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- David Gates, Esquire, Pennsylvania Health Law Project

As the field moves into managed care arrangements, a major concern for pro- viders and Single State Agencies alike is how to ensure client protections for AOD-dependent persons. The fear is that, under managed care, AOD clients will not receive the level or duration of care they receive under fee-for-service plans. This fear is well-founded. A recent study looked at how one State 's Medicaid patients fared when treated in health maintenance organizations (HMOs) compared to fee-for-service arrangements. This study found significant differences in services and outcomes, including:

• Managed care programs identified fewer patients needing AOD treatment

• Managed care programs did not utilize a full continuum of services, since they did not use residential care

• Outcomes for HMO clients were worse than for those treated under fee-for-service plans

The AOD field needs to ensure that client protections are built into any new State or Federal health care system. Needed protections can be guaranteed by means of Federal and/or State health care reform legislation, by regulation through the State agencies that license HMOs, and by contractual provisions made by Single State Agencies and Medicaid agencies with managed care entities (see the chart below for a managed care model).

Issues in Managed Care

While there are many different forms of managed care, all have one thing in common – gatekeepers. These are individuals or organizations who determine what services, other than primary care, are medically necessary for an enrolled individual (i.e. whether the service will be covered and in what setting and duration). Clients generally cannot self-refer except for primary care, and providers other than the primary care physician cannot provide services without referral or authorization.

Who makes AOD treatment decisions? In the context of alcohol and other drug (AOD) dependency, the gatekeeper function is often performed by behavioral health management firms, also known in the field as managed care firms. A major issue around who makes treatment decisions is the qualifications of the reviewers who staff the behavioral health management firms. In most States, these firms are not licensed or regulated. Therefore, concerns have been raised that these firms can use persons with inadequate clinical knowledge and experience in the field of alcohol and other drug abuse.

What standards are used to determine levels of care and length of stay? Standards for determining level of care are often kept secret by the behavioral health management firm or the HMO itself. They argue this is necessary to keep providers from " gaming " the system. However, it results in confusion among providers and often the perception of arbitrariness, especially where different managed care plans use different standards.

How much financial risk is imposed on decision-makers? Money drives behavior. A behavioral health management firm is less likely to authorize expensive, long-term services if that firm is financially at risk for the cost of the services it authorizes, or if it stands to profit from savings resulting from reduced utilization. While keeping costs down is a legitimate concern, there is a risk that financial decisions will supersede clinical ones when the amount of financial risk is significant. This is particularly troublesome where the number of enrollees who comprise the risk pool is small, so a few people in need of costly services can threaten the financial viability of the plan.

What are the requirements for provider participation? In most States, managed care plans are free to pick and choose the providers with whom they wish to contract. They may not be required to disclose their standards, if any, for determining the providers with which they will contract.

Managed care plans defend this practice as necessary to enable plans to get the best price from participating providers and to enable plans to contract with providers they feel are the most cost effective. However, this can lead to the exclusion of programs that specialize in treating special populations, such as pregnant women, adolescents, and the dually diagnosed, especially if they are higher cost. It may also limit the cultural diversity of programs available to enrollees in managed care.

How is success measured? There appears to be a growing trend among some government officials and employers to judge the success of a managed care plan by its ability to cut the price of coverage as compared with fee-for-service plans (including traditional Medicaid). Since managed care is a highly competitive market, plans will try to compete on those factors which are most important to buyers (government and business). If, in the minds of buyers, price obscures factors like effectiveness of treatment, accessibility of treatment, and coverage of a full continuum of care, these other factors are likely to suffer as plans take aggressive actions to cut their costs.

Protecting Clients in Managed Care

Providers and Single State Agencies (SSAs) will need to serve as advocates on behalf of the clients they serve. The following are some of the major areas in which persons in need of treatment for alcoholism or other drug dependencies will need protection.

Disclosure of treatment network prior to enrollment. Managed care plans should be required to inform potential subscribers – before they enroll – about which providers are enrolled in their network and about any limitations in the plan 's coverage of non-participating providers. This is necessary because, in some cases, Medicaid patients already in AOD treatment have not been told they will have to switch programs once they enroll in a particular managed care plan. For persons already in treatment, it will also be important to disclose who will decide whether that person can remain in their current treatment program and how that decision will be made.

Community-based outreach for hard-to-reach populations. Alcohol and other drug dependency is a public health issue. As such, the failure to provide treatment to any segment of our population puts us all at risk– for higher costs in health care, crime, child welfare, and other AOD-related consequences. Underserved populations will need special peer-based efforts to bring them in for services. Managed care plans are not usually the best entities to do this because:

• They have a financial disincentive to bring in people with high service needs

• They are often not community-based and are likely not to have the kind of staff needed for this work

Single State Agencies need to financially support these efforts through contracts with community-based organizations.

Prompt entry into the AOD dependency treatment system. We must make entry to AOD treatment as easy as possible, since there is often a limited period of time during which an individual is ready, willing, and able to accept treatment. To accomplish this, alcohol and other drug dependency treatment services must be presented as preventive care. Managed care has been sold as a means to improve access to preventive care. We need to use that same argument with regard to alcohol and other drug treatment. Health cost avoidance data is essential to do this.

