a public-private sector venture in managed mental health: solano county's experience

Administration and Policy in Mental Health Vol. 22, No. 3, January 1995

A PUBLIC-PRIVATE SECTOR VENTURE IN MANAGED MENTAL HEALTH: SOLANO COUNTY'S EXPERIENCE

Gale Bataille, M.S.W., Ken Anderson, M.F.C.C., and Susan Penner, Dr.P.H.

A B S T R A C T : The authors describe a pilot demonstration project in Solano County that is implementing a managed care system for its Medicaid eligible clients. The project is a collaboration between county mental health officials, the Solano County Health Plan (the capitated medical plan for Medicaid benificiaries), and U.S. Behavioral Health, a private managed mental health care corporation which provided technical assistance for the rapid implementation of a managed mental health carve-out for inpatient and outpatient services. Also discussed are the training and technical assistance issues related to establishing managed care systems, as well as problems faced during the start-up phase.

Solano County, California is located between the San Francisco Bay Area and the state capital of Sacramento. The county has three cities of over 75,000 residents each, and is in transition from primarily rural and agricultural to mixed urban and suburban rural communities, with a total population of 360,*000. Ethnic groups account for 40% of the county's population, with the largest groups comprised of African-Americans, Hispanics, and Asians/ Filipinos. An average of 40,000 persons in the county are eligible for Medi-Cal (California's Medicaid program) per month.

Gale Batallle is the Local Mental Health Director, and Ken Anderson is the Managed Care Administrator, both with the Solano County Department of Health and Social Services. Susan Penner is NIMH Postdoc- toral Fellow at the University of California, Berkeley.

The authors are grateful to Sheila Baler, Ph.D., Vice-President of Managed Care, and Ed Cohen, L.C.S.W., Assistant Director of Care Management, both with U.S. Behavioral Health, for their assistance in this study.

Address for correspondence: Gale G. Bataille, Mental Health Director, Solano County Department of Health and Social Services, 1735 Enterprise Dr., Building 3, Fairfield, CA 94706.

327 �9 1995 Human Sciences Press, Inc.

328 Administration and Policy in Mental Health

The Solano County Mental Health Divison (mental health department) provides an array of mental health services directly and via provider contracts. Public mental health expenditures for fiscal year 1993 were approximately $15 million; when the county assumed responsibility for fee-for-service Medi-Cal the budget increased to $18 million. Nearly $4 million is allocated for 36 state hospital beds (reduced from 59 beds in 1989); another $1.2 million is spent on beds in Institutions for Mental Diseases (IMDs) and in skilled nursing facilities (SNFs). The county provides residential care, psychiatric crisis services, case management, day treatment, consumer self-help, medication management and other community-based programs in order to offer a "system of care" that ensures a continuum of support services for prevention, acute and follow-up levels of care. Services are provided regardless of ability to pay; of the approximately 4:,000 clients seen each year, about half are covered by Medi-Cal (Anderson, 1993a).

All of these institutional and community-based services are supported by a dedicated sales tax, county general funds, and California's Short-Doyle Medi- Cal funds (the state's reimbursement system for hospitals, clinics, and other services that are administered by county mental health departments). County general fund revenues allocated to mental health serve as a 50 % match for its Federal Financial Participation (FFP) share of Medicaid funding. The federal share for Medi-Cal amounted to $1.8 million in fiscal year 1993, and is projected to increase by about 15% in 1994. In addition, Medi-Cal fee-for- service (FFS) expenditures for inpatient psychiatric services for Solano County beneficiaries amounted to $2.1 million in 1993, and reimbursement for outpatient FFS services to about $850,000. During fiscal year 1990, FFS care was provided to 2,179 individuals, 447 of whom also received Short-Doyle services (Anderson, 1993a).

A statewide fiscal crisis combined with calls for mental health system reform has created opportunities for fundamental change in the organization and financing of county mental health. The timing of external change processes and the vision of local leaders resulted in collaboration between county health and mental health administrators, as well as between the public and private sectors. In 1990, the current county mental health director was appointed and began reorganizing the mental health system by expanding community services (which had been almost non-existent), assigning professional staff to the county's two psychiatric Crisis Centers and designating these facilities as gatekeepers for hospital admissions, establishing clinical case review protocols, developing brief therapy programs, and for the first time, involving consumers and families in planning and providing services. The director, through the County Mental Health Director's Association, was also active in efforts to design state policies that led to the realignment legislation of 1991, and a plan for managed mental health carve-outs. Beginning July 1, 1993, the county participated in the Short-Doyle Rehabilitation Option that expanded r e i m -

Gale Bataille, Ken Anderson, and Susan Penner 329

bursement of community services, and adopted the Coordinated Services program, which was a precursor to managed care as it required that an assigned coordinator develop a treatment plan for all Short-Doyle services that each client receives.

