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Related Experiment Videos

Risk sharing in managed behavioral health care.

M B Rosenthal1

  • 1Department of Health Policy and Management, Harvard School of Public Health, USA.

Health Affairs (Project Hope)
|September 25, 1999
PubMed
Summary
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A shift to case-rate payment systems in managed behavioral health care reduced mental health visits by 25%. This risk-sharing impact was greater for providers with higher case rates and intensive utilization management.

Area of Science:

  • Health Services Research
  • Behavioral Health Economics
  • Healthcare Policy

Background:

  • Policymakers are concerned about how risk-sharing arrangements with healthcare providers influence treatment delivery.
  • Existing research provides limited conclusive evidence to guide policy decisions on provider payment models.
  • Managed behavioral health organizations (MBHOs) are exploring alternative payment structures beyond traditional fee-for-service.

Purpose of the Study:

  • To evaluate the impact of transitioning from a fee-for-service to a case-rate payment system on mental health treatment patterns.
  • To assess how delegated utilization management within a case-rate model affects healthcare utilization.
  • To identify provider characteristics that moderate the relationship between risk-sharing contracts and treatment intensity.

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Main Methods:

  • Quasi-experimental evaluation of a contracting change within a managed behavioral health organization.
  • Comparison of mental health visit frequency before and after the implementation of a case-rate system.
  • Analysis of how case rate value and provider revenue mix from risk contracts influence utilization.

Main Results:

  • The shift to a case-rate system with delegated utilization management led to a 25% reduction in mental health visits per episode.
  • The magnitude of this reduction was associated with the dollar value of the case rate.
  • Providers with a greater proportion of revenue from risk contracts and those employing intensive utilization management showed a more significant decrease in visits.

Conclusions:

  • Risk-sharing payment models, specifically case rates with delegated utilization management, can significantly alter provider treatment patterns by reducing service utilization.
  • The financial structure of risk contracts and the intensity of provider-led utilization management are key factors influencing the effectiveness of these payment reforms.
  • Findings provide empirical evidence for policymakers considering the design and implementation of value-based payment models in behavioral healthcare.