Bridging Medicaid's medical and behavioral care chasm

(This article has been updated with a correction.)

On April 1, Mercy Maricopa Integrated Care, a not-for-profit entity sponsored by Mercy Care Plan and the state of Arizona's publicly funded Maricopa Integrated Health System, began coordinating medical treatment with behavioral care and substance-abuse services for Medicaid beneficiaries in the Phoenix area who suffer from serious mental illness.

Under the new program, which is part of a CMS demonstration, 17,000 plan members diagnosed with serious mental illness in the state will have two options for receiving care. They can choose to receive physical and behavioral-health services from different providers that share patient information through a health-information exchange managed by Mercy. Or they can visit clinics offering medical and behavioral care under one roof.

Policymakers, providers and health plans around the country are experimenting with ways to better coordinate medical and behavioral care, which traditionally have operated with little or no coordination, resulting in higher costs and poorer quality of care. A driving force behind the experiments are statistics showing that patients with both chronic medical conditions and mental illness and/or substance-abuse problems account for a large share of total Medicaid spending. The Mercy model is being touted as one of the largest programs in the country to integrate these previously siloed services.

The hope is that better integrating medical and behavioral services will produce better health outcomes while reducing the total costs of treating these medically complex and expensive patients. That quest has become especially urgent now that the Patient Protection and Affordable Care Act has brought millions of additional low-income adults into the Medicaid program.

The Mercy program, in Arizona's Maricopa County, provides its participants with a care team that helps coordinate doctors' appointments, assists with medication management, and develops and monitors individual care plans, based on recommendations from both medical and behavioral-health providers. The CMS demonstration seeks to test whether integrating care through a single organization will reduce hospitalizations and yield Medicaid cost savings.

“If we can take those individuals (with serious mental illness) and really focus on bringing coordinated physical health and behavioral health to those individuals with one responsible entity, we believe we can get improved health outcomes in a much more timely manner and a much more coordinated manner,” said Cory Nelson, deputy director for behavioral health at the Arizona Department of Health Services.

Ten states have launched, or plan to launch, similar projects under the CMS' Financial Alignment Initiative, a demonstration project testing the coordination of benefits and care, including behavioral services, for people who are dually eligible for Medicaid and Medicare. Unlike initiatives targeting dual-eligibles in general, however, Arizona's program focuses more narrowly on Medicaid beneficiaries and dual-eligibles diagnosed with serious mental illness.

Another major reason for the growing interest in better care coordination is Medicaid's role as the nation's single largest payer for mental-health services, accounting for 27% of the $155 billion spent on behavioral healthcare in the U.S. in 2009, according to a 2012 report by HHS' Substance Abuse and Mental Health Services Administration. About 35% of the country's more than

50 million Medicaid beneficiaries have some form of mental illness, according to a 2012 report by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured. Of those beneficiaries, 61% also have a chronic physical condition.

In addition, most of nation's estimated 1.2 million homeless adults are now eligible for Medicaid coverage, according to the Center for Health Care Strategies. Many homeless people suffer from both chronic medical conditions and mental illness and/or substance-abuse problems.

Those with both physical and behavioral healthcare needs have long been recognized as among the most complex and most expensive patients to treat. Adults with serious mental illness tend to have higher rates of chronic conditions such as cardiovascular disease and diabetes, and die an average of 25 years earlier than those without such comorbidities, according to a 2006 report from the National Association of State Mental Health Program Directors.

While experts long have urged better care coordination, medical and behavioral-health providers have not traditionally worked together closely. One reason for the disconnect is the fragmented fee-for-service payment model, in which primary-care and behavioral-health clinicians do not communicate or collaborate. On top of that, medical and behavioral-care providers serving Medicaid patients are often understaffed and underpaid, with little time to carry out comprehensive care plans for their challenging patients.

As a result, many Medicaid beneficiaries with serious mental illness or addiction end up in hospital emergency departments. “Before (integration), you may have had a primary-care physician who ordered a patient medication for diabetes and they might not have had any clue what that individual was taking for their behavioral-health condition,” said Nelson of the Arizona Department of Health Services. “And they wouldn't have necessarily known who to call unless that patient self-disclosed that they had a behavioral-health issue.”

