The 131st Annual Meeting (November 15-19, 2003) of APHA

Abstract #72549

Constance M. Horgan, ScD¹, Deborah W Garnick, ScD¹, Dominic Hodgkin, PhD², and Elizabeth L. Merrick, PhD, MSW¹. (1) Schneider Institute for Health Policy, Heller Graduate School, Brandeis University, 415 South Street, MS 035, Waltham, MA 02454, 781-736-3916, horgan@brandeis.edu, (2) Schneider Institute for Health Policy, The Heller School for Social Policy and Management, Brandeis University, 415 South Street, MS 035, Waltham, MA 02454

Managed behavioral health organizations (MBHOs), a major mechanism for the delivery of ADM services, covered 164 million individuals in 2002. Privately insured individuals interface with MBHOs along two different pathways: 1) through their health plans contracting out ADM to these specialized vendors, or 2) by employers directly contracting with MBHOs, thus removing responsibility for the delivery of specialty ADM care from the health plan. The goal of this paper is to contrast the provisions of these two types of MBHO contracts along a variety of dimensions, including benefits, contract functions, risk-sharing arrangements, and use of performance standards. Two national surveys collecting information for the 1999 benefit year are used: 1) a telephone survey of the top three commercial products in 400 managed care plans (92% response rate), and 2) a mail/telephone survey of Fortune 500 companies (76% response rate). Among Fortune 500 companies, 37% contracted with MBHOs. Among managed care plan products, 82% of HMOs, 62% of POSs, and 31% of PPOs contracted out ADM services to MBHOs. There are important differences between these two types of MBHO contracts. For example, most managed care plan contracts pay vendors on a fully capitated basis (88 %), although most include provisions to share vendors’ profits or cap their losses. By contrast, most large employers contracts do not put the vendor at any risk (68%). The various ways in which contracts are structured and administered are discussed in terms of the implications for access to ADM services and integration with medical care.

Learning Objectives:

• to understand different pathways to MBHOs
• to identify major differences between employer and health plan contracts
• to explore implications for access to care

Keywords: Carve Outs, Managed Care

Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.