Behavioral Health Integration in Medi-Cal: A Blueprint for California FEBRUARY 2019 Contents The Authors 3Executive Summary This paper was prepared by Logan Kelly, MPH, Guiding Principles senior program officer, and Allison Hamblin, Goal MSPH, senior vice president, from the Center Recommendations for Health Care Strategies; and Stephen Kaplan, LCSW, principal of Steve Kaplan Consulting. The 6Introduction Center for Health Care Strategies is a national nonprofit policy center dedicated to improving 6Background the health of low-income Americans. 8California’s Care System Funding About Well Being Trust Well Being Trust is a national foundation dedi- 10Other States’ Approaches cated to advancing the mental, social, and 12Guiding Principles, Goal, and Recommendations spiritual health of the nation. Created to include Guiding Principles participation from organizations across sectors and perspectives, Well Being Trust is commit- Goal ted to innovating and addressing the most Recommendations critical mental health challenges facing America, and to transforming individual and community 17 Conclusion well-being. 18 Appendices A. State Case Studies Learn more about Well Being Trust at www.wellbeingtrust.org or on Twitter B. Key Principles for Measuring Enrollee Outcomes @wellbeingtrust. 24 Endnotes About the Foundation The California Health Care Foundation is dedicated to advancing meaningful, measur- able improvements in the way the health care delivery system provides care to the people of California, particularly those with low incomes and those whose needs are not well served by the status quo. We work to ensure that people have access to the care they need, when they need it, at a price they can afford. CHCF informs policymakers and industry lead- ers, invests in ideas and innovations, and connects with changemakers to create a more responsive, patient-centered health care system. For more information, visit www.chcf.org. California Health Care Foundation 2 Executive Summary People with behavioral health — mental health and/or $$ County Drug Medi-Cal for SUD services, either substance use disorder — conditions often experience through the Drug Medi-Cal Organized Delivery poor health across all domains. While they have higher System pilot programs or through the traditional rates of major chronic illnesses, they are less likely to (and more limited) standard Drug Medi-Cal receive preventive care and often experience a lower programs. quality of care for their physical health needs. Individuals with a diagnosis of serious mental illness (SMI) or sub- The disconnected responsibilities for these services limit stance use disorder (SUD) die on average over 20 years the incentives for each entity to invest in whole-person earlier than individuals without such a diagnosis, often care as well as prevention and early intervention across from preventable physical illnesses. People with behav- the continuum of needs. Fragmentation in the current ioral health diagnoses incur costs that are four times system often results in critical disruptions in care and a greater than those without, with the difference largely lack of care coordination, which lead to poor health and attributable to increased physical health care spend- social outcomes as well as increased health care costs. ing. Among the over 13 million California residents who receive care from the Medi-Cal program, 5% of enroll- It is an axiom in health care that every system is perfectly ees account for over half of all spending — and 45% of designed to get the results it achieves. In Medi-Cal, if this high-cost population has a diagnosis of SMI. And, in California aims to meaningfully improve outcomes for California as in other states, mental illnesses and SUDs people with behavioral health needs, the systems that are more prevalent in people with lower incomes. serve them must be redesigned. Effective redesign must address three pervasive challenges: (1) fragmentation This paper puts forth an ambitious framework to of physical and behavioral health care for people with transform a fragmented system in California in which SMI and/or SUD, particularly for those with co-occurring Medi-Cal enrollees with complex behavioral and physi- chronic physical diseases; (2) disparate systems of mental cal health needs often fail to receive needed care that health care for mild to moderate versus severe levels of must be coordinated across multiple and disparate ser- need; and (3) separation of mental health and SUD ser- vice delivery systems. This framework builds on areas vices for people needing both types of services. of strength within the current structures while address- ing the systemic barriers to improving care due to the The recommendations in this paper were developed current organization, financing, and administration of through a series of three meetings held between June physical health care, mental health care, and SUD care and October 2018 and attended by leaders with deep in Medi-Cal. experience in county behavioral health departments, behavioral health provider organizations, state agencies, The disparate funding streams and decentralized struc- Medi-Cal managed care plans, consumer advocacy, pol- tures of behavioral health care in Medi-Cal have evolved icy research, and philanthropy (the “work group”). The over decades