), The mental health
professional’s guide to managed care (pp. 119-136). Washington, DC:
American Psychological Association.
This chapter provides extensive mental health benefit analyses of corporate data, which
demonstrate cost problems and the financial effects of treating patients over time. The inten-tion
through these analyses is to assist psychologists in understanding the forces that promote
the growth of managed care. Four major issues are addressed: (1) national trends in health
care costs and in health service delivery; (2) comparable trends in mental health and substance
abuse treatment costs and service delivery; (3) the argument that managed care is a market-place
response to concerns on the part of employers and insurers; and (4) suggested opportu-nities
for cost-effective services in a competitive market.
Keywords: costs, economics, overviews, trends
36. Mahoney, J. J. (1988). Future trends and emerging issues in alternative
delivery systems: A purchaser’s perspective. In D. J. Scherl, J. T. English,
& S. S. Sharfstein (Eds.), Prospective payment and psychiatric care
(pp. 139-154). Washington, DC: American Psychiatric Association.
This article provides a historical overview of the business community’s growing role in provid-ing
employee health care. The author describes the search for alternatives to fee-for-service reim-bursement
and discusses advantages and shortcomings of HMOs and preferred provider organ-izations
for the business community. He concludes with a discussion of why managed care
holds great promise for the provision of quality and cost-effective mental health and sub-stance
abuse care.
Keywords: private sector programs, overviews, trends
37. Mayhugh, S. L., & Shueman, S. A. (1994). The development and
maintenance of provider networks. In S. A. Shueman, W. G. Troy, &
S. L. Mayhugh (Eds.), Managed behavioral health care: An industry
perspective (pp. 49-64). Springfield, IL: Charles C. Thomas.
This chapter describes the development, rationale, and maintenance of a provider network for a
managed behavioral health care program. The authors focus on recruitment and selection, net-work
monitoring, and improvement of provider performance. The authors conclude that only
through collaborative efforts between the industry and professional mental health training pro-grams
will providers acquire the skills and attitudes necessary in the managed care environment.
Keyword: providers
38. McGuire, T. G., & Fairbank, A. (1988). Patterns of mental health
utilization over time in a fee-for-service population. American Journal of
Public Health, 78, 134-136.
This study of Massachusetts Blue Shield beneficiaries’ ambulatory mental health use found
that almost 70 percent of the individuals who received services in 1980 also used mental health services in 1981 or 1982. These beneficiaries were also likely to have higher costs
for medical services, which then decreased when therapy was terminated. A comparison of
these findings with a similar multiyear study in an HMO revealed that patients were more
likely to continue ambulatory mental health care in a fee-for-service system than in an HMO,
but found no difference between the two settings in the likelihood of initiating ambulatory
mental health care.
Keyword: utilization
39. Mechanic, D. (1997). Approaches for coordinating primary and
specialty care for persons with mental illness. General Hospital Psychiatry,
19, 395-402.
In this era of increasing managed care penetration, primary care doctors are often the main
source of treatment for a person with a psychological disorder. This paper examines six
different models for integrating behavioral health with primary care in an effort to better
manage patients’ care: mainstreaming, the liaison psychiatry/collaboration model, new prac-titioner
models, independent carve-outs, functionally integrated carve-outs, and extended
care models. The author discusses the benefits and limitations of each model, noting that
certain models may be more successful with some patient populations and not as successful
with others. The author also identifies five barriers that often hamper primary care physicians
in managing psychological disorders. These are limited training in disorder diagnosis, lack
of time to deal with psychological issues, limited experience with psychiatric drugs, fear of
treating patients with psychiatric disorders, and difficulty getting patients to disclose symp-toms
of psychiatric disorders.
Keywords: integration, models, primary care
40. Mechanic, D. (1998). Emerging trends in mental health policy and
practice. Health Affairs, 17(6), 82-98.
This article presents an in-depth analysis of the issues surrounding managed care and mental
health services. The author describes current trends in the mental health care system that
provide a challenging context for the management of mental health services; these trends
include deinstitutionalization and the shift of patients into community care programs and
other residential facilities, parity of insurance coverage between mental and physical illness,
and integration between behavioral and general health services. Serious problems exist in
ensuring an appropriate range of services and programs for the seriously mentally ill residing
in community settings. The author argues for increased coordination between hospital and
community care and for the integration of hospital care into a more balanced system of
services. Managed care organizations do not have full responsibility for the future of mental
health services; these responsibilities are shared by purchasers, professionals, patient advo-cates,
and the government.
