PUBLICATIONS |
TESTIMONY ON BEHALF OF MENTAL HEALTH LEGAL ADVISORS COMMITTEE BEFORE THE NATIONAL COUNCIL ON DISABILITY November 20, 1998 Mental Health Legal Advisors Committee (MHLAC) is an agency with the Massachusetts Supreme Judicial Court. Its mandate is to provide information to the public on mental health legal matters and to represent low-income persons with or perceived as having mental illness. In this capacity, MHLAC has monitored the implementation of Medicaid managed care in Massachusetts since its inception in 1992. Massachusetts has one of the largest mental health carve-out programs in the country and recently expanded the management responsibilities of its single carve-out contractor to include acute care services for uninsured Department of Mental Health clients. Massachusetts is now seeking to increase the portion of the Medicaid population covered by HMOs. Accompanying this testimony is a series of articles based upon our observations, and which include statistical analyses supporting our conclusions. Two things are clear: 1. Privately managed care has changed the course of treatment for persons with mental illness due to the financial incentives inherent in a for-profit, capitated, closed network system. Many services have been cut, e.g. therapy, while administrative costs have increased. 2. The Commonwealth is unwilling or unable to effectively monitor the impact of privately managed care. This problem will be exacerbated as the Commonwealth moves away from a carve-out to greater reliance on multiple health maintenance organizations to provide recipients mental health services. MHLAC believes that, because of the financial incentives inherent in privately managed care, such a system is anathema to clinically-based, quality mental health services. Rather, MHLAC supports a system of care that is coordinated by a public entity that is accountable to those it serves and the electorate. FINANCIAL INCENTIVES Capitation Capitation, the payment of a fixed fee per recipient to provide all the services that a recipient needs, necessarily leads to service cuts. While some managed care companies claim that it would be foolish of them in the long-term to underserve clients, one health care industry representative noted that private corporations look at their quarterly returns, not at long-term results or individual cases. Rather, as we have seen in Massachusetts, services are cut based on financial, not clinical, considerations. The amount of therapy each individual receives has been slashed, and greater reliance has been placed on medication services (medications are not paid for by the managed care company).(1) A 15-minute medication session once a month is much less expensive than weekly therapy. Closed Network Providers, off-the-record, have repeatedly stated that they fear retribution from the managed care company if they criticize, directly or indirectly, the decisions of the MCO or if they provide "too many" services. Retribution may come in the form of reduced referrals or loss of the contract. The MCO operating in Massachusetts has stated publicly that they do not wish to micro-manage providers, but expects them to manage their own services. The MCO compares the amount and cost of services rendered by each provider to the provider norm. The result is that providers are themselves limiting care and do not appeal utilization review decisions even when they do not agree with them.(2) Persons with mental illness can no longer look to their clinicians to be advocates for their service needs. Rates The rates paid to providers by the MCO affect both the types of services rendered and the quality of care. Early in the Massachusetts experience, the MCO said that it wanted to switch persons from individual to group therapy. It changed the rates it paid providers for these services to make it more lucrative for them to provide group therapy than individual therapy.(3) Unsurprisingly, the pattern of care amongst providers changed as the MCO desired. The quality of care is also affected. Managed care has put financial pressures on providers, who have cut staff, employed less educated staff, and foregone staff training. The remaining staff have a higher case load, and thus have less time to spend with their patients. Collateral contacts are infrequent and fast becoming a thing of the past. Hurried interaction and even human rights abuses are facilitated by a system with too few staff who can take the time to listen to a client's needs and respond appropriately. Performance standards Contractual performance standards have failed to reign in the financial incentives inherent in private, for-profit, managed care. FY98 performance standards were flawed. For example, one performance standard awarded the MCO for keeping seven-day recidivism rates at or below 5%. However, recidivism rates measured readmission for the same diagnosis.(4) Doctors admitted that diagnoses were changed to reflect lower recidivism rates. FY99 performance standards are also flawed. Essentially, the standards award the MCO for services that were promised to the Commonwealth in its bid that resulted in the contract. For example, the standards reward the MCO for ensuring that 75% of mental health discharges receive aftercare within seven days of discharge. Yet, in its bid, the MCO stated: "MBHP case management protocols assist in ensuring that appropriate linkages are made during the referral and follow-up processes and across all levels of care. . . . [R]eviewers, case managers and providers will take measures to verify that an outpatient provider has been scheduled to see the patient within three days of discharge."(5) The high administrative costs associated with privately managed care are not buying high quality management as promised. The Commonwealth states that it had to increase bonuses because it reduced the amount of money the company could retain if it cut services.