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Purchasing Managed Care Services for Alcohol and Other Drug Treatment:

Essential Elements and Policy Issues

Technical Assistance Publication Series

16

Financing Subseries, Volume III

Jeffrey N. Kushner

Development Panel Chair

Stephen Moss, Ph.D.

Consultant and Writer

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Public Health Service
Substance Abuse and Mental Health Services Administration
Center for Substance Abuse Treatment

Rockwall II, 5600 Fishers Lane
Rockville, MD 20857

This publication is part of the Substance Abuse and Mental Health Services Block Grant technical assistance program. All material appearing in this volume except quoted passages from copyrighted sources is in the public domain and may be reproduced or copied without permission from the Center for Substance Abuse Treatment (CSAT) or the authors. Citation of the source is appreciated.

This publication was prepared under contract number 270-93-0004 from the Substance Abuse and Mental Health Services Administration (SAMHSA). Gayle J. Saunders, of CSAT, served as the Government project officer.

Appendix C of this publication was written by James B. Bixler, M.S., under contract 270-91-0007 from CSAT. Sandra M. Clunies, M.S., of CST, served as the Government project officer.

The opinions expressed herein are the views of the authors and do not necessarily reflect the official position of CSAT or any other part of the U.S. Department of Health and Human Services.

Introduction

State alcohol and other drug (AOD) authorities find themselves in the midst of revolutionary changes now occurring in the health care and AOD treatment fields. Regardless of the eventual outcome of national health care reform efforts, States are continuing to enact legislation that is rapidly transforming the service delivery landscape. More than 30 States are in the process of legislating some form of health care reform, and most of these reform efforts include the delivery of AOD treatment services with some form of managed care at their core.

Because many managed care organizations (MCOs) have little experience with AOD treatment among noncommercial populations, the State AOD directors must assume a primary role during this turbulent time. State directors must advocate aggressively for the needs of uninsured and publicly insured populations.

Directors can best achieve this role by maintaining their access to the expertise of today's publicly funded treatment providers. These treatment providers, after years of providing services to these challenging and disempowered populations, have developed a wealth of knowledge and experience about how to reach out to and treat these groups.

Managed care consists of a set of health care management tools that have the capacity both to increase the overall quality of a treatment system dramatically and to wreak havoc. Managed care initiatives must be well-conceptualized, carefully developed, closely monitored, and strongly enforced. A strong managed care contract must be developed to deal with a set of particular components. Such a contract must:

• Specifically address all key treatment issues

• Specify expectations

• Identify means to monitor compliance

• Offer strategies to enforce both the spirit and the letter of the contract

Public AOD treatment systems have been largely exempt from the impact of the managed care movement that has swept through the rest of the health care industry. This exemption is quickly evaporating. In this new environment, the AOD field must seize the opportunity to frame the debate. State AOD authorities and others involved in the field need to ensure that they play an active and knowledgeable role as new AOD treatment paradigms are being created.

Last Updated 11-7-02