Keywords: integration, overviews, parity, serious mental illness, trends
41. Mechanic, D. (Ed.). (1998). New Directions for Mental Health Services, 78.
The purpose of this book is to more carefully describe the developing system of managed care
in order to guide its future design. A collection of authors helped to compose this sourcebook;
initially, they present the current context of managed care by looking at a variety of issues such
as utilization review and carve-outs. The second section concentrates on special issues such as
contracting and special needs populations. The third section presents case study analyses from
Utah, Colorado, and Massachusetts, all of which are states that have implemented Medicaid
behavioral health managed care programs. The final section highlights arguments made in the
prior sections and presents some observations about the future of managed care. Ultimately,
the editor of this book looks to present an analysis that balances the views of managed behav-ioral
health care critics and industry representatives. This effort intends to provide a clearer
understanding of the industry in order to more effectively improve it in the future.
Keywords: carve-outs, Colorado, contracting, Massachusetts, Medicaid, public sector,
Utah, utilization management
42. Mechanic, D., Schlesinger, M., & McAlpine, D. D. (1995). Management
of mental health and substance abuse services: State of the art and early
results. The Milbank Quarterly, 73(1), 19-55.
This article is a review of research literature and anecdotal reports on mental health and sub-stance
abuse managed care programs. The authors conclude that managed mental health care
has the potential to reduce treatment costs and to apply uniform standards of appropriate
treatment for patients. While noting potential obstacles that managed mental health care plans
might encounter, the authors state that some forms of managed care have been successful at
incorporating more flexible benefits and more innovative treatment programs for private and
public mental health patients. The article encourages further research on the quality and cost-effectiveness
of managed mental health care.
Keyword: outcomes
43. Milhalik, G., & Scherer, M. (1998). Fundamental mechanisms of
managed behavioral health care. Journal of Health Care Finance, 24(3),
1-15.
In this article, the authors describe the individual structures and components of managed
behavioral health care organizations (MBHOs) as a means of understanding the trend in
the evolution of behavioral managed care. In particular, the authors examine the advantages
and disadvantages of both carving in and carving out mental health care services, various
payment mechanisms and contracts between MBHOs and payers and the contracts between
MBHOs and their providers (including case rate contracts and withholds), utilization man-agement
systems, and models for the management and delivery of behavioral health care.
Keywords: carve-outs, contracting, managed behavioral health care organizations
44. Moss, S. (1998). Contracting for managed substance abuse and mental
health services: A guide for public purchasers: Vol. 22. Technical assistance
publication series. Rockville, MD: Center for Substance Abuse Treatment.
In response to the importance of establishing strong contracts between purchasers of health
care services and managed care organizations in the development of managed behavioral
health systems, this document provides information for public purchasers regarding the design
of requests for proposals (RFPs) and contracts in managed behavioral health care. The guide
includes eight separate chapters: (1) an overview of managed care and the importance of a
good contract, (2) a step-by-step process for designing and implementing a managed care sys-tem,
(3) a discussion on essential decisions concerning services and medical necessity, (4) an
examination of the establishment and maintenance of provider networks, (5) an analysis of key
features of a management information system, (6) a discussion of issues pertaining to quality
of care, (7) an analysis of different aspects of financing in a managed care environment, and
(8) a look at consumer protection issues. The guide also provides a resource list of organiza-tions
involved in managed behavioral health care, a glossary, and nine appendices with exam-ples
of proposals, sample bidder letters, definitions of different services, criteria for the use of
block grant funds, outcome measures, and contract language.
Keywords: contracting, managed behavioral health care organizations, public sector,
substance abuse, technical assistance
45. Nauert, R. C. (1997). Managed behavioral health care: A key component
of integrated regional delivery systems. Journal of Health Care Finance
23(3), 49-61.
This article discusses the importance, in the current business environment, of a strong managed
behavioral health care component within regional integrated health systems. The author dis-cusses
current trends in the business environment and addresses a number of issues that need
to be considered when pursuing the behavioral health care market. The author provides an
overview of the alternative roles large hospitals and medical centers can take in responding to
market demands for managed behavioral health care. The author also discusses planning
assumptions and reviews the strengths and weaknesses of academic medical centers and large
hospitals, which can impact the successful development of behavioral health care. The author
provides a prototype of a managed behavioral health care strategic business unit as part of a
regional health system and discusses its advantages and pitfalls. The author concludes with a
discussion of capitation contracts, risk control and quality assurance, and the importance of
data tracking systems.
Keywords: integration, overviews
46. Ogles, B. M., Trout, S. C., Gillespie, D. K., & Penkert, K. S. (1998).
Managed care as a platform for cross-system integration. The Journal of
Behavioral Health Services & Research, 25(3), 252-268.
