HELENA, Mont.-Montana's passing familiarity with mental health managed care may end as quickly as it began.Last year, Montana embraced managed care to cut the costs of mental health services for low-income residents. In the 17 months since, three companies have managed the Mental Health Access Plan. High-ranking state officials such as Senate Minority Leader Mike Halligan (D-Missoula) have called the plan a disaster.
The state medical and hospital associations have called for terminating the state's contract with the third management firm, Atlanta-based Magellan Health Services Corp. And Montana's daily newspapers have used their editorial pages to condemn the plan.
The plan should have been manageable based on numbers. In a state with a population of 900,000, only 30,000 people-or about 3% of residents-are managed-care enrollees.
By comparison, California's managed-care penetration is close to 60%. Yet the MHAP lost $15.7 million in its first year of operation, on a budget of about $75 million.
Finger-pointing abounds. State officials trace the difficulties to the original contractor, CMG Health of Owings Mills, Md., which quickly fell behind on claims processing and had problems providing care in more rural parts of the state.
What's more, CMG "engaged in poor communications and had a bad attitude," according to Randy Poulsen, chief of the managed-care bureau of the Montana Department of Public Health and Human Services.
When Park Ridge, N.J.-based Merit Behavioral Care purchased CMG about three months into its contract, most participants were willing to offer managed care a second chance. But when Magellan acquired Merit last February as part of an ambitious plan to get into the managed-care end of mental health services, "any goodwill that was left had been squandered," Poulsen said.
Magellan is in a joint venture to manage the MHAP with Montana Community Partners, a group of providers. MCP is governed by an 18-member board of providers, consumers and government officials.
Magellan, which has attempted to contain losses since its takeover and has spent more than $1 million to adapt claims and data to its computer system, believes the state should take its share of the blame.
"There were some serious flaws in the governance structure of the program and some serious flaws in benefits design," said Richard Orndoff, chief operating officer of Magellan's public-sector division.
MCP has created a governance problem by appointing eight behavioral health providers to its board, he said.
"You have trustees in an untenable position of being asked to vote for actions (such as reducing reimbursements) that may affect the organizations where they work," he said.
One of the biggest problems, said Orndoff, is the program's eligibility requirement. A household earning up to 200% of the federal poverty level-about $23,000 for a family of three-is entitled to benefits. Although that might limit the pool of applicants in a wealthier state, 40% of Montana's residents qualify. So, Magellan is providing mental health treatment for more than 5,500 Montanans not covered by Medicaid.
Magellan has responded by suggesting curbs on higher-end benefits, such as children's services and substance-abuse rehabilitation-cost-control moves that have become a staple of managed-care providers. But the MCP board rejected the move, and Magellan was roundly criticized in the media.
"We Montanans pay this corporation, and now we should foot the bill for its cost overruns?" asked the Billings Gazette in a recent editorial. "Magellan may not be here to stay. But our children will be with us for a lifetime."
Poulsen conceded that managed care has not been practiced much in his state, but he insisted providers are willing to deal with the realities. "Implementation has been the problem here," he said.
Observers such as John Tiscornia, Seattle-based partner in charge of the western region healthcare practice of Arthur Andersen, believe that Montana's minimal exposure to managed care and the independent streak of its physicians and residents may stoke a lack of interest among providers.
"The providers are not in a good position to be able to quickly change care or reimbursements," Tiscornia said. "It's a process that would take some time and patience."
As the unrest fomented by Magellan's cost-cutting and the public distrust of its program grow, observers say Montana's first big plunge into managed care will end soon.
In its place will be something familiar. "Our contingency plan calls for us to manage mental health benefits on a fee-for-service basis," Poulsen said.