Managed Care: What to Look for, What to Ask

By: the Center for Mental Health Services/Knowledge Exchange Network

What Is Managed Care?

What is now called "managed care" began in the 1940s with Health Maintenance Organizations (HMOs). Families getting medical care at HMOs were urged to get yearly checkups, and to seek preventive care and early treatment in case of illness. This proved to be cost-effective.

As health care costs rose, employers, for their employees, began to sign contracts with companies offering to "manage" health care. The managed care company organizes doctors into cost-conscious groups. Since the 1980s, more and more employee benefit programs have contracted with managed care companies. There are now hundreds of managed care companies. Their rules differ. Contracts change from year to year.

In general, managed care pays for what is "adequate" and "medically necessary," using the least costly alternative. Keep in mind:

• Managed Care Means Controlling Health Care Costs.
• Managed Care Discourages Unnecessary Hospitalization.
• Managed Care Discourages the Overuse of Specialists.
• Managed Care Services Depend on the Contract.

States are now looking to the managed care industry to provide public health care, including mental health and related services. In the past, State and local governments allowed service providers to bill Medicaid and Medicare directly, after the services were provided, on a "fee for service" basis. With managed care, providers will be under contract with the managed care company. The company may expect to authorize each piece of service they consider "medically necessary."

Managing care is harder than managing dollars. For people with long-term mental illness, managed care is a new way of delivering services that has not been tried before. This overview, for consumers of managed mental health care-and their families, describes:

What to Look For

What to Ask

Providers Have Organized Into Networks.
What is an HMO?
A PPO?

Consumers* may be offered several health insurance plans, at different prices. Managed care companies often use doctors and providers willing to lower their fees and work within "practice guidelines." In general, the greater the choice of providers and services, the more the consumer must pay.

*Individuals who receive mental health services use various terms to describe themselves, such as consumers, survivors, patients, clients or recipients. While respecting individual preference, this document uses the term "consumer."

There are two major types of provider groups, or networks:

A Health Maintenance Organization (HMO) is a prepaid health plan. For a fixed fee per year, an HMO provides enrollees a range of medical services, both inpatient and outpatient. Doctors, on salary or contract, may work in a central facility or in a number of different places. Generally, you must use the providers who work for the HMO.

A Preferred Provider Organization (PPO) is a group of independent providers in private offices offering services at a discount to the managed care company. The plan distributes a list of participating doctors. In both PPO and HMO plans with a "point-of-service" option, you may pay more if you use a doctor outside this group.

What Services Are Provided? What Services Are Excluded?

With managed care, each benefit package is determined by a contract developed by an employer or your State. There is no standard. If you have a choice of plans, review and select your plan carefully. Before joining a plan, talk with contracted medical providers and enrollees whose needs are similar to your own. Ask: Are the benefits described on paper authorized for people with medical conditions like mine?

Review the benefit package to be sure that you are receiving all the benefits you need. If you have a "pre-existing condition" (such as a mental illness), be sure you are covered. If you need mental health care or drug and alcohol treatment services, be sure that these services are covered in the benefit package.

Mental health benefits may be limited. Maybe a contract allows up to 30 days of inpatient care and 20 outpatient sessions a year. There may be a maximum sum of money available for your care in a year or over your lifetime. Some benefit packages use words like "adequate mental health care" or "care where medically necessary." Call and ask for more details. Ask:

• Are the services I need covered by the plan benefit package?
• How long will it take to get hooked up with a therapist? Will I have a choice?
• What does "medically necessary" mean?
• For hospital care, what is the maximum and average length of stay?
• For outpatient care, what is the maximum and average number of visits a year?
• Will my plan pay for medications? Is there a limit on the number or total cost of medications each year?
• At what point does my therapist have to ask approval for additional sessions?
• What other services (e.g., housing assistance) are available within the plan? Is there a limit on these services?
• How do I appeal decisions and file a grievance if I am not satisfied with the services being provided?

Often, therapists may be social workers, psychologists, or nurses, supervised by doctors. Benefit packages may be geared to emergency and acute care, providing for hospitalization and outpatient services. In response to a crisis, enrollees may be allowed limited care, such as 4 days in the hospital or 8 outpatient sessions. Sessions to monitor medications may be as short as 15 minutes.

Many plans ask enrollees to pay a fixed sum of money toward each bill. This fee, called a "co-payment" or "co-pay," may be $5 or $10 per visit or prescription. The co-pay may be higher for mental health care than for other services. There may also be "deductibles" where you have to pay a set amount for services before the plan begins to cover these expenses. Ask about these costs.

