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Risk contracts in managed mental health care
R G Frank1, T G McGuire, J P Newhouse
1Department of Health Care Policy, Harvard University, USA.
Health Affairs (Project Hope)
|January 1, 1995
Summary
Managed behavioral health care contracts are becoming common for employers and Medicaid. A "soft" capitation model is recommended to manage mental health benefits while preventing under-service of seriously ill patients.
Area of Science:
- Health Services Research
- Health Economics
- Behavioral Health Management
Background:
- Private employers and state Medicaid programs are increasingly utilizing risk contracts with managed behavioral health care organizations.
- These contracts aim to manage benefits for mental health and substance abuse services.
Purpose of the Study:
- To analyze the rationale for carve-out programs in behavioral health care.
- To provide recommendations for the structure of payer-managed behavioral health care contracts.
Main Methods:
- Analysis of the case for carve-out programs.
- Formulation of recommendations for contract design.
Main Results:
- A "soft" capitation contract, where only partial claims risk is transferred, is suggested.
- Avoiding enrollee choice among risk contractors is recommended to prevent underservice.
Conclusions:
- Managed behavioral health care contracts require careful design to balance cost management with quality of care.
- Soft capitation and restricted enrollee choice are key considerations for effective payer-managed behavioral health contracts.