Solano is the first county mental health program in California to manage all Medi-Cal funded (FFS and Short-Doyle) care for both inpatient and outpatient services, beginning May 1, 1994; it is also the first county in the state to contract with a private managed mental health care firm for assistance in developing this new model. This collaborative venture also represents the first time the for-profit managed mental health care firm, U.S. Behavioral Health, has contracted with a county system to implement managed care for Medicaid beneficiaries. By serving as a pilot demonstration for implementing managed mental health care, Solano County mental health has identified technical assistance and training issues that affect county staff, providers in network contracts, consumers and families.

The format of this article reflects the following objectives: (1) to trace the events and decisions leading up to a managed mental health care "carve-out" by the county mental health department, in collaboration with the county's Solano Partnership Health Plan and U.S. Behavioral Health; (2) to identify areas of training and technical assistance relevant to the implementation of managed care for public sector populations; and (3) to note future issues beyond the implementation of managed care.

SOLANO'S MANAGED MENTAL HEALTH MODEL

The Solano Coalition for Better Health was established in 1988 by local physicians, hospital administrators, and community-based service organizations to address health care access problems for the growing numbers of uninsured and under-insured persons in the county. In 1991, the Coalition developed a proposal for the Solano Partnership Health Plan which organized a network of local physicians, clinics, medical groups and hospitals to care for Medi-Cal beneficiaries; the start-up date for this managed health care plan was May 1, 1994. The Partnership Health Plan is structured like a health maintenance organization (HMO), using a managed care model of service delivery.

For medical care, beneficiaries are assigned to a primary care provider (PCP) either by client choice or random assignment if no choice is made. Clients may change providers according to provisions in the Partnership Health Plan (Anderson, 1993a). PCPs serve as medical case managers, and may be individual physicians, community clinics, or medical groups. Each PCP is reimbursed on a capitated per member/per month basis for health care services at a rate that represents a comparable cost to Medi-Cal FFS. The PCP


must authorize referrals to hospitals and specialty care, with the exception of mental health care which is "carved out" separately.

Access to primary care had been limited for the Solano County Medi-Cal population under the FFS model, frequently resulting in high costs for care of these clients by local emergency services. The Partnership Health Plan developed a primary care capacity for over 65,000 members, significantly exceeding the current Medi-Cal population of just over 40,000, thus substantially reduc- ing medical care access problems. However, county officials had to decide how to integrate the public mental health system with the managed care approach taken by the Partnership Health Plan.

The Solano County case offers some insights about the anticipated impact of various policy strategies when local communities consider adopting a managed care model. Three alternative strategies are presented with some of their advantages and disadvantages to demonstrate some of the options and trade- offs that decision makers considered in negotiating the relationship of the mental health system to the county managed health care plan.

1. Merge all county mental health services with the Partnership Health Plan: �9 This approach would have integrated medical and mental health ser-

vices, established a single point of entry and spread risk to the fullest extent possible.

�9 The Partnership Health Plan did not possess the experience and expertise to manage the multiple funding sources and complex network of services required for operating the mental health system.

2. Exclude mental health services from the Partnership Health Plan benefit package, keeping mental health on the state's timeline for implementing managed care carve-outs scheduled for October 1, 1994: �9 Mental health would have had more time for planning and prepara-

tion before the start-up of managed care. �9 With neither the Partnership Health Plan nor the county at risk, there

are few incentives to reduce costs. Medical and mental health would not be integrated, leading to cost-shifting and continued fragmented services.

3. Solano mental health would assume an "internal carve-out" with FFS mental health services becoming a benefit of the Partnership Health Plan: �9 Improved integration of the medical and psychiatric care systems

would be achieved, and the potential for cost-shifting and fragmented services reduced.