When benefits are used up, people go without care or pay the total cost out-of-pocket. Sometimes, extensions of benefits are possible. Ask what can be done to continue services.

What are the Benefits and Drawbacks of Managed Care, Especially for Public Mental Health Services?

Managed care controls medical costs mostly by limiting hospitalization, applying "standards of care" for most conditions, and contracting with exclusive providers. Managed care companies seek to provide less expensive, less restrictive care.

Possible Benefits:

• Improved facilities. Consumers of public mental health services may have access to more attractive facilities and better trained medical providers, located closer to home.
• Expanded choices. There may be additional alternative service options in the community. This includes treatment services (day treatment, residential services, intensive outpatient care, home therapy, telephone counseling) and support services (self-help centers, psycho-social programs).
• Money saved can be used to expand outpatient benefits, reduce member costs, or help make health insurance affordable to more people.

Possible Drawbacks:

• If hospitalization is denied without offering alternatives for intensive care, a person's symptoms may get worse.
• People with long-term mental illness may need more than short-term acute care preferred by managed care.
• Continuity of care may be difficult when people get short-term treatments at different locations. Protecting confidentiality also might be troublesome.
• Companies managing the mental health care may change, potentially disrupting services.

What is the Role of the "Primary Care Physician?"
How Does One choose This Person, or Specialists?

In most HMOs and some PPOs one medical provider is responsible for monitoring an individual's overall health care needs. Because this person must approve or refuse your use of services, he/she is often called the "gatekeeper." Some plans do not allow you to refer yourself for mental health services.

The gatekeeper may recommend a specialist in the group. The plan may provide a list. It probably will have a phone number to call for referrals. In choosing a gatekeeper or specialist, consider:

• Is the person knowledgeable in dealing with your major complaints? Can he/she prescribe medications?
• Where is he or she located? Can you get there?
• Do you have a personal preference, such as working with a man or woman or with someone from a special ethnic group?

At the first visit consider: Can you talk with this person? Will he/she answer your questions? If you do not feel comfortable with the recommended provider, choose another person. Ask for another referral. Visit someone else within the plan.

At HMOs where medical providers may share a building, you may have just one medical chart including all laboratory reports. This helps your primary care physician know what the specialists are doing and what medications have been prescribed.

For mental health care, records should be kept separately and shared with other doctors only if you sign a consent form.

What is the role of the Case Manager?

The title "case manager" or "care manager" is used to mean different things in different places. If a person goes by such a title, ask him or her what they see as their role and what they do.

The case manager working for a public or nonprofit human service agency may be your advocate. Acting as a broker, this person may try to get you more services. This person may also act as your therapist.

At the managed care company, the case manager's job is to assure quality care and to control costs-by authorizing only what is considered necessary and part of the covered benefits. The case manager is often a person at the end of a phone, working with providers regarding what the managed care plan will pay for. In most plans they must approve, in advance, each day of hospital care and each session of outpatient care. The managed care reviewer or case manager may:

• Authorize the requested treatment
• Refuse a request to start treatment
• Suggest a lower-cost alternative
• Deny further treatment such as more hospital days or more outpatient sessions.

The managed care case manager is likely to be a social worker or nurse. Consumers may have little contact with their case manager. It is usually the medical provider who tells the case manager about a consumer's situation.

What is the role of Membership Services?

With managed care, every employer, group, or State has a different contract. Contracts may change from year to year. Enrollees need someone to call with questions.

Managed care companies have a well-publicized toll-free phone number called membership services or customer services. The larger plans can be phoned 24 hours a day, 7 days a week. This unit may pre-authorize an evaluation and refer you to a suitable medical provider in the group. Membership or customer services:

• Can explain benefits. For mental health care, your plan may include limited numbers of hospital days and outpatient therapy sessions a year.
• Can tell you what benefits you have already used. For example, if you have used 8 outpatient sessions, 12 sessions might remain.
• Can negotiate. You can ask: Is there flexibility? Can I substitute an alternative service for inpatient days?
• Collects complaints about providers. Based on complaints, the plan may make changes in the services being provided, improve quality, or stop using a therapist or hospital.

What Are Your rights Within Managed Care?

Managed care is a business. Guidelines on how managed care systems should operate are included in any contract your State or employer signs with a managed care company. States may also set regulations for this purpose. In addition, existing State and Federal laws protecting your rights should be honored in managed care systems.

Managed care is a new system of delivering health care services and you may find changes in certain rights you had before. Most health care plans have a statement of patient rights. Ask for a copy of this statement and read it carefully. Many plans also use results from consumer satisfaction questionnaires to get their contracts renewed. In general:

• You have the right to be treated with dignity.
• You have the right to clear information about benefits.
• You have the right to a clear explanation of your condition and treatment.
• You have the right to updated lists of doctors in the network, and the right to change doctors or therapists.