The implementation of managed care into public sector mental health care has raised concerns
about the ability of this previously private-sector strategy to provide services consistent with the core values of an integrated system of care. This paper examines the basic arguments
on both sides of this debate, focusing on the recent changes in the mental health care system
and the potential benefits and drawbacks of incorporating into it managed care principles.
Using the example of Integrated Services for Youth, a private, nonprofit corporation in Ohio
designed to manage the care of children and adolescents who are involved with multiple
public-sector service systems, the authors demonstrate how managed care principles and
system-of-care values are not necessarily mutually exclusive and may even facilitate cross-system
integration of services for children and youth.
Keywords: children, integration, Ohio
47. Padgett, D. K., Patrick, C., Burns, B. J., Schlesinger, H. J., & Cohen, J.
(1993). The effect of insurance benefit changes on use of child and
adolescent outpatient mental health services. Medical Care, 31, 96-110.
This study examines the responsiveness of benefit changes on the use of outpatient mental
health benefits for children and adolescents. Between 1978 and 1983, Blue Cross and Blue
Shield Federal Employees Plan (FEP) benefits for dependent children and adolescents were cut,
and there was a shift from high- to low-option plan enrollment. During this time, there was a
slight increase in the proportion of clients who received outpatient benefits; however, the aver-age
number of visits decreased from 18.9 to 12.8. While benefit coverage was a strong predic-tor
of the use of mental health benefits, ethnicity, parent’s education, type of provider, and type
of treatment setting were also significant predictors of use. The study found that 2.76 percent
of children in FEP used outpatient mental health services in 1983, representing approximately
one-half of the proportion of U.S. children estimated to be in acute need. These findings’ impli-cations
are discussed in the context of changes in the financing and delivery of mental health
services, especially with regard to managed care, and also in the context of the growing pres-sures
for national health insurance.
Keyword: children
48. Patterson, D. Y. (1993). Twenty-first century managed mental health:
Point-of service treatment networks. Administration and Policy in Mental
Health, 21, 27-33.
Many public and private employers now favor the point-of-service (POS) plan that allows
the prospective patient to decide at the point of service delivery whether to use a contracted
or non-network provider. This article describes the nature of the POS plan and its impact
on employers and employees. The author argues that only by developing a POS choice that
is cost-neutral to the employer does a managed care network gain the moral authority and
leverage to design a high-quality and cost-effective system. The article describes the principles
guiding a rationally planned POS system and offers suggestions for internal and external
oversight and quality assurance.
Keywords: models, providers
49. Patterson, D. Y. (1990). Managed care: An approach to rational
psychiatric treatment. Hospital and Community Psychiatry, 41, 1092-1095.
According to this author, managed care is not necessarily bureaucratic and dehumanizing,
nor is it a stop on an inevitable route toward health care rationing or a national health care
service. In contrast, he argues, the partnership of the right delivery model and the right
providers with the right financial incentives and proper management-consumer oversight can
lead to the most rational mental health care delivery possible. A rational mental health care
plan requires that a managed system be able to construct the right delivery model, select the
appropriate providers, employ judicious financial incentives, and undertake adequate over-sight.
The author describes the principles that he would include in an effective delivery model
for mental health care.
Keyword: models
50. Patterson, D. Y., & Berman, W. H. (1991). Organizational and service
delivery issues in managed mental health services. In C. S. Austad &
W. H. Berman (Eds.), Psychotherapy in managed health care: The optimal
use of time and resources (1st ed., pp. 19-32). Washington, DC: American
Psychological Association.
In this chapter, the authors outline the organizational and structural components of managed
mental health care. They examine the types of managed mental health systems and their
advantages and disadvantages, the types of benefits and limitations that are likely under
various plans, and professional roles and conflicts in managed mental health service delivery.
These include referral procedures, staffing patterns, and inpatient and outpatient services.
Keywords: models, staffing
51. Pearson, J. (1992). Managed mental health: The buyer’s perspective.
In S. Feldman (Ed.), Managed mental health services (1st ed., pp. 127-142).
Springfield, IL: Charles C. Thomas.
Employers are finding that generic utilization review approaches are neither reducing mental
health costs nor delivering quality care. The author presents options that exist in managed
care, and the questions that employers should consider in deciding whether or not to imple-ment
such an approach. This chapter describes the advantages and disadvantages of employee
assistance programs, benefit redesign, strengthened existing utilization review, specialty case
management, and contracts with a preferred provider organization or exclusive provider
organization. The chapter discusses the factors and decision-making process that shape a
company’s managed mental health program. The author states that good cost and utilization
data are essential in determining how to reimburse a managed care firm and discusses the
critical role consultants play in the process of educating their client companies and helping
them to select an appropriate managed care firm.
