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Managed Care Payment Systems

Colorado

Intervention Target Population Evaluation Design/Findings
  • Implemented 10/1/01.
  • Risk-based, performance-based contract between county and consortium of service providers.
  • Contract included the identification of risk-sharing formulas, penalties, and performance-based incentives.
  • Provider had responsibility for delivering intensive residential care, moving children to less restrictive levels of care, ensuring availability of prevention and intervention services.
  • Established per client rate paid to consortium for case coordination and residential treatment.

Children:

  • ages 10 and older;
  • at high risk of or experiencing "placement drift";
  • at significant risk of aging out of the system;
  • in high-cost residential care.

Implemented in Arapahoe County.

  • Final evaluation report received 8/25/04.
  • Random assignment of eligible children to experimental (managed care) and control (traditional fee-for-service) groups.
  • 84 children in experimental group and 58 in control group as of 03/03.
  • Demonstration terminated early (06/03) due to: (1) State budget problems; (2) low county participation; (3) staff turnover; and (4) difficulties in developing a fixed rate.
  • 44% of experimental group placed within one month, versus 71% for the control group. Attributed to control group participants being placed on waiting lists more quickly than experimental group, given the structured admission process for managed care services.
  • Sample sizes insufficient to measure outcomes post-discharge due to early termination of demonstration.
  • State noted a trend toward shorter lengths of stay and improved outcomes for experimental group.

Connecticut

Intervention Target Population Evaluation Design/Findings
  • Implemented 7/9/99.
  • Managed care model to address high needs and costs for children with behavioral, mental health, and educational problems.
  • Contracts established with two local service agencies (LSAs) to provide a continuum of services in treatment facilities and community-based settings.
  • Services included case management, group care, home-based services, outpatient services, residential treatment, and aftercare.
  • LSAs paid a fixed rate for each referred child, equal to the average cost of 12 months of residential placement.
  • State and LSAs shared risk. LSAs responsible for costs up to 110% of the fixed rate.

Children:

  • Ages 7 through 15
  • With significant behavior problems
  • With an authorized placement in residential care or a group home.

Operated in 2 of the State’s 5 administrative regions.

  • Final evaluation report received 7/03.
  • Random assignment design. Sample of 79 children in experimental group and 78 children in control group.
  • State reported difficulties creating and managing a comprehensive service system under a single-rate payment system.
  • Experimental group children received more case management, family support, and transportation services than control group children.
  • Experimental group children received less frequent medication/treatment monitoring, residential treatment, and inpatient hospitalization than control group children.
  • During first year of demonstration, experimental group children spent less time in residential care (45% of placement days) compared to control group (64% of placement days).
  • Experimental group children placed more often in in-home settings. At 12 months, 36% of children in experimental group and 11% of children in control group were in an in-home placement.
  • No significant differences between experimental and control group in mental health outcomes.
  • Demonstration discontinued in February 2002 given statewide reform of behavioral health system and inadequate referrals to sustain LSA contractors.

Maryland

Intervention Target Population Evaluation Design/Findings
  • Implemented 1/1/00.
  • Contract with licensed child placement organization to serve as lead agency using managed care payment system.
  • Agency provided case management, placement, permanency planning, and support services to referred children.
  • Agency received a fixed sum to provide services regardless of children’s actual placement status and service needs. Cost savings redirected to enhanced services for project participants.
  • Agency risked financial loss if costs for the enrolled population exceeded fixed rate.

Children in State custody: (1) who entered out-of-home care placement directly from home following a dispositional hearing; (2) entered out-of-home care from kinship care; or (3) 5 years old or younger who were already placed in out-of-home care.

Implemented in Baltimore City.

  • Interim evaluation report received 10/02.
  • Random assignment design.
  • 500 cases assigned to experimental group and 250 cases assigned to control group.
  • Demonstration terminated early in December 2002 due to several implementation challenges:
    • Role of lead agency was not clear to all parties;
    • Agency was unfamiliar with local out-of-home care population and their issues and needs;
    • Fixed rate was insufficient to cover lead agency’s costs of care.
  • No significant differences between experimental and control groups in overall proportion of children exiting out-of-home care; however, experimental group had a significantly higher rate of exits from out-of-home care to adoption than the control group.

Michigan

Intervention Target Population Evaluation Design/Findings
  • Implemented 10/1/99.
  • State developed managed care contracts with non-profit providers, for-profit providers, and community mental health centers in 6 counties.
  • Provided wraparound services, including: (1) counseling; (2) in-home family services; (3) parenting education and training; (4) respite care; (5) household management training; (6) incidental parent support services; (7) shelter care; (8) foster family care; and (9) residential group care.
  • Providers paid fixed monthly rate per child. State re-negotiated contracts in October 2001 to shift more risk to providers.

Title IV-E eligible children:

  • previously placed in out-of-home care; or
  • placed out-of-home and determined to be suitable for reunification; or
  • determined to be at risk of placement; or
  • in residential care and suitable for return to the community.

State narrowed eligibility criteria in October 2001 to serve only children in out-of-home placement.

  • Final evaluation report received 1/04/05.
  • Random assignment design.
  • 171 children (83 families) assigned to experimental group and 101children (65 families) to control group.
  • Barriers to program implementation included low enrollment and problems with maintaining cost neutrality.
  • Lack of clear distinction in the treatment model used for experimental versus control group families may have compromised the validity of evaluation findings. “Wraparound Services” was already prevailing service model in many Michigan counties at the time the demonstration began.
  • Higher than expected costs throughout the life of the demonstration.
  • Families in experimental group received support services, (e.g., respite care, job training), concrete in-kind assistance (e.g., help with food, clothing, or housing), child education, and medical services at significantly higher levels than control group families.
  • No statistically significant differences between experimental and control group families in the placement avoidance, exits to permanency, placement duration, placement stability, and maltreatment recurrence .

Washington

Intervention Target Population Evaluation Design/Findings
  • Implemented 3/27/02.
  • Use of blended, flexible funds designed to serve children at home or in least restrictive community settings.
  • Contracted care coordinators facilitated child and family teams and brokered services according to individualized service plans.
  • Services for children included out-of-home placement services, crisis foster care, 24-hour crisis intervention services, respite care, and therapeutic care.
  • State had option of implementing demonstration in as many as 6 counties. Only implemented in two counties (Spokane and Clark Counties).
  • State terminated demonstration early in June 2003 due to lower than expected referrals and problems contracting with service providers.

Children aged 8-17: (1) in need of mental health or special education services; (2) with a DSM diagnosis; and (3) at risk of entering or already placed in high-cost group care or high-cost family foster care.

Eligibility criteria later expanded by including children ages 6 and 7 and by removing requirement for a DSM diagnosis.

  • Project termination summary received 3/12/04.
  • Random assignment design.
  • State originally planned to enroll 45 children in the experimental group and 45 children in the control group in Clark County. As of 5/03 there were only 8 children in the experimental group and 7 children in the control group.
  • Despite expansion of eligibility criteria, mental health authorities in other sites did not commit to the demonstration project and community service partners did not designate local funds to a managed care initiative.
  • Barriers to implementation included: (1) inadequate payment rates; (2) provider’s lack of experience with children needing group care; (3) confusion over roles and responsibilities of county case managers and contracted service providers; (4) philosophical differences between counties and community service providers regarding definition and goals of “wraparound services; (5) changes in leadership; and (6) lack of communication among stakeholders.
  • Few outcome findings available due to early project termination and very small sample sizes.
  • Some evidence of more positive changes in relationships between children, caregivers, and their siblings in the experimental group than in the control group.

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