The third alternative, a county mental health carve-out, was agreed upon by the Partnership Health Plan, county mental health and the county board of


supervisors. Difficulties in establishing an adequate provider network were anticipated due to historically low Medi-Cal FFS rates. However, a carve-out allowed the county to better coordinate its health and mental health systems and control costs by managing both inpatient and outpatient mental health services. With Solano mental health serving as the contract provider, the carve-out would designate a single point of entry for access to outpatient mental health services, and the county would contract with community providers to expand the range of brief supportive mental health services as well as provide immediate crisis evaluation for emergency access. Solano mental health would also assume full risk for all inpatient expenditures. Neither inpatient nor outpatient m e n t a l health services would be part of the PCP's rate (Anderson, 1993b). Careful management of inpatient utilization was expected to provide funding to expand alternatives to hospitalization and community- based services.

The carve-out decision was not reached until late in 1993, only a few months away from the managed care start-up date. County officials realized that setting up a managed mental health care system over the limited time frame between January and May 1994 would be difficult without outside consultation. Therefore, Solano County issued a request for proposals, reviewed the responses from managed mental health vendors, and awarded a contract to U.S. Behavioral Health for technical assistance in developing its managed mental health system. The resulting public-private venture that began in late January reflected the recognition by Solano mental health that the county could benefit from the private sector experience of a managed health firm with extensive technical capabilities and a treatment philosophy (improving outpatient access will decrease inpatient utilization) compatible with public sector objectives.

U.S. BEHAVIORAL HEALTH

U.S. Behavioral Health was founded in 1979 as a provider of employee assistance programs (EAPs). Since 1985, the company has also provided a range of managed mental health and substance abuse services nationwide. Contracts include insurance companies, self-insured employers, trust funds, HMOs, and government agencies. The CEO and several of the other senior executives at U.S. Behavioral Health also have previous experience adminis- tering community mental health programs (Goldman & Feldman, 1993). Moreover, in the 1980s these executives established an H M O that offers health and mental health care to Medi-Cal eligible beneficiaries as well as privately insured clients in another Northern California county.

The philosophy at U.S. Behavioral Health is largely shaped by its founder and current CEO, and reflects the belief that a constructive tension between


the care provider and the care manager is required in order to ensure that there is objective, ethical decision making and optimal quality of care. As a result, U.S. Behavioral Health has developed an extensive, nationwide preferred provider network, rather than adopting a staff model. U.S. Behavioral Health also strives to protect the member's (i.e., the mental health client's) benefits by attempting to minimize inpatient treatment while increasing the array of community-based and outpatient services. The firm emphasizes the importance of access, early intervention and comprehensive care management; continuity of care, including follow-up, and collaboration among providers, consumers, payors and care managers are also seen as essential (Feldman, 1999). These managed care approaches fit well with the system that Solano County mental health was designing to improve both access and quality in the public sector.

Eligible clients from the public or private sectors may access U.S. Behavioral Health via a 24-hour 800 telephone number staffed by "intake counsellors," mental health professionals who briefly assess the caller's needs, identify whether the situation is an emergency, and determine eligibility. The intake counselors then use the firm's computerized provider database to quickly identify the most suitable provider (considering geographical location, special requests by the client such as for a female therapist, and network membership), refer the member to the selected provider, and authorize one or more assess- ment visits. Subsequent authorizations are monitored by U.S. Behavioral Health care managers, licensed and experienced mental health professionals who assist the provider in developing a treatment plan tailored to the member's individual needs, and in identifying non-institutional alternatives for continued care as required by the member. Quality assurance activities at U.S. Behavioral Health include monitoring the re-hospitalization of members with psychiatric disorders, and the post-discharge sobriety of persons utilizing substance abuse services. One mechanism for providers to air questions and concerns is the U.S. Behavioral Health telephone line; logging and reviewing these messages help identify problem areas and target the development of informational materials and revised procedures.