Keywords: overviews, private sector programs
52. Penner, N. R. (1994). The road from peer review to managed care:
Historical perspective. In S. A. Shueman, W. G. Troy, & S. L. Mayhugh
(Eds.), Managed behavioral health care: An industry perspective (pp.
29-44). Springfield, IL: Charles C. Thomas.
This chapter describes the ways in which both the American Psychiatric Association and
American Psychological Association were pioneers in the managed mental health field
through the development of the Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS). The authors highlight the program’s potential to provide the profes-sions
with the opportunity to shape the development of both public and private mental
health service delivery systems, as well as the program’s potential to create a system of
public accountability. The chapter describes the associations’ loss of this program and
reduced influence in shaping current managed systems.
Keyword: overviews
53. Pfaum, B. B. (1991). Seeking sane solutions: Managing mental health
and chemical dependency costs. Employee Benefits Journal, 31-40.
Studies have shown that mental illness and chemical dependency disorders are undertreated
and that treatment for these disorders is generally not delivered efficiently. Increasingly,
employers are recognizing the indirect costs of mental illness and chemical dependency disor-ders,
such as increased absenteeism, lower productivity, and increased utilization of other
health plan benefits. This article discusses some of the factors that companies should consider
in designing a managed care program. Such a program should provide full coverage, control
access to care, facilitate early intervention, use alternative care to assist "high" users, and apply
appropriate screening criteria. The article also discusses factors to consider in using an employ-ee
assistance program, a utilization review, a preferred provider organization, or a carve-out
are also discussed. The author argues that these options can be used together, and outlines the
issues employers should consider in using HMOs to control mental health and chemical
dependency treatment costs.
Keywords: costs, overviews, private sector programs, substance abuse
54. Rodriguez, A. R. (1994). Mental health services under health reform:
The less government, the better. Managed Care Quarterly, 2(2), 10-12.
The author of this viewpoint article asserts that current health care reform proposals in favor
of government-backed managed competition are not in the best interest of patients. Such pro-posals
will lead to increased cost and inefficiencies and decreased access to care. The author
advocates for privately managed mental health programs which he believes have already
demonstrated their efficiency in decision making, their economies of operation, their accounta-bility
to multiple constituencies, and their commitment to quality of service.
Keywords: health care reform
55. Rogerson, C. L. (1994). Information system requirements for managed
care programs. In S. A. Shueman, W. G. Troy, & S. L. Mayhugh (Eds.),
Managed behavioral health care: An industry perspective (pp. 193-204).
Springfield, IL: Charles C. Thomas.
This chapter describes the importance of automating operations and program activities for
managed care companies. The author discusses several functions of an automated system and
offers guidelines for setting up such a system. He argues that while it is possible to operate a
small managed care program without an integrated information system, efficiency will be nev-ertheless
hampered.
Keywords: information systems
56. Rosenbaum, S., Shin, P., Zakheim, M. H., Shaw, K., & Teitelbaum, J. B.
(1998). Special report of negotiating the new health system: A nationwide
study of Medicaid managed care contracts. Washington, DC: George
Washington University Center for Health Policy Research.
This special report analyzes Medicaid managed care contracts specific to mental illness and
addiction disorders. The report analyzes 54 contracts and related documents, 12 of which were
managed behavioral health care contracts that were in effect at the beginning of 1997.
Although this report considers Medicaid contracts, the authors contend that its findings are
relevant to all public purchasers of managed care services for mental illness and substance
abuse populations because, like Medicaid, these other sources of third-party payment have tra-ditionally
supported services that may or may not be customary for the insurance industry to
support. The report’s findings indicate that States are making an effort to design managed care
systems that function well for children and adults, but it also highlights the perceived inade-quacies
in the contracting abilities of public purchasers such as managed behavioral health care
carve-out contracts, which are frequently vague.
Keywords: contracting, Medicaid, public sector, substance abuse
57. Rosenbaum, S., Silver, K., & Wehr, E. (1997). An evaluation of contracts
between managed care organizations and community mental health and
substance abuse treatment and prevention agencies: Vol. 1. Managed care
technical assistance series. Rockville, MD: Substance Abuse and Mental
Health Services Administration.
This study is designed to help public policymakers, group purchasers, providers, and con-sumers
understand the structure and content of provider network agreements between man-aged
care organizations and community mental health and substance abuse treatment and pre-vention
agencies. From their in-depth analysis of 50 selected contracts, the researchers explain
various aspects of contract provisions, including services, the duty to treat patients, the necessi-ty
of prior authorization, medical necessity, capitation agreements, fee-for-service agreements,
coordination of benefits, and numerous other clauses of the contracts. The paper includes conclusions, recommendations, and two appendices covering methodology; the paper also has 28
different tables portraying the results of the study.
