Risk sharing in managed behavioral health care

While policymakers have expressed concern over the impact of risk sharing with providers on treatment patterns, the literature lacks decisive evidence on which to base policy. This paper evaluates the impact of a contracting change within a managed behavioral health organization from a fee-for-service system to a case-rate system with utilization management delegated to providers. The contracting change resulted in a 25 percent reduction in mental health visits per episode. This effect varies with the dollar amount of the case rate and is more pronounced for providers with a larger share of revenue from risk contracts and with intensive utilization management programs.