David L. Shern, Ph.D. and the Evaluation Team Louis de la Parte Florida Mental Health Institute

Evaluation Results of the Prepaid Mental Health Demonstration:

Year 7 - Areas 1 and 6

Briefing for the Substance Abuse and Mental Health Corporation

August 4, 2004

David L. Shern, Ph.D.

and the Evaluation Team

Louis de la Parte Florida Mental Health Institute

Framing Evaluation Questions

What are the implementation issues related to systems redesign and expansion?

What is the impact of managed care on Medicaid enrollees’ Access to care? Health and mental health status? Costs of care?

Financing Condition

Health Mental Health

Pharmacy

Areas 1 & 6

MediPass/PMHP No Risk At Risk No Risk

Areas 1 & 6

HMOs At Risk At Risk At Risk

Areas 2, 4, & 7

MediPass No Risk No Risk No Risk

Financial Risk Arrangements

Integrated Sub-Studies• Implementation Analysis

– Review of Contracts– Surveys of Key Informants and Stakeholders

• Administrative Data – Medicaid Enrollment and FFS Claims– Managed Care Encounter Data– Pharmacy Claims Data– Global Functioning Measures for Service Users

• Adults with SMI Intensive Interview Study– Mental Health Status and Satisfaction Data– Social Cost Analysis

• Medicaid General Population Mail Survey

Description of the Provider Networks

Area 6

– HMOs primarily use the 5 main Community Mental Health Centers in the area

• All Fee-For-Service in the beginning– Shifted to capitation over time, but some Fee-For-Service still present

– PMHP uses the same 5 Community Mental Health Centers - stable structure over time

• Use risk adjusted capitation to Community Mental Health Centers

Area 6 Funding Streams as of 4/04

Agency for Health Care Administration

UBH

FHP/VO

MG

MHC

Northside

PR

WH

AmGHESTAY UHC

Community Mental Health Centers AssociateProv.

Solid line – CapitationDotted line – Fee for service

Other Providers

SA, SIPP, FACT, BHOS, STFC, & Comprehens. Assessment

Providers

Medicaid enrollees not eligible for managed care

WBH

Provider Networks

Area 1

– The PMHP and HMO have different provider networks

– Fee-For-Service for HMO Relationships

– Capitation for PMHP

Agency for Health Care Administration

ABHLVC

BW

COPE

HE

Providers(excluding LV)

Solid line – CapitationDotted line – Fee-for-service

Associate Providers

Area 1 Funding Streams as of 6/04

SA, SIPP, FACT, BHOS, STFC, & Comprehens. Assessment

Providers

Medicaid enrollees not eligible for managed care

WCBH

What Have We Learned?

The HMO Business Arrangements Have been Accompanied by Greater

Instability and Complexity in Organizational Arrangements

Agency for Health Care Administration

APS Horizon UBH CBC

FHP

MG

MHC

Northside

PR

WH

ValueOptions

St.A. FL 1st PHP HESTAY PCAUHC

Community Mental Health CentersOther Providers

AssociateProv.

ALP

MAG

MHC(CMHC)

MHC(CMHC)

WEL

BHM

Organizational Structure: Funding Streams as of 1/00

Area 6 Funding Streams as of 3/02

Agency for Health Care Administration

UBHCBC

FHP/VO

MG

MHC

Northside

PR

WH

ST.AFL 1st PHP HESTAY UHC

Community Mental Health Centers AssociateProv.

CMHC

HZ

Black = FFS Blue = Outpatient capped only Red = Outpatient & Inpatient capped Dotted line = Risk Sharing

Other Providers

Figure 6. Area 6 Funding Streams as of 4/04

Agency for Health Care Administration

UBH

FHP/VO

MG

MHC

Northside

PR

WH

AmGHESTAY UHC

Community Mental Health Centers AssociateProv.

Solid line – CapitationDotted line – Fee for service

Other Providers

SA, SIPP, FACT, BHOS, STFC, & Comprehens. Assessment

Providers

Medicaid enrollees not eligible for managed care

WBH

Implementation of Managed Care

Has Not Resulted in Improved Access to Services

Average 6-Month Penetration for Carve-Out Services: Areas 1, 2, and 4

0 . 0 %

2 . 5 %

5 . 0 %

7 . 5 %

1 0 . 0 %

1 2 . 5 %

1 5 . 0 %

1 7 . 5 %

J u l - D e c2 0 0 1

J a n - J u n2 0 0 2

J u l - D e c2 0 0 2

J a n - J u n2 0 0 3

F is c a l Y e a r

Pen

etra

tion

Rat

e

P M H P A r e a 1

H M O A r e a 1

M P A r e a 2

M P A r e a 4

Case Mix Adjusted

Average Annual Penetration for Carve-Out Services Only: Areas 6, 4 and 7

0%

5%

10%

15%

20%

25%

95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03

Fiscal Year

Per

cent

age

Who

Use

d S

ervi

ces

PMHP Area 6

HMO Area 6

MP Area 7

MP Area 4

Case Mix Adjusted

People with Schizophrenia enrolled in HMOs, which are at risk for pharmaceutical expenses, are