Keywords: community providers, contracting, managed behavioral health care organi-zations,
substance abuse, technical assistance
58. Roy-Byrne, P., Russo, J., Rabin, L., Fuller, K., Jaffe, C., Ries, R.,
Dagadakis, C., & Avery, D. (1998). A brief medical necessity scale for
mental disorders: Reliability, validity, and clinical utility. The Journal of
Behavioral Health Services & Research, 25(4), 412-424.
While managed care organizations (MCOs) use the concept of "medical necessity" to deter-mine
whether to authorize treatment for an individual, there is currently no consistent meas-urement
of medical necessity for a mental health condition. To address this need, the authors
have developed an instrument of 13 items relevant to the concept of medical necessity. In this
paper, they describe the medical necessity scale and present findings from their pilot testing of
this scale. In a study of 205 patients, they found that the internal consistency reliability and the
interrater reliability of the instrument were both acceptable. They conclude that the instrument
is able to measure the multiple aspects of a patient’s condition needed to make decisions on
medical necessity, although they advocate further studies with different patient populations and
staff interviewers to determine whether the reliability results are generalizable.
Keywords: medical necessity
59. Savitz, S. A., Grace, J. D., & Brown, G. S. (1993). "Parity" for mental
health: Can it be achieved? Administration and Policy in Mental Health, 21,
7-14.
Parity of insurance coverage for psychiatric and physical illness is a major issue in health care
reform. Proponents of parity and partial parity, such as the American Psychiatric Association
and the National Alliance for the Mentally Ill, argue that coverage for psychiatric and physical
illness should be equal with respect to dollar limits, deductibles, and coinsurance. Such an
approach is expensive. The authors describe strategies for achieving parity, such as capitation,
case management, and the use of provider networks. They propose a model to reduce high uti-lization
of unnecessary care, that incorporates managed care strategies for the cost-effective
and equitable provision of behavioral health care.
Keyword: parity
60. Schwartz, B. J., & Wetzler, S. (1998). A new approach to managed care:
The provider-run organization. Psychiatric Quarterly, 69(4), 345-353.
For many psychiatric hospitals and teaching facilities, managed care has become synonymous
with shortened lengths of stay, reduced reimbursement, and the invasion of third-party care
managers into the client-patient relationship. In this paper, the authors describe an alternative
model to managed care, in which providers contract with HMOs directly, thereby eliminating
the need for intermediary managed care organizations. This provider-run, hospital-based
approach allows providers to regain control over service delivery. Through the example of one such organization, the authors discuss the philosophy behind this model, the legal
structures created to assume the financial risk, provider relationships, recruitment, manage-ment,
reimbursement, the treatment paradigm, and the marketing strategies the new model
involves. From the utilization data already collected on this organization, the authors demon-strate
that utilization in the provider-run approach is consistent with that of a highly managed
population.
Keywords: models, providers
61. Sederer, L. I., & Bennett, M. J., (1996). Managed mental health care in
the United States: A status report. Administration and Policy in Mental
Health, 23(4), 289-306.
The authors review managed mental health care in the United States. The report begins with
a brief history of managed mental health care and proceeds to concentrate on six major issues:
what is insurable, carve-ins, networks, contract and professional liability, ethics, and support
for teaching and research. The report’s final section discusses factors such as utilization man-agement
and economies of scale: factors that allowed managed care to achieve savings through
1996. The authors conclude with recommendations to the managed care industry and policy-makers
on how best to sustain these cost savings into the future.
Keywords: ethics, liability, overviews, utilization management
62. Sharfstein, S. S. (1988). Changing insurance markets. In D. J. Scherl, J.
T. English, & S. S. Sharfstein (Eds.), Prospective payment and psychiatric
care (pp. 121-128). Washington, DC: American Psychiatric Association.
The author describes the major trends in third-party financing of health care, in which the
third parties are government and business, and not only the insurance industry. These trends
include the growth of prospective payment, employer self-insurance, data gathering, both verti-cally
and horizontally integrated systems (such as HMOs and hospital chains), and subspecial-ization
in the insurance market. The author discusses cutbacks in private coverage resulting
from industry fears of adverse selection and moral hazard. Other issues raised in this piece
include lack of access, high administrative costs, and the decline of professional autonomy.
Keyword: trends
63. Shueman, S. A., & Troy, W. G. (1994). The use of practice guidelines
in managed behavioral health programs. In S. A. Shueman, W. G. Troy,
& S. L. Mayhugh (Eds.), Managed behavioral health care: An industry
perspective (pp. 149-164). Springfield, IL: Charles C. Thomas.