(6) The result is that services continue to be cut. No private company would risk loss or forego the opportunity to make two million dollars and the Commonwealth awards the MCO for performing already promised administrative services. Monitoring Privately Managed Care In this age of public scrutiny as to how tax dollars are spent, it is befuddling how little the Commonwealth knows about the performance of it Medicaid contractors. One independent study of the privatization of Medicaid mental health management was performed in 1993. That study, while providing valuable information, failed to fully address such basic issues as access to services.(7) Since then, no independent analysis has been performed by Medicaid. Indeed, the lack of information was so glaring that the legislature required the Division of Medical Assistance to file quarterly reports with the Ways & Means Committee. DMA filed its first report more than seven months late. It contained outdated information and was essentially a photocopy of MCO reports.(8) No consumer satisfaction survey has been performed. Despite a considerable amount of time the first contracted MCO spent on devising such a study, the current MCO is going to be paid a bonus for a second round of planning in FY99. The actual completion of the survey is nowhere in sight. Records of appeals to the MCO, HMOs, and Medicaid are not informative. Providers do not appeal for the above-stated reasons. Clients do not appeal because many do not understand the role of managed care in their providers' care recommendations or because they do not have the wherewithal to pursue appeals.(9) A testament to the Commonwealth's inability to monitor privately managed care is its inability to compare the performance of the first MCO with the current contractor. Because the first MCO kept its claim data on the basis of the type of provider rendering the service, not the service rendered, DMA can not compare that data to that of the current contractor, which keeps its claims data on the basis of the service rendered. This problem will only be exacerbated by an increase in the number of clients served by HMOs, each of which has its own information system. Conclusion Anecdotal evidence and analysis of the limited data available raise cause for concern. A Local 509 SEIU survey of Department of Mental Health workers showed that more than half thought quality of care had declined under the current MCO. A survey of non-DMH providers by a Suffolk University professor found that almost one-third of the providers surveyed felt that the quality of clinical care had suffered under managed care.(10) Workers at community residences say that clients are being discharged from hospitals much sicker and that the residences are becoming more like inpatient units and adopting restrictive policies. Parents complain that they can not access acute services for their children. Recipients complain that they are being pushed on medications with side effects at the same time their therapy is being cut. Administrative costs continue to rise. Privately managed care, if it has cut overall costs,(11) has done so at the expense of quality mental health care services. The failure of government to attempt to monitor managed care is disgraceful. The ability of government to control multiple private companies with the financial incentive to cut services is questionable. The lack of political will to stop this runaway train would be inexcusable. The National Council on Disability should support legislation to prohibit all forms of capitation and risk-sharing that induce managed care companies and providers to cut services. The National Council also should pursue legislative and regulatory paths to prohibit any new Medicare and Medicaid forays with privately managed care. At the very least, the National Council should recommend:
ENDNOTES (1) Fendell, MHMA Wrapping Up; Partnership Starting Up , 46 Advisor 1, 2 (1997). Back (2) Another reason providers do not appeal utilization review decisions is because of the amount of time it takes to appeal them and the apparent futility of appealing a decision to the decision-maker. Back (3) Fendell, Mental Health Managed Care: Service Expenditures Down, MHMA Profits Up, 39 Advisor 14, 31 (1993); see also, supra n.1 at 4. Back (4) Fendell, MHMA Wrapping Up; Partnership Starting Up , 46 Advisor 1, 13 (1997). Back (5) Massachusetts Behavioral Health Partnership, Response to Request for Proposals, Access and Availability-2 (Nov. 10, 1995). Back (6) Fendell, Year One of the Partnership: What a Performance , 47 Advisor 1, 19 (1997). Back (7) The study was issued in January 1994. Fendell, Mental Health Managed Care: MHMA Report Card Mixed, Conflict Between Profits and Consumers, 40 Advisor 4 (1994). Back (8) Fendell, Waiting for DMA Reports in Partnership/Medicaid Managed Care Update, 48 Advisor 1, 3 (1998). The second report filed again contained information more than six months old. Executive Office of Health and Human Services, The Division of Medical Assistance, Department of Mental Health, Behavioral Health Program, Quarterly Report to the House and Senate Committees on Ways and Means (Oct. 1998). Back (9) Improved appeal rights are often cited as a means to control the financial incentives of managed care companies. While appeal rights are basic to due process, such rights often amount to paper niceties because their pursuit depends on self-advocacy by persons who are physically or mentally ill. Furthermore, the success of appeals depends on the medical support of the same providers who are financially dependent upon the MCO or HMO. Back (10) Richard Beinecke, Mental Health Providers Assessment of the Massachusetts Managed Mental Health/Substance Abuse Program: Year Five, December 1997, at 25. Back (11) There is a question as to whether the amount of savings alleged by Administration and other sources is accurate. Savings are often based on dubious assumptions concerning projected costs and projected client population, and fail to include administrative costs incurred by governmental agencies that oversee private contractors as well as those paid directly to private entities. See, e.g., Fendell, Mental Health Managed Care: MHMA Report Card Mixed, Conflict Between Profits and Consumers, 40 Advisor 4, 8 (1994). Back |