POSITION PAPER

Managed Care for Children’s Mental Health Services

Mental Health Council of Arkansas

September 2001

The Mental Health Council of Arkansas’ Children’s Subcommittee opposes the implementation of managed care for children and adolescent outpatient mental health services until the following concerns can be addressed:

• Limiting Access Versus Managing Care
• Incomplete Legislative Interim Studies
• Problems with the Adult Prior Authorization Process for Medicaid RSPMI (Rehabilitation Services for Persons with Mental Illness)
• Best Practices Not Supported

There is much concern that placing children’s outpatient mental health services in a managed care model will place more emphasis on limiting access to services rather than managing care, and thus serve to increase service gaps for children and their families. While some children’s mental health services are available in certain areas of the state, the vast majority of counties have major gaps in such services for children and families. The Center for Mental Health Services (CMHS) estimates that 20 percent of 13.7 million American children and adolescents have a diagnosable mental health disorder, yet barely one-third of them receive any mental healthcare. These untreated disorders often lead to school failure, alcohol and other drug use, violence or suicide, and place an unnecessary burden on children, families and communities. Based on these figures, 136,074 children and adolescents under the age of 18 in Arkansas are estimated to have a diagnosable mental health disorder (2000 US Census data – 680,369 total under 18 population for Arkansas). During FY2000, Community Mental Health Centers served 20,119 children and adolescents under the age of 18 years. This low number is attributed to limited financial and human resources available for children’s community-based mental health service delivery.

Service gaps can have serious consequences for children and families. A recent article (July 9, 2001) in the New York Times, Children Trapped by Gaps in Treatment of Mental Illness, finds “The problem is so widespread that it has prompted recent lawsuits demanding more outpatient treatment in states from New York to Idaho to California . . . . Mental health advocates also mention the effect of managed care on mentally ill children. Private managed care, experts say, tends to reduce coverage for mental health, and parents often wait too long before seeking help. In some states, managed care programs for children covered by public money have so cut the amount of treatment received that state governments have abandoned programs.”

Mental Health: A Report of the Surgeon General states, “In recent years, managed care has begun to introduce dramatic changes in to the organization of financing of health and mental health services . . . . There is little direct evidence of problems with quality in well-implemented managed care programs, yet the risk for more impaired populations and children remains a serious concern.”

The National Mental Health Association’s publication Best & Worst Practices in State Children’s Health Insurance Programs reports “in an effort to reduce costs, an increasing number of public sector managed care systems are implementing processes to limit access to treatment.”

All of the previous sources underscore the importance of access to care and the need to work on eliminating service gaps.

During the recent 2001 Arkansas Legislative Session, several interim studies were introduced which will examine more closely current public mental health policy. The Mental Health Council of Arkansas looks forward to working, in particular, with the Interim Study on Children’s Mental Health Services and the Interim Study of the RSPMI Prior Authorization Process for Adult Mental Health Services. It would seem prudent to utilize the information obtained in these studies to address the weaknesses identified before implementing a system that likely serves only to make fewer dollars available for direct patient care.

We believe Arkansas is moving in a questionable direction in attempting to manage outpatient mental health services for children and adolescents. There currently exists a prior authorization process for in-patient and residential services for the Medicaid U-21 population. Perhaps, should the Department of Human Services (DHS) feel the need to manage care for out-patient mental health services, managing by outliers versus the proposed management of routine mental health services would best serve children and families.

The Mental Health Council of Arkansas is not opposed to a utilization review process that insures appropriate access to necessary services for children and adolescents; however, the process currently utilized in the RSPMI (Rehabilitation Services for Persons with Mental Illness) prior authorization process for adults is cutting payments for necessary and appropriate services to our public mental health system. It has increased the administrative costs to Community Mental Health Centers (CMHC) significantly due to the paperwork and cumbersome nature of these types of utilization review processes.

The Department of Human Services and its network of community mental health providers are responsible for providing necessary services to persons with mental illness. If Medicaid dollars are not used to help pay for service obligations, then the State must pick up the costs. It defies logic to implement a program, which reduces legitimate federal dollars to programs for which the State and DHS are ultimately responsible.