This chapter provides a historical perspective on the use of practice guidelines in managed
behavioral health programs. The authors discuss the evolution of practice guidelines and the
rationale for their use. They describe current professional guidelines and their uses in managed
behavioral care programs. The chapter also describes implications of practice guidelines in managed mental health programs. The authors speculate about the future development and
implementation of practice guidelines.
Keywords: quality assurance, standards of care
64. Shueman, S. A., Troy, W. G., & Mayhugh, S. L. (1994). Principles and
issues in managed behavioral health care. In S. A. Shueman, W. G. Troy,
& S. L. Mayhugh (Eds.), Managed behavioral health care: An industry
perspective (pp. 7-28). Springfield, IL: Charles C. Thomas.
This chapter focuses on the basic principles and key issues in managed behavioral health care.
The authors discuss the health services and financing environment that was in place before the
1980s, which provided the foundation for managed care. Some specific cost and quality-of-care
issues are discussed as well as innovative strategies to manage the behavioral health serv-ice
system. The chapter concludes with a discussion of some of the challenges to managed
behavioral health care companies.
Keyword: overviews
65. Smukler, M., Sherman, P. S., Srebnik, D. S., & Uehara, E. S. (1996).
Developing local service standards for managed mental health services.
Administration and Policy in Mental Health, 24(2), 101-116.
Capitated community mental health models may create incentives to withhold care. This study
describes a method for eliminating this problem by creating standards for minimal levels of
care. These standards, or Recommended Service Levels (RSLs), were created to test for the
minimum, appropriate services for consumers at several levels of need. The RSL project was
executed in five stages: (1) organizing the project participants, including an oversight commit-tee
and a clinical-expert panel; (2) developing RSLs based on provider recommendations for
specific consumer groups and the appropriate level of services for them, in order to achieve
acceptable outcomes for these groups; (3) creating an assessment instrument that could catego-rize
consumer groups based on the level of services; (4) creating a decision tree that would
allow assessment data to categorize a consumer for the appropriate RSL; and (5) testing the
RSL in a sample of consumers. The field-test results showed that the RSL method has promise,
but that it needed to include the consumer in the RSL process; manage the tension between
developers of local standards and the managed care entity responsible for funding the service
system; and validate the RSL standards through outcomes data.
Keywords: standards of care
66. Spiro, A. H. & Stokes, L. Q. (1991). A multifaceted approach to
managed mental health care. American College of Medical Quality, 6(2),
54-58.
This article describes how an Independent Physicians Association (IPA) Model HMO with
approximately 100,000 members manages its own mental health utilization. The system
revolves around highly trained case managers who are granted tremendous leeway in directing
patients toward appropriate care. These care managers use flexible benefits, such as 100 per-Special managed mental health programs. The authors speculate about the future development and
implementation of practice guidelines.
Keywords: quality assurance, standards of care
64. Shueman, S. A., Troy, W. G., & Mayhugh, S. L. (1994). Principles and
issues in managed behavioral health care. In S. A. Shueman, W. G. Troy,
& S. L. Mayhugh (Eds.), Managed behavioral health care: An industry
perspective (pp. 7-28). Springfield, IL: Charles C. Thomas.
This chapter focuses on the basic principles and key issues in managed behavioral health care.
The authors discuss the health services and financing environment that was in place before the
1980s, which provided the foundation for managed care. Some specific cost and quality-of-care
issues are discussed as well as innovative strategies to manage the behavioral health serv-ice
system. The chapter concludes with a discussion of some of the challenges to managed
behavioral health care companies.
Keyword: overviews
65. Smukler, M., Sherman, P. S., Srebnik, D. S., & Uehara, E. S. (1996).
Developing local service standards for managed mental health services.
Administration and Policy in Mental Health, 24(2), 101-116.
Capitated community mental health models may create incentives to withhold care. This study
describes a method for eliminating this problem by creating standards for minimal levels of
care. These standards, or Recommended Service Levels (RSLs), were created to test for the
minimum, appropriate services for consumers at several levels of need. The RSL project was
executed in five stages: (1) organizing the project participants, including an oversight commit-tee
and a clinical-expert panel; (2) developing RSLs based on provider recommendations for
specific consumer groups and the appropriate level of services for them, in order to achieve
acceptable outcomes for these groups; (3) creating an assessment instrument that could catego-rize
consumer groups based on the level of services; (4) creating a decision tree that would
allow assessment data to categorize a consumer for the appropriate RSL; and (5) testing the
RSL in a sample of consumers. The field-test results showed that the RSL method has promise,
but that it needed to include the consumer in the RSL process; manage the tension between
developers of local standards and the managed care entity responsible for funding the service
system; and validate the RSL standards through outcomes data.