With managed mental health care, treatment is authorized by a case manager using "treatment standards or guidelines"; this often means that nurses and social workers are making treatment decisions by telephone. Your questions about your proposed care will educate them. With any plan, ask:

• How do I access service? Must I be referred by a medical provider in the group, or may I call directly and request mental health services? Is there a phone number to call? Is it available 24 hours a day, every day?
• Do I have the right to participate in decisions involving my treatment? The right to talk to reviewers? The right to file a grievance? Whom do I call? Where can I write?
• Do I have the right to refuse a recommended treatment?
• Will I receive ongoing therapy or just supervision of prescribed medications? Must I take prescribed medications to get therapy?

What Are Grievance Procedures in Managed Care?

When asked to authorize care, the managed care company worker or case manager follows a set of guidelines.

The company should have published procedures describing an appeal or grievance process and should give this to you when you enroll. Consider asking for this in advance, when "shopping" for and comparing plans. For mental health care, some contracts say that medical providers, not consumers, may appeal in a dispute. The appeal process is often two layers, based on phone calls and a review of your medical records. Your therapist asks for a review by a physician, and then perhaps another review by a second physician, both usually employed by the managed care company.

In a dispute, consumers may ask to speak to the managed care reviewer or supervisor. The reviewer may ask to speak with the consumer. Such direct contact, however, is rare. It may be difficult to have direct contact with the reviewer and you may be given a phone number or address to express your concerns. Take advantage of any opportunity to speak with a reviewer of your care. The most consumer-sensitive contracts may establish a committee, including consumers and medical providers, to examine areas of dispute and to advise the managed care company.

If My State Medicaid Program Moves to Managed Care, Will I See a Big Change?

States wish to control their health care costs. In many cases, to start managed care for Medicaid services, the State must first get permission, a "waiver," from the Federal Health and Financing Administration (CMS). Before hiring a managed care company for Medicaid services, the State puts out a request for proposals. Generally several managed care organizations submit bids. The State selects one or more of these bidders and signs a contract with one or more managed care companies.

For States, this contract is a critical document, a new tool in health care delivery. Consumer advocates will need to play as big a role as possible at the State level before a contract is signed or renewed. To find out what is going on in your State with managed mental health care, or to get involved, call your State department of mental health or the Medicaid office. Or call your State consumer or family organization or mental health association.

If public mental health services are provided through managed care, there may be a big change for the consumer. This depends, mostly, on the amount of money budgeted for services but also on safeguards built into the State's contract. Here are some questions to ask concerning your State's plans:

• For the more medicalized mental health services such as inpatient, outpatient and partial hospital care-
• Is this a "capitated" system, with a fixed payment per person covered? How much money does the State pay per person? Is this close to previous budgets?
• Will the same medical providers be included in the new network? Yesterday's publicly funded therapists may have the most experience caring for people with long-term mental illness.
• Are yearly mental health benefits for an individual limited? Will there be a cost or co-payment for treatments or medications?
• For other supports and services such as intensive case management, supported housing and employment, psychosocial rehabilitation, social centers, home care, respite care, or consumer-run services-
• Will these be provided through the managed care system?
• Will the State and counties continue to fund and run these nonmedical services as a community support system?
• Will grievance procedures include a way for consumers or families to directly appeal a denial of care?
• Who will be evaluating the service system after the contract is signed? Is there an external review committee and some way to advise the company to change policies or procedures?

For mental health, managed care is a new way of delivering services that has not been tried before. Payers are watching the costs and want good results. But consumers are most concerned about services that promote recovery. As States move toward signing contracts with managed care companies, it is important for consumers to evaluate the benefits and make their voices heard. An informed consumer is the best advocate. Ask questions! Stay involved! Speak up!

FOR MORE INFORMATION

The Center for Mental Health Services
National Mental Health Services
Knowledge Exchange Network (KEN)
P.O. Box 42490
Washington, D.C. 20015
(800) 789-2647 (voice)
(301) 443-9006 (TDD)
(800) 790-2647 (Bulletin Board)

Consumer Managed Care Network
c/o National Association of State Mental Health Program Directors
66 Canal Center Plaza, Suite 302
Alexander, VA 22314
(703) 739-9333

National Empowerment Center*
20 Ballard Road
Lawrence, MA 01843
(800) POWER 2 U

National Mental Health Consumers'
Self-Help Clearinghouse*
1211 Chestnut Street, Suite 1000
Philadelphia, PA 19107
(800) 553-4KEY