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Medicaid Savings Require Integrated Physical, Mental Healthcare

Taking an integrated, team-based approach to Medicaid may help provide better overall physical and mental healthcare for beneficiaries.

By Jennifer Bresnick

- Integrated population health management strategies are foundational for cutting costs and improving outcomes for Medicaid beneficiaries with complex behavioral, clinical, and mental healthcare needs, the Anthem Public Policy Institute states in a new report.

Mental healthcare and integrated Medicaid management

Managed care organizations (MCOs) that successfully break down siloes between behavioral and clinical care environments may be the key to delivering coordinated, cost-effective, and comprehensive services to vulnerable populations facing a range of socioeconomic challenges.

“Too often, owing to the typically siloed nature of health care services and payment for physical health and mental health/substance abuse treatment, these conditions have been treated apart from one another, leading to poorer outcomes and higher costs,” said Jennifer Kowalski, vice president of the Anthem Public Policy Institute.

“MCOs are uniquely positioned to support the delivery of integrated, holistic care. MCOs can serve as the locus of coordinated care for beneficiaries by working with state Medicaid programs, mental health agencies, providers, members and their families, as well as community-based organizations that coordinate housing and other needs.”

The case for integrating mental and physical healthcare is a strong one, says the report, and the financial argument is becoming increasingly clear.  One in five Medicaid beneficiaries has a mental health or substance abuse issue, and sixty percent of those patients have also been diagnosed with at least one chronic disease.

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While this group includes only 20 percent of Medicaid patients, they account for nearly 50 percent of program spending, totaling more than $131 billion in 2011, Anthem says.

“One study found that costs are 60 to 75 percent higher for Medicaid fee-for-service (FFS) beneficiaries with a mental illness and one or more chronic physical conditions, and two to three times higher when a drug or alcohol condition is also present,” the report added.

To curb these high costs, clinical care organizations should develop closer partnerships with behavioral healthcare providers and community support services that can supplement traditional care – and Medicaid programs should incentivize this process by “carving in” reimbursement for integrated services.

“Increasingly states with Medicaid MCOs are moving towards carve-in models. At least eight states—Alabama, Colorado, Iowa, Louisiana, Nebraska, New York, Washington, and West Virginia —are planning to or have recently carved in mental health and substance use disorder (MH/SUD) benefits, including administrative and financial responsibility for those services,” Anthem explains.

“Additionally, a number of states have contracted with MCOs to offer products designed to meet the needs of specific populations.”

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While many of these integration projects are relatively new and have not yet produced sufficient data to draw conclusions about their results, a 2009 review of literature about Medicaid managed care did find some level of cost savings in all of the studies surveyed, the brief asserts.

Reductions in pharmacy spending, inpatient utilization, and emergency department visits were primarily responsible for savings, with patients receiving Supplemental Security Income (SSI) among the biggest beneficiaries of the strategy.

Anthem is attempting to replicate these findings by encouraging its affiliated plans to move towards an integrated care model that makes participating MCOs responsible for the whole patient. 

Under this framework, MCOs take on financial and administrative responsibility for physical care, pharmacy needs, and mental health care.  MCOs create dedicated internal care teams assigned to patients with needs across the spectrum, and provide care coordination and care management services to higher-risk patients.

In Texas, Florida, Tennessee, and Kansas, Anthem has implemented MCO models that require increased accountability for integrated care management, incentivize data sharing and performance improvement, and leverage health IT tools like telehealth to increase patient engagement and expand access to care.

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Tennessee began work on its MCO integration program close to a decade ago, the report says. 

“Initially providers and stakeholders were hesitant to engage, but they now work closely with Anthem’s affiliated plan and other MCOs through a Behavioral Health Advisory Committee among other avenues.”

Performance score cards and regular meetings with regional stakeholders to share best practices help to drive continuous improvement.  Providers make a point of collecting member feedback to inform their care strategies, supporting members in turn through wellness coordinators that connect patients with necessary services.

The program has increased mental health and substance use disorder visits by 116 percent while reducing hospital admissions by 15 percent and ED visits by 59 percent for members with diabetes and serious mental illnesses, Anthem says. 

In Florida, data sharing, regional interdisciplinary teams, and strong regional partnerships engage providers in improvement efforts.  Teams meet on a regular basis to discuss challenges and successes.  They use clinical and administrative data, including inpatient admission rates and patterns of behavioral health codes, to compare performances between peer groups and motivate change.

Policymakers should support these efforts by creating value-based financial incentives for integrated care, the report suggests, and developing administrative frameworks to guide providers through the process of creating closer partnerships across the care continuum. 

“MCO contracts should include requirements that encourage coordination and collaboration between plans and providers and with community-based organizations that provide social supports and other services,” Anthem says.

“These requirements can help ensure that not only are the physical health, pharmacy, and MH/SUD needs of members addressed, but also the intermediate and long-term socioeconomic needs that can derail treatment, long-term stability, and recovery such as lack of stable housing or employment.”

Medicaid plans should also encourage the co-location of physical and behavioral healthcare services to reduce barriers to access, and are advised to develop patient-centered care coordination and navigation services to ensure that members are able to understand their care paths and engage with providers.

Investing in integrated care from top to bottom will help to create a collaborative, unified, and accountable care environment in which patients can flourish and providers can reap financial rewards, the report concludes.

“Successful integration requires strong partnerships among states, payers, providers, community-based organizations, and members and their families or caregivers. Medicaid MCOs can lead these integration efforts in partnership with states because they are uniquely positioned to support the delivery of integrated, person-centered care while driving accountability for improving quality, outcomes and controlling costs.”

“Early experiences from Anthem’s affiliated plans illustrate the range of strategies that are being employed by MCOs to promote integration of physical health and MH/SUD benefits and care—ranging from simply carving-in MH/SUD alongside physical health benefits to fully integrating care in a way that holds payers and providers accountable for costs and outcomes.”


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