Based on this array of capacities and expertise, U.S. Behavioral Health contracted with Solano County for technical assistance services (Figure 1) which included developing an information system; periodic reporting of utilization, outliers and provider performance; a 24-hour 800 number telephone line for client referral and provider information; inpatient utilization review; and claims processing. Crisis intervention and hospital care management are provided through collaboration between the county (which provides crisis intervention, initial authorization for hospitalization and hospital liaison services) and U.S. Behavioral Health, which provides continuing authorization, care management and utilization review. Advantages for the county in contracting with U.S. Behavioral Health include the firm's experience in managed


FIGURE 1 Technical Assistance Provided by U.S. Behavioral Health

to Solano County

Developing a comprehensive management information system

�9 Client eligibility determination

�9 Track service utilization and costs

�9 Continuously updated provider and community resource listings

�9 Quality monitoring

Routine reporting

�9 Monthly utilization meetings with county staff

�9 Identification of high utilizers of mental health services

�9 Monitoring of provider performance

�9 Client outcomes, complaints and grievances

A 24-hour 800 number telephone line

�9 Client referral to outpatient providers

�9 Claims information for providers

�9 Communication of complaints/grievances

�9 Immediate referral to county staff of emergency and urgent cases

Inpatient utilization review

�9 Pre-authorization and certification

�9 Concurrent review of length-of-stay

�9 Collaborative decision-making with the physician, hospital staff and county hospital liaison unit

Claims processing m

mental health care and ability to tailor their services to the particular needs of their customers. The ability of U.S. Behavioral Health to plan and implement a new system within a short time frame was another advantage. The company's assumption of screening, intake and care management functions during system start-up will provide the county with an experience base regarding the demand for services and staffing requirements that will be useful as full implementation takes place.

One start-up concern that took on increasing importance to county officials and program directors was the need for new procedures, policies, and protocols. Questions included: who screens clients for admission to inpatient and


outpatient programs, who does the client call for assistance, and how well do providers address problems in filing claims? In addition, the county's technical assistance requirements led to modifications of U.S. Behavioral Health's computer system and staff protocols. Training and technical assistance issues required an ongoing collaboration and problem solving approach among the managed care company, the county, and other stakeholders.

TRAINING AND TECHNICAL ASSISTANCE ISSUES

A conducive political environment, progressive administrative decision- making and qualified, collaborative leadership are key factors in planning a managed mental health system. However, training and technical assistance may present some of the greatest opportunities or obstacles to successful implementation. There is a new way of thinking required of all participants (providers, consumers, and advocates) when public mental health systems adopt a managed care model. For example, consumers must use the system differently than before. In order to educate consumers, the county managed care administrator wrote an article describing the new managed mental health care system for publication in the local newsletter of the Alliance for the Mentally Ill (AMI). In addition, the Partnership Health Plan included a separate section on accessing mental health care in their member handbooks. AMI members and consumer representatives are appointed to the Managed Care Steering Committee established by Solano County mental health, so they can raise questions and provide feedback to the director, managed care administrator, and U.S. Behavioral Health project director.

Solano County mental health staff probably face the most change in roles and policies. An important aspect of managed care is providing feedback to staff regarding performance areas such as the substitution, whenever possible, of less costly and intensive community-based alternatives for inpatient treatment. County managers must demonstrate the advantages of using managed care techniques, motivate staff to assume ownership of managed care problems and solutions, and ensure that the feedback process is perceived as problem- solving rather than punitive. In addition, staff have concerns that must be addressed in a satisfactory and timely manner.

County staff are also adjusting their thinking about service priorities. For the last few years, staff spent considerable time and effort in narrowing their focus to a target population of the most seriously disabled clients. Now the Partnership Health Plan is taking on all of the county's Medi-Cal clients for service; however, given the limited resources available, mental health officials are holding to the more narrow target criteria for intensive ongoing services. Expanded Medi-Cal population eligibles who present with acute and situa- tional crises are provided with crisis/brief therapy interventions, medication as


r equ i red , and re fe r red to c o m m u n i t y suppor t and self-help groups. Staff mus t develop and apply more sophist icated skills in screening and case review in o rde r to appropr ia t e ly serve the popula t ions with the highest pr ior i ty for care,

while avoid ing excessive ut i l izat ion and costs. U . S . Behaviora l H e a l t h project leaders col laborated with Solano C o u n t y

men ta l heal th to develop a provider ' s t ra in ing m a n u a l that briefly describes

