Has cliff diving lost its thrill for you? Is ennui creeping into those ski runs down the super giant slalom?
Why not try something really exciting? Sign a capitated Medicaid mental health contract.
"In the beginning, it was scary," said Alan Shusterman, president of CMG Health, an Owings Mills, Md.-based managed behavioral health plan. CMG manages care for 45,000 Medicaid recipients under capitated contracts.
Bidding on such business can be a shot in the dark because of the lack of good data on the Medicaid population and its utilization of mental health services.
However, Medicaid is becoming an increasingly larger revenue stream for hospital systems, according to the National Association of Psychiatric Health Systems, a Washington-based trade group. In 1992, Medicaid accounted for 9.2% of admissions to psychiatric hospitals, up from 7.5% in 1991.
Those figures are even more dramatic given that in some states psychiatric hospitals aren't allowed to treat Medicaid patients between the ages of 22 and 65.
That could change as more states award capitated contracts to psychiatric providers and managed mental health firms. As Medicaid costs increase, many states are looking for ways to control them through capitation of private providers. Massachusetts has such a program already, and other states-notably Colorado, Florida and Connecticut-are following.
Medicaid is a "dramatically appealing book of business," said William Hale, vice president of the nation's largest psychiatric hospital chain, Charter Medical Corp. He made the comment at NAPHS' annual meeting last month in San Diego.
Howard Gershon, executive vice president for Lammers and Gershon, a Reston, Va.-based consulting firm to psychiatric systems, said, "(Hospitals) see Medicaid becoming a viable reimbursement, especially under healthcare reform."
Yet, this isn't a business for the faint of heart.
"Initially we got our clocks cleaned; we lost incredible amounts of money," said Francis X. Selgrath, president and chief executive officer for Mustard Seed, a Bensalem, Pa.-based managed behavioral healthcare firm that provides mental health services to 100,000 Medicaid recipients in the Philadelphia area.
Mustard Seed started out with 3,500 enrollees in its first Medicaid contract in 1988, and "it took three years to get a handle on costs," Mr. Selgrath said.
The company contracts with Health Partners, a six-hospital system in Philadelphia, to provide behavioral health services through one of four Medicaid HMOs in the Philadelphia area. Mustard Seed is paid by the number of enrollees who sign up for its HMO.
Medicaid HMO business will account for $18 million in Mustard Seed's revenues this year. Mr. Selgrath declined to provide the per-enrollee figures.
As more hospitals survey the Medicaid HMO business, Mr. Selgrath is a seasoned warrior with advice.
The good news is the growth has been non-stop. "We're continually looking for more office space, more chairs, more telephones," he said. For example, Mustard Seed recently was approved to provide services for a second Medicaid HMO in the area, which will add another 8,000 recipients.
The bad news, however, also is that the growth is non-stop. Unlike a commercial HMO, which can stop taking enrollees to catch up with the business, a Medicaid HMO might have a surge of enrollees in a single month who can't be turned away.
What's more, "You have a whole crew of people who are your members and then suddenly they're not your members," he said. "You have to make sure a patient doesn't get dropped because he got a job for three weeks."
To ease some of the uncertainty, Connecticut, whose Medicaid budget jumped 29% last year, is looking for consultants to help state officials design a capitated mental health program. They're offering to pay $235,000 to find out what they don't know about their Medicaid mental health program, and then figure out how to control its costs.
Even such basic information as how many Medicaid recipients now receive mental health services would be a guess, said Sheila Amdur, the state's senior policy adviser for healthcare reform.
New Orleans-based Ramsay Health Care is preparing a bid for a Medicaid contract in the Tampa, Fla., area. It's estimated to be worth from $20 million to $25 million annually. Greg Browne, president of the 18-hospital system, acknowledged it's difficult to make a bid when data is often faulty.
"You can make some estimates and put in some risk sharing (into the bid proposal)," he said.