Keywords: standards of care
66. Spiro, A. H. & Stokes, L. Q. (1991). A multifaceted approach to
managed mental health care. American College of Medical Quality, 6(2),
54-58.
This article describes how an Independent Physicians Association (IPA) Model HMO with
approximately 100,000 members manages its own mental health utilization. The system
revolves around highly trained case managers who are granted tremendous leeway in directing
patients toward appropriate care. These care managers use flexible benefits, such as 100 per-Special cent outpatient care coverage, to reduce hospital use. The program also implements PATH
(Projects for Assistance in Transition from Homelessness), a crisis intervention team of clinical
psychologists that provides care in the home. An outside psychiatrist reviewer and psychiatric
case manager monitor inpatient care, authorize lengths of stay, and precertify admissions.
The program has resulted in dramatic decreases in hospital utilization.
Keywords: case management, utilization management
67. Sturm, R. (1997). How expensive is unlimited mental health care
coverage under managed care? Journal of the American Medical
Association, 278(18), 1533-1537.
This article analyzes data on behavioral health utilization for 24 new managed care plans in
1995 and 1996 and estimates the costs of removing different coverage limits for behavioral
health as required by the Mental Health Parity Act. The data were obtained from the UCLA/
RAND Research Center on Managed Care and purposely analyze managed behavioral health
carve-out plans that offered more generous coverage than discussed during the parity legisla-tion
debate. The author concludes that the policy decisions that gave rise to the Mental Health
Parity Act might have been based on incorrect assumptions and outdated data, which led to
dramatic overestimates. For mental health care, the consequences of improved coverage under
managed care are relatively minor.
Keywords: carve-outs, costs, economics, legislation, parity
68. Substance Abuse and Mental Health Services Administration. (1997).
An evaluation of contracts between state Medicaid agencies and managed
care organizations for the prevention and treatment of mental illness and
substance abuse disorders: Vol. 2. Managed care technical assistance
series. Rockville, MD: Substance Abuse and Mental Health Services
Administration.
This study provides a point-in-time examination of service agreements in operation at the end
of 1995 between State Medicaid agencies and managed care organizations to provide mental
health and substance abuse services. This study represents a review of Medicaid comprehen-sive-
risk agreements and requests for proposals from approximately 35 States. The contracts
reviewed include general service agreements covering primary health and several behavioral
health care carve-out contracts. This study concludes that the behavioral health care market
would benefit from the development of recommended specifications for managed care on treat-ing
and preventing mental health and substance abuse disorders, since these treatment initia-tives
were not in the normal domain of older commercial insurance concepts of coverage.
Keywords: carve-outs, contracting, Medicaid, public sector, substance abuse, technical
assistance
69. Weiner, R. B., & Siegel, D. (1989). Managed mental health care issues
and strategies. Benefits Quarterly, 5(3), 21-31.
This article examines the scope of the problem of rising mental health and substance abuse
costs and the strategies that employers can use to reduce these costs. Cost increases, both direct
and indirect, are attributed to several causes: increased demand for expanded benefits, excess
supply of providers, ineffective benefit design, and lack of standards for diagnosis and treat-ment.
The authors describe five cost containment strategies—restrictive/limited benefits, utiliza-tion
management, employee assistance programs, carve-outs, and provider networks—and the
factors employers should consider in selecting a strategy. Employers are urged to be flexible so
that strategies reflect the changing needs of their workers.
Keyword: costs
70. Wells, K. B., Hosek, S. D., & Marquis, M. S. (1992). The effects of
preferred provider options in fee-for-service plans on use of outpatient
mental health services by three employee groups. Medical Care, 30,
412-424.
This quasi-experimental comparison-group study tests two hypotheses. The first is that
employees who use preferred provider organizations (PPOs) are more likely than those
enrolled in fee-for-service plans to use outpatient mental health care. The second hypothesis
is that employees enrolled in PPOs will use less mental health services in general than those
in fee-for-service plans. Use patterns before and after PPO implementation are compared for
three PPOs. A survey of 8,828 employees was conducted to evaluate intentions to use PPO
providers. Intention was measured using a battery to determine each respondent’s usual
source of medical care before and after PPO implementation. The study found that intent to
use PPOs did not significantly affect the probability of use of outpatient mental health servic-es
because of access barriers and referral patterns by PPOs. Finally, the study found that PPO
members use less outpatient mental health services than non-PPO members, despite lower
cost-sharing for services received from PPO providers.