• Immediate entry situations – Immediate entry to detoxification must be permitted as well as immediate entry to treatment in emergency situations. This issue is dealt with by the Model Managed Care Consumer Protection Act drafted by the President' s Commission on Model State Laws (December 1993), referred to here as " The President ' s Commission Model Act. " This Act would define detox as an emergency, thereby, under most State laws, requiring immediate entry.¹ The managed care plan or behavioral health management firm can designate certain providers that can accept emergency admissions. The standards to be used for emergency admissions would have to be made known to all participating providers. The provider would be responsible for notifying the plan within a certain time period, at which point the plan would review the assessment (if done) or do a new one.

• Time limits on nonemergency assessments – Time limits should be imposed on nonemergency initial assessments and level of treatment decisions. The President ' s Commission Model Act would place a time limit of 48 hours on non-emergency initial assessments.²

Another approach is for providers to continue to do assessments. Where the assessor determined that inpatient or residential care was needed, prior approval of the plan would be required, except in emergency situations. Decisions of outpatient treatment would be subject to retrospective review by the plan.

Qualifications of decision-makers. Single State Agencies must develop standards for the qualifications required of personnel who do assessments and determine the level and duration of treatment. These standards should apply regardless of whether the decision-maker works for the plan or a subcontractor. The President 's Commission Model Act requires " acknowledged certification, " including American Society of Addiction Medicine (ASAM) or State certification.³

Financial incentives/disincentives on the decision-makers. There should be no financial risk imposed on personnel who do assessments and determine level and duration of treatment. Payment of these personnel should be on a straight salary or fee-for-service basis. The President' s Commission Model Act would appear to prohibit imposing financial risk on assessors.⁴

Criteria for decisions on level and duration of treatment.Criteria used by managed care plans or their behavioral health management subcontractors should be subject to review and approval by the Single State Agency, unless the plan uses criteria already approved by the SSA. The President 's Commission Model Act would require managed care plans to use ASAM or Cleveland Clinic criteria or other " nationally recognized...criteria " if approved by the Single State Agency.⁵

Public availability of criteria. Criteria should be available to any provider or agency that serves as an entry point to the treatment system and to any enrollee or enrollee 's family member upon request. The President 's Commission Model Act would require that the criteria be filed with the State agency which regulates managed care plans.⁶

Due process for denials or reductions of service. Managed care plans and their behavioral health management subcontractors should be required to provide written notice of the level and duration of services approved and of any services disapproved. That notice should explain why services were denied, if denied, and should spell out how a client can appeal the decision. The President 's Commission Model Act also would require this.⁷ Clients, their family or other designee, and treatment providers should have the right to file a grievance with the plan for outright denials of service, for reductions in previously approved services, and for approvals of services of less intensity or shorter duration than requested. Services currently being received by the enrollee should continue pending the grievance decision. Where the client or provider is dissatisfied with the grievance decision, there should also be the opportunity for a second-level appeal to a panel of independent clinicians.⁸ It may be useful to have a State-funded third party (a consumer advocate) assist the client in his or her appeal where that appeal appears to have merit.

Preserving the Continuum of Care and Treatment Diversity

We must preserve a treatment delivery system that can respond to the needs of a diverse population. The flow chart on page 15 shows one potential model for a treatment delivery system that provides care to both private and publicly funded clients. This combined system must preserve:

• Cultural diversity among providers

• Geographic diversity among providers

• Diversity of treatment intensity (i.e. inpatient, residential, intensive outpatient, outpatient, and aftercare)

The State managed-care licensure agency should impose requirements on plans as to the comprehensiveness of treatment modalities and settings offered by the providers comprising the plan 's network, as well as their geographic availability and cultural diversity. This would also be required by the President 's Commission Model Act.⁹ The State licensure agency should also require plans to cover services by a non-participating provider, when no participating providers offering similar services are available in the client 's area.

State Quality Assurance

The Single State Agency should review the State 's current licensure standards and seek authority to draft additional standards specific to alcohol and other drug dependency treatment, where necessary. State licensure entities should seek statutory authority to license any subcontractors that do assessments or make level or duration of treatment decisions for plans.

Managed care plans should be fully accountable for any decisions by their subcontractors and should report to the licensure entity any subcontractors they use and their financial arrangements. Managed care plans should also be required to develop written plans detailing the following:¹⁰

• Who will do assessments and their qualifications

• Assessment instruments to be used

• Protocols for emergency admissions

• Grievance procedures

• Criteria for choosing providers

• How reimbursement rates will be set

• How connections to other health systems, such as traditional medical care and mental health services, will be made

The AOD abuse portions of these plans should be submitted to the Single State Agency for review and approval. The Single State Agencies should monitor whether managed care entities have properly implemented their own service plans. State licensure entities should get statutory authority to impose intermediate sanctions on plans that fail to properly implement.

Grievances and their outcomes should be reported by plans to the State licensure entity. Those grievances involving alcohol and other drug dependency treatment should be clearly identified as such. The licensure entity should inform the Single State Agency of those grievances for the SSA to monitor.

There must be sufficient State personnel to adequately monitor the standards developed by the Single State Agency and the licensure entity. There also needs to be sufficient statutory authority for the State to enforce its standards.

Managed care plans should be required to collect and report to the State any data that indicates the amount of access to and type of AOD dependency treatment services they have covered. This data should be published by a State entity in a format that permits comparisons between plans and between managed care generally and fee-for-service.¹¹

For Medicaid-funded services, the Single State Agency should monitor the effect of reimbursement rates on access and quality of services.

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