That's why state Medicaid programs increasingly are developing integrated-delivery models to encourage collaboration between physical and behavioral-healthcare providers, overseen by managed-care plans paid under performance-based contracts. “Providers are being held accountable for patient outcomes, and when you're accountable for patient outcomes, either as a provider or as a health plan, you simply cannot ignore the interaction between physical health and behavioral health challenges,” said Deborah Bachrach, a partner at the law firm of Manatt, Phelps and Phillips and former Medicaid director for the state of New York.

But health plans and providers still face numerous challenges in coordinating physical and behavioral services. Medicaid's traditional fee-for-service payment model, coupled with traditionally low reimbursement rates for behavioral-health services, has worked against providers attempting to integrate their services, according to a February report from the Kaiser Commission on Medicaid and the Uninsured. Even in states that have implemented Medicaid managed-care programs, behavioral care often is carved out from medical care and delivered by separate providers through a separate payment stream, Bachrach said. “States are starting to think about how to do a more cohesive purchasing strategy,” she said.

Another barrier to service integration is a Medicaid policy that will not allow providers to be paid separately for medical care and behavioral healthcare delivered in the same patient visit. For example, if a patient receives a physical exam from a physician and counseling from a psychologist, Medicaid will not pay separately for the two services. “If you're talking about good integration and good care coordination, it becomes a barrier if a patient has to come back the next day,” said Laura Galbreath, director of integrated health solutions for the National Council for Community Behavioral Healthcare.

Federal and state privacy rules create further hurdles, restricting the sharing of patient information between medical and behavioral-health providers. Without such sharing, the risks increase for duplicated services and adverse patient outcomes, such as incompatible medication prescriptions.

Many types of inflexible rules can get in the way of coordinating care. For nearly two years, Dr. Cara Christ, chief medical officer for the Arizona Department of Health Services, worked on revising state rules to allow behavioral-care providers to deliver services at medical-care sites. “For years in Arizona, you could either be a behavioral-health institution or you could be a physical-healthcare institution,” she said. “You weren't allowed to do the same thing in the same building to the same patient.”

A plan similar to Arizona's integrative model was launched last June in Florida, where Magellan Health Services started a Medicaid specialty plan in the Fort Lauderdale area for beneficiaries diagnosed with serious mental illness. Under Magellan's Complete Care Medicaid plan, a case manager works with medical and behavioral-health providers to establish a personalized care plan for each patient. A health navigator helps patients schedule and arrange transportation to doctors' appointments, as well as coordinating assistance with social service agencies. In July, the program is scheduled to expand to 40 of Florida's 67 counties.

Dr. Charles Cutler, chief medical officer of the Magellan Complete Care plan, said the goal is to eliminate barriers that have kept providers from taking a more collaborative approach. “People tend to practice in their own domains,” he said. “Even though the benefits may be obvious, there really hasn't been an incentive for people to think about (providing care) more broadly.”

In Pennsylvania, Penn Foundation Behavioral Health Services, a community mental-health center in Sellersville, participated in a two-year demonstration project that began in 2009 called HealthChoices HealthConnections. The project was a collaboration between three counties in southeast Pennsylvania, Magellan Health Services and Keystone Mercy Health Plan, now called Keystone First, the state's largest Medicaid managed-care plan. The collaborators sought to provide a coordinated, team-oriented approach to care that would reduce costs for Medicaid beneficiaries with both chronic medical conditions and serious mental illness.

The demonstration project significantly lowered costs through reduced hospital utilization, said Angela Hackman, director of integrated health services for Penn Foundation Behavioral Health Services. For the 100 patients served by her center under the demonstration, emergency department visits decreased by 11%, compared with the six-month period before the program started. Hackman credits much of that success to providers' shared access to patient medical and behavioral-health information through Magellan and Keystone. While the program continues to operate in southeast Pennsylvania, Hackman said it's unclear whether it will be expanded statewide.

Bachrach said states have the power to promote tighter integration of physical and behavioral-health services. But she and other experts say such changes are only in early implementation stages in many states, and it's likely to take years to achieve full coordination. “I see more states taking a hard look at how they can purchase and regulate to enable providers to deliver integrated care,” she said.

Follow Steven Ross Johnson on Twitter: @MHsjohnson

(This article has been updated to indicate that Mercy Maricopa Integrated Care began coordinating medical treatment with behavioral care and substance-abuse services for Medicaid beneficiaries in the Phoenix area who suffer from serious mental illness.)