Protecting the public interest: issues in contracting managed behavioral health care

In recent years, state governments have begun contracting out behavioral health care to large managed for-profit organizations. This approach to mental health service delivery has resulted in realignment in roles for both state agencies and the managed care organizations. Overnight, state agencies have been transformed into contract managers of multi-million dollar capitated health plans. Managed care companies, in turn, moving into the public-sector market must adjust their service delivery to include key concepts of public interest involvement such as consumer input, public comment, and outreach. This article analyzes three public-sector transitions. Common issues in these transformations are used as a springboard for identifying key concerns which states need to monitor when developing managed care contracts.