What CMHCs can learn from two states' efforts to capitate Medicaid benefits

If the Clinton health care reform package becomes law, community mental health centers will face challenges similar to those recently encountered by centers in several states under new Medicaid initiatives to capitate payments for mental health care. The authors summarize experiences and research findings from centers in two states using two different models: in Minnesota, a mainstreaming model in which Medicaid contracted with health maintenance organizations (HMOs) to provide all physical and mental health care for its beneficiaries, and in Utah, a mental health HMO model in which community mental health centers signed contracts to serve as mental health HMOs for Medicaid beneficiaries. Several implications for CMHCs under managed competition are discussed, including the need for centers to play a strong, proactive role in the establishment of benefit alternatives and enrollment processes and the need to implement aggressive policies to manage service utilization.