FIGURE 2 Key Elements of the Solano County Provider Training Manual

Overview of managed care in Solano County

�9 Rationale for the county's move to managed care

�9 Organization of the Partnership Health Plan

�9 Current and future financing of the county mental health system

�9 Role of U.S. Behavioral Health in managed care mental health system

�9 Role of private H M O contracting for Medi-Cal clients

Claims and billing instructions

�9 Billing procedures

�9 Payment policies

�9 Claims processing overview

�9 Billing codes for approved services

Access protocols for outpatient services

�9 Overview of 800 number telephone line

�9 Referral protocols

�9 Access standards and monitoring

�9 Continued authorization

�9 Eligibility verification

�9 Coordination with primary care provider

Access protocols for inpatient services

�9 Role of Solano County Crisis Services in admissions and initial authorization

�9 Pre-certification procedures

�9 "Walk-ins" and other client requests for hospitalization

�9 Continued authorization

�9 Inpatient profession services

Complaint and grievance procedures

�9 Role of U.S. Behavioral Health

�9 Complaint response protocols

�9 Grievance response protocols

Adapted from the Solano County Mental Health Medi-Cal Managed Care Provider Manual Fairfield, CA; Solano County Health and Human Services Mental Health Division, May 1, 1994.


the managed care system (using the article distributed to county consumers), gives instructions on claims and billing procedures and policies, presents access protocols for outpatient services including the screening and referral line operated by U.S. Behavioral Health, specifies requirements for authorization of inpatient admission and ongoing authorization, and explains how grievances are handled (Figure 2).

This manual was distributed to county staff, members of the mental health provider network, and U.S. Behavioral Health personnel staffing the intake lines and providing care management for inpatients. Additional materials explaining procedures specific to Solano county clients and providers, and instructions about the information system U.S. Behavioral Health developed to meet the county requirements were also circulated to U.S. Behavioral Health employees involved in this project.

The relatively rapid pace at which substantial system changes had to take place in order to design a managed mental health system required that training sessions not only be provided as a means for educating and directing staff, but to keep lines of communication open to engage in problem-solving. Training sessions scheduled at the time of the start-up followed an agenda similar to the design of the provider manual; the meetings opened with a brief overview of the Solano managed care system and the roles of U.S. Behavioral Health, the Partnership Health Plan and the mental health department under the reorganization. The director and managed care administrator led these sessions and fielded questions and concerns, with the help of the U.S. Behavioral Health project director. For example, with U.S. Behavioral Health assuming managed care responsibilities such as utilization review, county employees were uncertain about the role of the two county psychiatric Crisis Centers (the designated gatekeepers for all psychiatric hospital admissions) and of county staff in the hospital liaison unit. Staff were also uncertain about the continued role of a county mental health case management program. Access problems and case management of children's services required clarification; another question focused on the procedures for client complaints and grievances.

It was not possible to resolve all of these questions during the orientation sessions. However, the staffs sharing of concerns led to the revision of the provider manual, site visits by U.S. Behavioral Health care managers to county programs, and the refinement of policies and procedures. It was important to staff and program directors that they had an opportunity to talk with representatives from U.S. Behavioral Health to express their concerns and ask questions; it was also important for U.S. Behavioral Health staff to be able to adapt their technical assistance mechanisms, whether the 800 number phone line, computer system or procedures to better fit the needs of the county's staff and clients. As a result, lines of authority and responsibility were clear to all parties.

Problem-solving was encouraged in the training sessions; the director and other top administrators emphasized that they anticipated unexpected ques-


tions and concerns would arise once this new system was implemented, and stre~ssed the importance of keeping communication lines open between staff, providers, managers, U.S. Behavioral Health, and other participants. The director scheduled a weekly meeting for problem-solving, and invited staff to convey concerns to their supervisors or to participate directly to address issues. Although the provider manual was designed to serve as a reference for staff regarding the new policies and procedures, training sessions that allowed for face-to-face contact and discussion appeared to be critically important to county employees. These sessions also helped reinforce a collaborative relationship with U.S. Behavioral Health; it was reassuring to staff to have personal contact with people who would be dealing with them and their clients via the telephone.

Another issue was the county's use of U.S. Behavioral Health's technical assistance and expertise in adapting a private sector model to a public sector setting. Elements requiring special adaptation included a sophisticated information system, reports, and claims processing, as well as managed care technologies such as authorization for care and concurrent review of inpatient utilization. For example, U.S. Behavioral Health developed a Medi-Gal client and provider database separate from the information system used for handling its other customers, because of the unique characteristics of Medi-Cal eligibility data and differences in Medi-Cal provider rates compared to fees paid for the care of private sector clients. The collaborative relationship between the county officials and U.S. Behavioral Health project staff greatly facilitated the development of a workable information system that has performed well from the start-up. The county will receive information about authorizations for care, services utilization, claims and fiscal projections. Monthly reports will also identify the highest service utilizers for improved monitoring, care management, quality assurance and cost control. Much work remains to be done to bring together these two information systems so that the county can move forward on consolidation.