through a series of legal, political, and meetings were informed by presentations from leaders financial arrangements. As a result, most beneficiaries from other states on different approaches to behavioral who need care for chronic physical, mental health, and health integration in Medicaid, as well as synthesized SUD issues confront three systems: interview findings from a broad group of California stakeholders. $$ Managed care plans for physical health services and for non-specialty mental health services $$ County mental health plans for specialty mental Integrated care. The delivery, coordination, health services and payment for care related to the full continuum of an individual’s physical and behavioral health needs, as managed by a single accountable entity. Behavioral Health Integration in Medi-Cal: A Blueprint for California 3 Guiding Principles Recommendations The work group developed a core set of guiding prin- 1.Assign responsibility for physical and behavioral ciples for an integrated system of physical and behavioral health services to Medi-Cal managed care plans, health care that would lead to better outcomes for while allowing delegation to interested counties enrollees. and/or regions to the extent that such partnerships meet a single statewide standard for integration, qual- $$ Provide an accessible and well-coordinated ity of care, and accountability. continuum of care, from prevention to recovery services. 2.Implement statewide integrated care for Medi-Cal enrollees through a phased process beginning in $$ Deliver person- and family-centered care that is 2020 and completed by 2025, in order to foster culturally responsive and advances health equity. a transition that ensures continuity of care and $$ Promote hope and wellness while building on promotes long-term sustainability. individual, family, and community strengths. 3.Ensure that accountable entities develop the $$ Deliverhigh-quality services across care settings internal capacity, expertise, and infrastructure required while ensuring choice in the care provided. to effectively manage integrated physical and behav- ioral health care. With these principles in mind, and with consideration of 4.Identify immediate and long-term opportunities experience in California and in other states’ Medicaid to reform existing state and local behavioral programs, the work group established a clear goal to health funding mechanisms, statutes, regulations, guide system redesign, as well as nine recommendations and/or other policies to promote the delivery of inte- to achieve this goal. grated care. 5.Incorporate principles of risk and value-based pay- Goal ment into the financing of behavioral health services By 2025, all Medi-Cal enrollees will experience high- in order to align incentives with desired outcomes. quality, integrated care for physical health, mental health, 6.Engage stakeholders to ensure that accountable and substance use needs, with all of an individual’s care entities are responsive to individual and community managed by a single entity accountable for payment, needs, and that the new system of integrated care administration, and oversight. delivers on the promise of improved consumer and family outcomes. 7.Foster integrated physical and behavioral health care for dual eligible enrollees by promoting the alignment of Medicare and Medi-Cal benefits in accountable entities. 8.Establish standard process and outcome measures and accountable, transparent systems to monitor and evaluate the ongoing impact of integration across the state. 9.Strengthen the behavioral health workforce to ensure access to high-quality care during and after the transition to integrated care. California Health Care Foundation 4 These ambitious recommendations aim to ensure that Jonathan Freedman, MSPH Medi-Cal enrollees and families receive the prevention, Vice President treatment, and recovery services needed to achieve Health Management Associates their health and quality-of-life goals. As informed by the Liz Gibboney, MA approaches of other states in tackling the challenges Chief Executive Officer of poor health outcomes and high costs for individu- Partnership HealthPlan of California als with complex physical and behavioral health needs, this paper describes an achievable statewide pathway Kim Lewis, JD toward integrated care delivery by 2025. California now Managing Attorney has the opportunity to take bold action to become a National Health Law Program national leader in improving the health and well-being of Sandra Pisano, PsyD Medi-Cal enrollees. Grounded in principles of recovery, Director, Behavioral Health equity, choice, and transparency, these recommendations AltaMed Health Services point to a system that is far more capable of producing desired outcomes for Medi-Cal enrollees with behavioral Louise F. Rogers, MPA health needs, and for California as a whole. Chief San Mateo County Health The recommendations in this paper were universally Al Senella endorsed by the members of the work group, who rep- President and Chief Executive Officer resent a broad array of stakeholders and regions across Tarzana Treatment Centers the state: Alice J. Washington Alfredo Aguirre, LCSW Integrated Care Consumer Behavioral Health Services Director County of San Diego Rachel Wick, MPH Senior Program Officer Molly Brassil, MSW Blue