less likely to receive atypical antipsychotic medications

Atypical Penetration Areas 4 & 6

Adult Schizophrenia Diagnosis Only

0 %

1 0 %

2 0 %

3 0 %

4 0 %

5 0 %

6 0 %

7 0 %

8 0 %

9 0 %

9 5 9 6 9 6 9 7 9 7 9 8 9 8 9 9 9 9 0 0 ' 0 0 0 1 ' 0 1 0 2 ' 0 2 0 3

H M OP M H PM P 4

Enrollees are Receiving Fewer Services or Less Intensive Services in the Managed Care Conditions

HMO Enrollees Receive Fewer Services than Persons in the PMHP

PMPM Standard Costs by Category: Areas 1, 2 & 4 (Case Mix Adjusted)

Expenditure Category HMO 1 PMHP 1 MP 4 MP 2

Carve Out Mental Health $16.64 $23.86 $29.36 $30.71

Mental Health Services in the Health Sector

.86 4.71 4.02 3.22

Substance Abuse Services Paid by MCO

1.08 .00

Total Non-Pharmacy MH/SA Expenditures in Plan

$18.57 $23.87 (rows 1+3)

$33.38 $33.93

Pharmacy 13.47 21.01 23.94 20.09

Fee for Service MH Services Outside of Carve Out

2.69 5.46 5.72 5.31

Fee for Service SA .14 1.51 1.67 1.16

Total Mental Health $34.87 $56.56 $64.70 $60.49

PMPM Standard Costs by Category: Areas 6, 4 and 7 (Case Mix Adjusted)

Expenditure Category HMO 6 PMHP 6 MP 4 MP 7

Carve Out Mental Health $6.94 $11.85 $28.72 $31.46

Mental Health Services in the Health Sector

1.12 5.60 5.89 9.05

Substance Abuse Services Paid by MCO

0.94 0.01

Total Non-Pharmacy MH/SA Expenditures in Plan

$9.00 $11.86(rows 1+3)

$34.61 $40.51

Pharmacy 7.71 22.83 25.53 28.83

Fee for Service MH Services Outside of Carve Out

3.29 4.71 7.22 6.64

Fee for Service SA .15 1.70 1.75 1.43

Total Mental Health $20.15 $46.70 $69.11 $77.41

Reduced Intensity of Services has Generally Not

Been Associated with Poorer Outcomes for

Managed Care Enrollees

Youth in Area 1 Require Further Study to Explain

Poor Outcomes

Change in Predicted GAF Score Over Time For Ages 21-64 in Areas 1, 2, and 4 (n=5,278)

Financing Conditions differ p <.001Time p < .001; Interaction - NS

45

47

49

51

53

55

0 3 6

Time in Months

Pre

dict

ed G

AF

Sco

re

PMHP Area 1

HMO Area 1

MP Area 2

MP Area 4

Based on Our Social Cost Analysis, Reduced Intensity

of Services for Medicaid-Funded Services May be

Offset by Higher Expenditures by Other

Payers

Case-Mix Adjusted Annualized Costs for Adults with Severe Mental Illnesses

HMO(n=250)

PMHP(n=208)

FFS(n=171)

Total(N=629)

p for Two Way Comparison*

HMO vs.

PMHP

PMHP vs.

FFS

HMO vs.

FFS

Medicaid costs*

$ 5,681 $ 9,844 $ 8,414 $ 7,725 .01 .30 .02

Other public costs**

$ 8,162 $ 7,457 $ 6,464 $ 7,588 .12 .04 .00

Private costs***

$ 5,587 $ 5,744 $ 1,060 $ 4,258 .86 .00 .00

Societal costs $19,199 $22,062 $15,967 $19,399 .15 .00 .00* Medicaid costs include health care and transportation.

** Other public costs include off budget health care cost, housing subsidies, legal service, and volunteer cost.***Private costs include informal service provided by families/friends, earned income, and out of pocket fee if earned income equal to zero.