There are serious questions whether managed care for children and adolescents in the public mental health system will, in fact, save Medicaid costs to the extent that the State anticipates. In reality, any savings that might result have likely already been realized with the prior authorization process that Arkansas currently has for inpatient and residential treatment for the U-21 Medicaid population. While some plans have significantly cut costs through proper utilization of inpatient services, this may represent a one-time reduction in the level of expense and will not yield additional savings in the future. (Dangerfield, D., & Betit, R.L. (1993, Fall). Managed Mental Health Care in the Public Sector. New Directions for Mental Health Services, 59; and Callahan, James J.,et al. (1994). Evaluation of Massachusetts Medicaid Mental Health/Substance Abuse Program. Waltham, MA: Brandeis University.)

The Research and Training Center for Children’s Mental Health released its findings on managed care and the impact it has on children’s mental health services. The research, Health Care Reform Tracking Project: Tracking State Managed Care Reforms as They Affect Children and Adolescents with Behavioral Health Disorders and Their Families – 1997 Impact Analysis, was conducted nationwide to determine the effects of managed care on children with emotional and behavioral disabilities. In general, the research focused on impact of design and structural characteristics of managed care reforms, service delivery, family and youth involvement, impact on providers, cultural competence, and finance and accountability issues. Researchers also considered new patterns of service delivery, how families access services, what services were likely to be provided, and the effect on interagency development of a system of care within communities. They also looked at cost savings and whether the reforms reduced family involvement in planning for services for their children.

Many of the findings are alarming, as illustrated by those highlighted below:

• The anticipated cost savings often were not realized despite the assumption that managed care saves money. In addition, the research revealed that a family’s ability to access crisis care was reduced and that youth with serious or long term needs were more likely to be shifted between systems (e.g., child welfare, juvenile justice) after initial interventions.

• Where there had been movement toward family centered services, after the implementation of managed care processes, services often reverted to only child-centered, with no involvement with the family. Office based services became more apparent with managed care, as opposed to serving the child and family in their most natural environment, such as home and school.

• Most states in the sample designed their reform efforts to provide brief, short-term service only, leaving extended care to other systems, thus cost shifting to other public sectors.

• In all states in this sample, behavioral health prevention services were not integrated into managed care reforms. It also was reported that while managed care is improving early identification and intervention for physical health problems, this does not prove to be the case with behavioral health problems.

When health care reform began, there was already an extensive body of knowledge about best practices in mental healthcare for children and adolescents with emotional and behavioral disorders. However, in the fast paced environment of managed care, it is often possible to lose sight of what is already known about how to provide services, as the previous points indicate.

In contrast, the Surgeon General’s Report on Mental Health emphasizes that the multiple problems associated with “serious emotional disturbance” in children and adolescents are best addressed with a systems approach in which multiple service sectors work in an organized, collaborative way. Research on the effectiveness of systems of care shows positive results for systems outcomes and functional outcomes for children. Moreover, as stated earlier, the risk for children and managed care remains a serious concern.

There exists tremendous opportunity in Arkansas to examine more closely mental health service availability, identification of gaps and barriers to services, and make recommendations for the improvement of mental health services to children and families through the Interim Study on Children’s Mental Health Services. The CASSP Coordinating Council is also working with Regional Planning Teams in each of the Community Mental Health Center’s catchment areas to formulate a plan to address identified needs and barriers, including addressing public policy issues that impact the accessibility of appropriate mental health services for children, adolescents and their families.

It is the consensus of the Mental Health Council of Arkansas that the State should be focusing concerted efforts on developing a unified infrastructure to enhance accessible mental health services for the children of Arkansas and their families. It is equally important that any approach utilized support best practices and thus improve outcomes for children and families. It is unfortunate that the Department of Human Services is moving to limit access to mental health treatment for this most vulnerable population rather than exploring ways to increase service accessibility.

We, again, urge the State to not act hastily in requiring a prior authorization process for outpatient mental health services for Medicaid eligible children prior to studying the results and recommendations of the Interim Study on Children’s Mental Health Services, as well as the Interim Study for RSPMI Prior Authorization Process for Adult Mental Health Services.