Managed behavioral health care: a Medicaid carve-out for youth

This DataWatch assesses the impact of a public sector-managed Medicaid mental health carve-out pilot for North Carolina youth. Access to, volume of, and costs of mental health/substance abuse services are reported. We compared a pilot managed care program, with an incentive to shift hospital use and costs to community-based services, with usual fee-for-service Medicaid. Aggregate data from Medicaid claims for youth (from birth to age seventeen) statewide are reported for five years. We found dramatic reductions in use of inpatient care, with a shift to intensive outpatient services, and less growth in mental health costs. These findings demonstrate that public sector-managed care can be viable and more efficient than a fee-for-service model.