How capitated mental health care affects utilization by youth in the juvenile justice and child welfare systems

Examine the impact of Colorado's Medicaid mental health carve-out program on children in child welfare and juvenile justice systems. Medicaid claims and encounter data for two experimental managed care sites and one comparison fee-for-service site are used to estimate a two-part model of inpatient, outpatient, and residential treatment center utilization, controlling for patient characteristics. The study finds that juvenile justice and child welfare populations were more strongly affected by managed care than the general youth population, regarding reduced utilization of inpatient and outpatient services. Increases in Residential Treatment Centers use were greater for juvenile justice than either the child welfare sample or the total sample. Youth in child welfare increase utilization of outpatient services. Most utilization effects are stronger for not-for-profit than for-profit managed care organizations. The experience of Colorado implies that a mental health carve-out affects patterns of care for youth and differentially so for youth in juvenile justice and child welfare systems. Controlling for population characteristics, the effects are stronger for not-for-profit than for-profit managed care organizations.