Concerns about the participation and cooperation of providers in the FFS network are also related to building trust, opening channels of communication and educating mental health professionals about managed care. Providers with large numbers of Medi-Cal clients become concerned about a potentially precipitous increase in paperwork because of required update reports. U.S. Behavioral Health project leaders determined that providers could reduce this burden by scheduling telephone appointments to discuss cases, rather than submitting forms. Providers are represented on Solano County mental health's Managed Care Steering Committee, and a newsletter will be distributed by the county to keep providers informed and involved in the project. Quarterly provider meetings will also be held to enhance communication and problem solving, and to help the professional community adapt to managed care.

The staff at U.S. Behavioral Health also required training and the opportunity to discuss areas of concern. Intake counsellors and care managers


needed to become more familiar with county programs and resources. These private sector staff are accustomed to focusing on mental health referrals for employed populations and their dependents; public sector clients are served by a broader range of health care and social services and more frequently require intensive and long-term care. The county has developed a number of community-based programs for the most disabled clients. U.S. Behavioral Health staff has been provided with a county resource directory listing mental health and other service providers. In addition, U.S. Behavioral Health staff is learning about the county's case review process so that referrals to county services are appropriately screened and authorized. This is particularly important at the initial request for service point in order to appropriately direct clients either to county services or the network of county providers. Intake counselors and care managers will continue to meet with county staff to develop a more thorough understanding of county programs and their target populations in order to achieve this goal.

OTHER IMPLEMENTATION ISSUES

It was necessary to specify and review procedures for clients who elected to join a private H M O that had contracted with the county on a capitated basis to provide both medical and psychiatric care to a limited number of county Medi- Cal beneficiaries, again as a first-time pilot project. As the primary care provider, the H M O agreed to assume full responsibility for providing and managing all inpatient and outpatient health and mental health care for its Medi-Cal enrollees, except for services provided by the county under the Short-Doyle program. The H M O enrollees are therefore referred directly to the HMO, rather than using the U.S. Behavioral Health referral and utilization review systems.

The service relationship between the H M O and the county is complicated by the need of the H M O to access county services for certain seriously mentally ill clients (for example, day treatment, residential facilities and long-term care). County officials want the H M O to use some of its capitated funding to develop service alternatives to costly inpatient care and not solely rely on the county for access to community-based programs. Clarification of the HMO's responsibilities are important to Solano mental health because of concerns that target population clients might be disenrolled or inappropriately referred for county services. Meetings between the H M O and Solano mental health that focus on problem solving have been regularly scheduled to negotiate service access and system boundaries.

In terms of private sector providers, the development of an adequate provider network has presented one of the greatest obstacles in this demonstration. A particularly severe shortage of qualified FFS providers of children's mental


health services has resulted in a waiting list for children's services, which managed care was intended to reduce. The provider pool is restricted to psychiatrists and Ph.D. psychologists pending authorization from the Califor- nia Department of Health Services to contract with community-based Medi- Cal certified agencies. This has limited both the number of available providers, and more importantly, the cultural diversity of the provider pool. U.S. Behav- ioral Health attempted to recruit Medi-Cal providers from its private sector network in the Solano County area. In addition, the county is seeking state authorization to contract with local agencies to augment the provider pool, and is considering raising the Medi-Cal fee schedule for outpatient services to attract more providers into the network.

One of the greatest challenges in designing the Solano managed mental health care system was definition of medical necessity and its implications for access to services. The state had indirectly limited costs and access through a low provider fee structure. When the county assumed responsibility for inpatient and outpatient services, it needed to define a "benefit package" for eligibles which provided sufficient client access but did not allow the system to be overwhelmed by pent-up demand. The establishment of a central mental health access number allows the county and U.S. Behavioral Health to gain an accurate measure of the demand for services. This concern remains an issue for both Solano and other counties planning for Medi-Cal consolidation.