Keywords: PPOs, utilization
71. Wells, K. B., Manning, W. G., & Valdez, R. B. (1990). The effects of a
prepaid group practice on mental health outcomes. Health Services
Research, 25, 615-625.
The study uses data from the RAND Health Insurance Experiment to test the hypothesis
that there is a difference in mental health outcome between those enrolled in HMOs and
those enrolled in comparable fee-for-service plans. Families in the Seattle area were randomly
assigned to either the Group Health Cooperative of Puget Sound (a prepaid group practice),
to a fee-for-service plan with a family coinsurance rate of 0 percent, or to family pay plans
with coinsurance rates of 25 percent, 30 percent, or 95 percent for outpatient mental health
services. Mental health status was assessed at enrollment and at the end of each year of par-ticipation.
The study found no statistically significant or clinically meaningful differences in mental health outcomes among these groups. The authors argue that the less intensive style
of treatment in the prepaid group practice was not associated with noticeably worse mental
health outcomes.
Keywords: HMOs, outcomes
72. Wells, K. B., Marquis, M. S., & Hosek, S. D. (1991). Mental health and
selection of preferred providers: Experience in three employee groups.
Medical Care, 29, 911-924.
This study examines the effects of mental health status and the prior use of mental health
services on provider selection by employees enrolled in fee-for-service plans with a preferred
provider organization (PPO). For the study, claims and survey data were obtained from three
large employee groups. The authors found that among persons who used mental health serv-ices
after implementation of the PPO, those who had previously visited providers who subse-quently
became part of the PPO panel tended to stay with those PPO providers. On the other
hand, those who previously visited providers who did not later join the panel did not select
from PPO providers for mental health care. The study demonstrates the importance of the
patient-provider relationship in the selection of a mental health provider.
Keywords: PPOs, providers
73. White, K., & Shields, J. (1991). Conversion of inpatient mental health
benefits to outpatient benefits. Hospital and Community Psychiatry, 42,
570-572.
This article uses a case-study approach to describe how the conversion of inpatient to out-patient
mental health benefits can lead to cost savings as well as to improved mental health
outcomes. In 1987, Blue Cross-Blue Shield of Massachusetts revised the contract of a benefi-ciary
who had used extensive inpatient treatment for multiple psychiatric diagnoses. During
1986 alone she had admissions costing over $100,000. In-between hospitalizations, she used
day treatment and lived in a halfway house. In 1987, her contract was revised to cover a vari-ety
of outpatient services including the halfway house, supplementary day treatment, and an
activity program. This revision eventually led to a cost of approximately $33,000 that year:
a considerable savings compared to the previous contract. The patient also showed marked
improvement. The authors attribute this to several factors including the use of new drugs and
behavioral therapy, an individualized program at the halfway house, and the use of a nurse
case manager both to assess treatment successes and failures and to work with the patient’s
family. The authors conclude that better funding and utilization of outpatient services may be
cost-effective and also lead to improved outcomes.
Keywords: costs, outcomes
74. Wise, R. A. (1992). Managed care of the acutely ill psychiatric patient:
Development of a new delivery system. In J. Feldman & R. J. Fitzpatrick
(Eds.), Managed mental health care: Administrative and clinical issues (1st
ed., pp. 375-384). Washington, DC: American Psychiatric Press.
This chapter focuses on the challenging problems of caring for the acutely psychiatrically ill
patient who often consumes a disproportionate percentage of treatment time and resources.
The author reviews some current methods for managing the inpatient benefit for these patients.
He suggests a new system that can improve efficiency by more closely matching resources to
patient needs through alternative-to-hospital programs in conjunction with hospital care.
He describes the specific goals and some effective strategies that were developed at a staff
model HMO. He argues that managed care settings are best suited to explore alternative-to-hospital
programs, and that as the success of these programs is better documented, other
payors will be more willing to reimburse for this type of care.
Keywords: serious mental illness
75. Wolfe, H. L., Astrachan, B. M., & Scherl, D. J. (1988). Psychiatric
practice in organized health and proprietary care systems. In D. J. Scherl,
J. T. English, & S. S. Sharfstein (Eds.), Prospective payment and psychiatric
care. Washington, DC: American Psychiatric Association.
This chapter summarizes organized systems of care approaches to controlling mental health
costs. The authors describe the development, strengths and weaknesses of HMOs, preferred
provider organizations, employee assistance programs, and "multis"(multi-institutional corpo-rations).
The authors describe the practical and ethical implications of these payment systems
for psychiatrists, patients, and society at large. They conclude that the American Psychiatric
Association must focus attention on the issues of practice in organized settings and on the
nature and ethics of organizational practice.
Keywords: costs, EAPs, ethics, HMOs, PPOs
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