Service and Organizational

Recommendations

Service Recommendations

• Set Access Targets for Carve-Out Services at Pre-Implementation Levels at a Minimum in All Areas

• Assure that the Service Network is Adequate to Provide Services to Persons with More Severe Illnesses

Service Recommendations

• Assure Provision of Evidence Based Care for both Treatment and Rehabilitation– Fidelity Measurement

– Benchmarked Outcome Data

• Explore Methods to Appropriately Expand Consumer Knowledge about and Direction of Care– Particularly for Persons with More Chronic Care Needs

Organizational Recommendations

• Implement Strategies to Independently Assure Adequacy of Data for System Monitoring– Anticipate the Loss of Outcome Data for

Networks Like those Used in Area 1 HMO– Investigate Methods for Independently

Collecting Encounter Data Including Sources of Care from Other Public and Private Payers

Organizational Recommendations

• Assure Readiness to Provide Comprehensive Mental Health Benefits– Demonstrated Capacity in MIS – Demonstrated Management Capacity for

Authorization and Payment– Adequate Transition Strategies and Ramp-up

Time

Organizational Recommendations

• AHCA Should Develop, Test and Implement a Method to Assure Compliance with the 80% Rule– Incomplete Encounter Data Frustrates Adequate Monitoring

• Consider Expanding Range of Carve-Out Services to Limit Cost Shifting within Medicaid Budgets– Carefully Monitor Access to Specialized Services for Managed

Care Enrollees– Exclude Pharmacy Benefit and Explore other Methods to Control

Pharmacy Costs– Include Substance Abuse Services with Adequate Capitation Rate

Organizational Recommendations

• Coordinate Efforts with DCF and Other Relevant Providers (Child Welfare, JJ, etc.) to– Reduce Cost Shifting Among Public Payers– Assure Most Effective and Efficient Delivery

Strategies

Framing Evaluation Questions

What are the implementation issues related to systems redesign and expansion

What is the impact of managed care on Medicaid enrollees’ Access to care Health and mental health status Costs of care

Table 9. Annualized Formal Costs for Health Services On and Off Budget (Adjusted)

HMO

(n=250)

PMHP

(n=208)

FFS

(n=171)

Total

(N=629)

PH - On

Off

$2,229

$ 33

$5,018

$ 57

$2,021

$ 14

$2,886*

$ 37*

MH - On

Off

$2,387

$ 166

$2,117

$ 255

$3,563

$ 367

$2,815

$ 294

Rx - On $1,003 $2,536 $2,469 $1,885**

Off $ 314 $ 88 $ 107 $ 195**

Total - On

Off

$5,640

$ 513

$9,747

$ 398

$8,319

$ 487

$7,641*

$ 526

Grand Total $6,153 $10,146 $8,806 $8,167*

Health services include general medical, vision and dental care excluding transportation. * Significant at the 5 percent level. ** Significant at the 1 percent level.

Managed Care Arrangements, Particularly in the HMO Condition, have been

Accompanied by Consistent and Significant Problems with Encounter Data - Frustrating

Accountability

If Managed Care is to Accomplish its Goal of Giving

More to the State through Greater Efficiency and

Effectiveness of Management, We Must Get More from

Managed Care

Service and Organizational

Recommendations

Service Recommendations

• Set Access Targets for Carve-Out Services at Pre-Implementation Levels at a Minimum in All Areas

• Assure that the Service Network is Adequate to Provide Services to Persons with More Severe Illnesses

Service Recommendations

• Assure Provision of Evidence Based Care for both Treatment and Rehabilitation– Fidelity Measurement– Benchmarked Outcome Data

• Explore Methods to Appropriately Expand Consumer Knowledge about and Direction of Care– Particularly for Persons with More

Chronic Care Needs

Organizational Recommendations

• Implement Strategies to Independently Assure Adequacy of Data for System Monitoring– Anticipate the Loss of Outcome Data

for Networks Like those Used in Area 1 HMO

– Investigate Methods for Independently Collecting Encounter Data Including Sources of Care from Other Public and Private Payers

Organizational Recommendations

• Assure Readiness to Provide Comprehensive Mental Health Benefits– Demonstrated Capacity in MIS – Demonstrated Management

Capacity for Authorization and Payment

– Adequate Transition Strategies and Ramp-up Time

Organizational Recommendations

• AHCA Should Develop, Test and Implement a Method to Assure Compliance with the 80% Rule– Incomplete Encounter Data Frustrates

Adequate Monitoring• Consider Expanding Range of Carve-Out

Services to Limit Cost Shifting within Medicaid Budgets– Carefully Monitor Access to Specialized

Services for Managed Care Enrollees– Exclude Pharmacy Benefit and Explore other

Methods to Control Pharmacy Costs– Include Substance Abuse Services with

Adequate Capitation Rate

Organizational Recommendations

• Coordinate Efforts with DCF and Other Relevant Providers (Child Welfare, JJ, etc.) to– Reduce Cost Shifting Among

Public Payers– Assure Most Effective and

Efficient Delivery Strategies