U.S. Behavioral Health project directors helped Solano County develop acceptable criteria for medical necessity for outpatient services, but implementation problems remained. For example, recently approved and pending cases may not be indicated on the state data tapes used to identify client eligibility, causing confusion about access. This problem was addressed by developing mechanisms to validate client eligibility that were built into the information system. An example of eligibility and routine outpatient protocols for U.S. Behavioral Health intake counsellors and care managers is depicted in Figure 3.

BEYOND THE MANAGED CARE START-UP

For Solano County, the next step in the reorganization of its mental health system is the consolidation of FFS and Short-Doyle Medi-Cal funding into a capitated system, scheduled for January 1, 1995 (Figure 4).

The consolidation will involve about $3 million in FFS funding from the California Department of Health Services, and about $15 million in Short- Doyle Medi-Cal funding. Consolidation will provide greater funding flexibility for reimbursing providers such as social workers and non-profit community based organizations; current guidelines limit reimbursement to psychiatrists and psychologists.


FIGURE 3 U.S. Behavioral Health Protocols for Solano County Clients

Eligibility

Benefit History is obtained via the beneficiary (Solano County client) screen, to determine current eligibility status

Eligibility History is obtained via the Benefit History screen, providing the past 12 months of eligibility history

Outpatient Services

Scope of Medi-Cal outpatient services

�9 Evaluation and referral into county or community ("system of care") services

�9 Brief, goal focused therapy

�9 Stabilization and maintenance

�9 Medication support

�9 Crisis intervention

�9 Evaluation and referral back to the primary care provider (PCP) for incidental mental health problems

�9 Consultation for Health Partnership Plan PCPs treating incidental mental problems

If unable to obtain theses services for clients via the provider network, refer to the county system of care

Referral protocols (other than clients already in treatment at the time of the managed care start-up)

�9 Urgent problems

Interactions with the police, safety checks and emergency procedures are handled in the same way as for private sector clients

The Solano County Units will assess urgent evaluations

�9 Routine outpatient referrals

Ask if the client has ever had mental health services through Solano County Mental Health, in order to identify current users and refer them back to county staff

When possible, assist the client in contacting the clinician to reduce problems in obtaining an appointment; systems are under development to track access problems and waiting lists

�9 Ongoing certification

Certify up to five outpatient sessions at a time

"Ongoing supportive services," i.e., maintenance care can be certified with periodic review once medical necessity is established

Clients may be presented to the weekly Solano County Clinical Case Review Committee to determine their need for placement in county programs

Adapted from U.S. Behavioral Health training and orientation materials, Emeryville, CA, April 27, r 1994.


FIGURE 4 Major Challenges Beyond Managed Care in Solano County

Consolidation of FFS and Short-Doyle Medi-Cal funding

�9 Capitation

�9 Greater funding flexibility

Interagency cooperation across sectors such as schools, criminal justice and social services

�9 Better services to children who are SED or high-risk

�9 Establishing family-centered and outreach services

�9 Combine substance abuse treatment and mental health for a behavioral health system

�9 Expand community treatment and residential alternatives to hospital and long-term care

�9 Identify indicators and measure outcomes to improve access and quality

Prevention of potential cost-shifting

�9 Mental health consultation services for medical PCPs

�9 Include management of incidental mental health problems in PCP rates

�9 Adherence to target population criteria for intensive services

National health care reform measures

�9 Continued concerns about long-term care

�9 Likely denial of national coverage for undocumented county residents

�9 Possible changes in target population definition creating strains on system resources

FSllowing consolidation, the county mental health director and managed care administrator envision further development of interagency linkages. One example is the potential consolidation of substance abuse treatment services and mental health into a behavioral health system, as U.S. Behavioral Health does in the private sector. An important priority is developing an integrated system of care for serving at-risk and severely emotionally disturbed (SED) children, which will require improved collaboration with child welfare, schools, the criminal justice system and other sectors. Prevention and outreach efforts, such as early identification and intervention, family supportive services and addressing community problems such as criminal and domestic violence are additional goals that county officials want to pursue in the years to come. There is also some concern about potential cost-shifting by PCPs of clients with short-term or incidental mental health problems that PCPs are currently treating.


National health care reform is an issue which will affect the current mental health system changes. Whatever shape health reform legislation takes, it is expected to follow a managed care model, so the county will be better prepared for its provisions given its experience. County officials realize that there are continued concerns about the long-term care of the most seriously mentally disabled that may or may not be adequately resolved by federal health care legislation. The coverage (or restriction of benefits) for undocumented persons is another concern under national health care reform, particularly in states such as California (American Public Health Association, 1993).

