[NYAPRS Enews] OM: Influencing The Behavioral Health Carve-Out Models

Mon Mar 26 08:35:42 EDT 2012

BHOs Of Today, BHOs Of Tomorrow: Influencing The Behavioral Health
Carve-Out Models

By Monica Oss CEO Open Minds  March 1, 2012

In the face of sweeping legislative change, and what seems like weekly
propositions to change the role and scope of federal entitlement
programs, it has become increasingly common to ask:

What are the chances of continuing the behavioral health carve-out model
and what will become of the role of the behavioral health organizations
(BHOs) managing those benefits?

Just so we are all on the same page, the "behavioral health carve-out
model" is a financing model where some portion of behavioral health
benefits (inpatient and/or outpatient and/or pharmaceuticals) are
separately managed and/or financed by another organization. This
carve-out model can be at different levels, including:

*	In the short-term, we are going to see the role of the BHO grow
with the growth of enrollment in managed care plans - particularly in
Medicaid. The growth in enrollment is happening due to two factors. The
first is that many payers are uncertain about the cost of parity
legislation and have moved to a carve-out model in order to "guarantee"
their spending level on mental health and addiction treatment.

1.	The payer level - referred to as the primary carve-out
2.	The health plan level - referred to as a secondary carve-out

In markets and/or health plans where a behavioral carve-out already
exists, BHOs have a number of key, and extremely influential powers over
service delivery, including controlling the selection of the
professionals and provider organizations in a particular delivery
system; setting service payment rates; setting clinical best practice
policies; and establishing the framework for the measurement of clinical
quality and performance.

Different payer organizations take distinctly different approaches for
the use of behavioral health carve-outs. Private employers are almost
universal in their use of managed care plans, and a carve-out managed by
a BHO. For Medicaid, only three states do not have some Medicaid managed
care - New Hampshire, Alaska, and Wyoming
<https://www.cms.gov/MedicaidDataSourcesGenInfo/04_MdManCrEnrllRep.asp>
.

When looking ahead at the role and influence of BHOs, we should consider
their impact in both the short- and the long-term future.

Short-Term Role and Influence

In the short-term, we are going to see the role of the BHO grow with the
growth of enrollment in managed care plans - particularly in Medicaid.
The growth in enrollment is happening due to two factors. The first is
that many payers are uncertain about the cost of parity legislation and
have moved to a carve-out model in order to "guarantee" their spending
level on mental health and addiction treatment. The second is specific
to state governments. With the growth of Medicaid spending over the past
three years, largely due to marked increase in the Medicaid rolls,many
states are increasing their enrollment of Medicaid beneficiaries in
managed care plans
<http://www.openminds.com/market-intelligence/basic/omolfree/110711strat
5.htm>  all members. Many are moving 'disabled' populations (including
populations with SMI) from fee-for-service financing model to a managed
care financing model. Most of these new Medicaid managed care
initiatives include a behavioral health carve-out at either the primary
or secondary financing level.

To manage Medicaid budgets in 2012, 24 states plan to expand their
managed care programs by either expanding the geographic area under
Medicaid managed care or by including more populations. States are using
Medicaid managed care to control costs and to expand the use of disease
and care management programs and patient-centered medical homes to
coordinate care for high cost and high need populations. According to
the Kaiser Family Foundation's recent survey, Moving Ahead Amid Fiscal
Challenges: A Look at Medicaid Spending, Coverage and Policy Trends
Results from a 50-State Medicaid Budget Survey for State Fiscal Years
2011 and 2012 <http://www.kff.org/medicaid/upload/8248.pdf> , states'
strategies to expand Medicaid managed care include:

1.	14 states will expand service areas; in 2010, four states
expanded service areas and in 2011, 13 states adopted this strategy.
2.	10 states will add eligibility groups; in 2010 three states
added eligibility groups, and in 2011 six states adopted this strategy.
3.	Six states will add mandatory enrollment groups; in 2010 five
states added mandatory enrollment, and in 2011 five more states adopted
this strategy.
4.	Nine states will include managed long-term care; in 2010 seven
states implemented managed long-term care and in 2011 four more adopted
this strategy.

Long-Term Role and Influence

When we're thinking about the long-term future, we should think about
the entirety of the next decade. Significant changes are in the works
for BHOs of the future. The evolution of accountable care organizations
(ACOs) will alter the BHO involvement by increasing these organizations
influence over the SMI population. In this emerging model, the BHOs will
have less influence over the "behavioral health" of a broader
population, but more influence over the smaller population with SMI.

This shift in the future role of BHOs is due to six market factors:

1.	Rising cost of consumers with multiple chronic conditions (this
high-cost consumer group is 5% of the population and represents 50+% of
medical spend) are driving interest in collaborative care models for
this population (see The Marketing Challenge Of The 5% & The 95%
<http://www.openminds.com/market-intelligence/basic/020112a.htm?>  all
members)
2.	Consumers with SMI (and addictions) are a significant portion of
this high-cost consumer group
3.	The collaborative care models that have emerged (ACOs and
medical homes) are based on enhanced primary care model
4.	Early research shows that most traditional primary care
physicians are not prepared to managed the care for consumers with SMI
5.	"Health home" models for consumers with SMI are emerging within
the traditional carve-out model
6.	For consumers with behavioral health disorders that don't meet
the definition of "SMI," it is likely that treatment for their disorders
will be addressed by primary care professionals rather than behavioral
health specialists

The most robust versions of these behavioral health carve-outs with
health home models are being tested in the Medicaid systems in Missouri
(Missouri Health Homes Launched January 1, 2012
<http://www.openminds.com/market-intelligence/basic/omolfree/010912mhcd2
.htm>  all members), Rhode Island (Rhode Island Medicaid Health Homes
State Plan Amendment
<http://www.openminds.com/library/112311mhcdricmhohhspa.htm> premium
members), Arizona, and Iowa (Arizona, Iowa Medicaid Partner With
Magellan Health Services To Launch Integrated Health Home Pilot Programs
<http://www.openminds.com/market-intelligence/basic/omolfree/090511mhcd4
.htm>  all members). In Missouri and Rhode Island, the mental health
carve-out with the health home model is being managed by BHOs that are
provider collaboratives. In Iowa and Arizona, the mental health
carve-out with the health home model is being managed by one of the
proprietary, for-profit BHOs.

We can never be certain of what the future holds, but when it comes to
behavioral health carve-out models in managed care, I would predict that
we will continue to see their influence in shaping the market for those
consumers that have serious mental illness for some time to come.

By Monica E. Oss, Chief Executive Officer, OPEN MINDS; 163 York Street,
Gettysburg, Pennsylvania 17325-1933; Telephone 717-334-1329; Fax
717-334-0538; Web site: www.openminds.com <http://www.openminds.com/> . 

Oss, Monica E. (2012, March). BHOs Of Today, BHOs Of Tomorrow:
Influencing The Behavioral Health Carve-Out Models. OPEN MINDS, The
Behavioral Health & Social Service Industry Analyst.

BHOs Of Today, BHOs Of Tomorrow: Influencing The Behavioral Health
Carve-Out Models
<http://www.openminds.com/market-intelligence/premium/2012/030112/030112
j.htm?#ixzz1qDy3ORPg>  

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