Another issue that will affect the thinking and system requirements given various national health care reform scenarios is the way in which the target population eligible for specialty mental health services is defined. California and its counties are currently developing relatively narrow criteria for inpatient and outpatient mental health services, based on diagnostic and functional characteristics, so that those most in need of care have priority for the scarce resources available. However, national health reform may result in a specified package of mental health benefits for all Medicaid recipients. It is therefore unclear whether the target population will be broadened or will continue to be narrowly defined as the most seriously mentally ill, so eligibility may change dramati- cally. This issue is of great concern to Solano County officials, as a substantial increase in the mental health caseload will overburden the current system.

CONCLUSIONS

A number of lessons have been learned by U.S. Behavioral Health in setting up managed care procedures for the public sector. The determination of eligibility was found to be much more complicated than for employed populations, although it was possible to configure the information system to overcome this problem. Before the managed care start-up, some providers were able to electronically bill Medicare and Medi-Cal for their services; U.S. Behavioral Health was not aware of this situation, so these providers must return to using forms. However, the experience of the first few months indicate that the implementation of managed care has been successful, despite continuing problems in establishing an adequate provider network.

Key people make a tremendous difference in managing change and all its complexities. In Solano County, the mental health director possesses a long- term vision of system reform, and has demonstrated the ability to be an effective change agent. The directors of county services are experienced professionals who actively participate in problem-solving and decision-making. The county managed care administrator was promoted from a position as director of community mental health services. As a result, he shares a similar perspec- tive as the mental health department regarding the special needs and issues of


the target population, and appreciates the complexities of the financing of services. The chair of Solano County Board of Supervisors is a former member of the Mental Health Advisory Board, and the supervisors have consistently supported the mental health department's activities. U.S. Behavioral Health leadership includes the previous public sector experience of many of its top executives, prior public-private partnership experience in other mental health and managed care settings, and commitment to providing high quality services to the public sector system and its clients.

This case represents a unique situation leading to managed care. The mental health department has a cooperative relationship with the Partnership Health Plan, which is essential in establishing and operating a carve-out agreement. Events propelling the county's decision to reorganize its mental health system include the establishment of the Coalition for Better Health, which created the Partnership Health Plan to manage and capitate medical care; the rapid start- up of managed care required by the mental health department, leading to its role as a demonstration county; the availability of an experienced managed mental health care corporation with the technical expertise and public sector qualifications to quickly and effectively collaborate in changing the system; and county as well as corporate leadership and vision.

Training and technical assistance issues included some difficult problems that had to be resolved for successful implementation. Policies and procedures had to be developed, discussed and disseminated among all the stakeholders in the system; allowances for continuing questions and feedback were essential in identifying and resolving problem areas. The management information system had to be customized to fit the requirements of the county and adapted to allow for special needs such as the verification of client eligibility status.

In the future, system reforms will not end with managed care but will move on to interagency perspectives and health care reform as the next steps. County officials, providers and consumers in managed mental health systems are beginning to see managed care as one step along an ongoing effort to improve the mental health services in the community.

REFERENCES

American Public Health Association. (1993, August). Health reform may prove hollow to undocumented persons. Nation's Health, pp. 1, 8.

Anderson, K. (1993a). Mental health and managed care in Solano County (internal report). Fairfield, CA: Solano County Health and Social Services Department.

Anderson, K. (1993b). Addendum to Mental health and managed care in Solano County (internal report). Fairfield, CA: Solano County Health and Social Services Department.

California Department of Mental Health. (1993, October 4). Managed care for Medi-Cal mental health services (draft). Sacramento, CA: Author.

Feldman, S. (1992). Managed mental health services: Ideas and issues. In S. Feldman (Ed.), Managed mental health care. Springfield, IL: Charles C. Thomas.


Goldman, W., & Feldman, S. (Eds.). (1993). Managed mental health care. New Directions for Mental Health Services, 59, Fall. San Francisco: Jossey-Bass.

Solano County Health and Human Services, Mental Health Division. (1994, May 1). Solano County mental health Medi-Cal managed care provider manual. Fairfield, CA: Author.

U.S. Behavioral Health. (1994, April 27). Training and orientation materials. Emeryville, CA: Author.

a public-private sector venture in managed mental health: solano county's experience

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