Shield of California Foundation Director, Behavioral Health Policy Harbage Consulting Affiliations are for identification only and do not reflect Toby Douglas, MPP, MPH endorsement by the named organizations. Senior Vice President, National Medicaid Kaiser Permanente Former Director California Department of Health Care Services Vitka Eisen, MSW, EdD President and Chief Executive Officer HealthRIGHT 360 Donnell Ewert, MPH Director, Health and Human Services Agency County of Shasta Len Finocchio, DrPH Principal Consultant Blue Sky Consulting Group Former Associate Director California Department of Health Care Services Behavioral Health Integration in Medi-Cal: A Blueprint for California 5 Introduction It is an axiom in health care that every system is perfectly designed to get the results it achieves. In Medi-Cal, if A recent poll released by the California Health Care California aims to meaningfully improve outcomes for Foundation and Kaiser Family Foundation showed that people with behavioral health needs, the systems that approximately half of all Californians think that people serve them must be redesigned accordingly. with mental health or alcohol or drug problems do not receive the services that they need.1 Notably, these percentages are higher among respondents who have themselves sought behavioral health services. Medi-Cal Background enrollees with physical and behavioral health needs must People with behavioral health conditions experience navigate multiple separate systems to receive needed worse health and social outcomes. People with behav- care — often leading to confusion that may hinder access ioral health conditions are more likely to experience to care, stress, and increased health care costs. chronic physical conditions, poor social outcomes, and early mortality. They have higher rates of major chronic This paper puts forth recommendations to build an inte- diseases, such as diabetes, cancer, asthma, and hyper- grated system of care in Medi-Cal — one that brings tension — and an elevated risk for modifiable health risk together physical health, mental health, and substance behaviors, such as tobacco use and poor nutrition, which use services to treat the whole person. Currently, Medi-Cal further increases their likelihood of developing chronic enrollees with complex behavioral and physical health physical illnesses.2 Individuals with behavioral health con- needs often fail to receive needed care because they ditions are less likely to receive preventive health care must seek it across multiple disconnected service deliv- than people without these conditions, and often receive ery systems. The framework proposed in this paper lower-quality physical health care.3 Behavioral health builds on areas of strength within the current structures, conditions are also associated with increased rates of while addressing the systemic barriers to improving care homelessness, unemployment, poor educational perfor- due to the current organization, financing, and adminis- mance, and involvement with the criminal justice system.4 tration of physical health care, mental health care, and People with serious mental illness5 (SMI) die on average substance use disorder (SUD) care in Medi-Cal. 25 years earlier than those without SMI, and people with a drug dependence diagnosis die on average 22.5 years The disparate funding streams and decentralized struc- earlier than individuals without such a diagnosis — often tures of behavioral health care in Medi-Cal have evolved from preventable physical illnesses.6 over decades through a series of legal, political, and financial arrangements. As a result, most enrollees who People living in low-income households are more need care for chronic physical, mental health, and SUD likely to have serious behavioral health needs. Recent issues confront three separate systems. Navigation data showed that 4% of California adults have an SMI, across these systems is typically left to the consumer to whereas 9% of those living at or below the federal pov- figure out. erty level (FPL) and 6% of those with incomes between 100% and 200% FPL have an SMI diagnosis.7 While 7% Looking from the systems level, the disconnected of all California children had a serious emotional distur- responsibilities for health services in Medi-Cal limit each bance (SED), the prevalence was 10% among children entity’s incentives to invest in whole-person care, preven- living in households at or below the poverty line.8 And, tive care, and early intervention across the continuum of while 8% of California residents met criteria for substance needs. Fragmentation in the current system often results use disorder (SUD), people with a serious mental health in critical disruptions in care and a lack of care coordina- diagnosis are more at risk to experience an SUD — over tion, which lead to poor health and social outcomes, as 34% of adults with SMI and over 9% of children with an well as increased health care costs. SED have a co-occurring SUD.9 California Health Care Foundation 6 High health care costs associated with behavioral Integrating clinical delivery through systems integra- health diagnoses. These poor health and social out- tion of physical and behavioral health care. Integrating comes often lead to high health care costs. Nationally, the clinical delivery of physical and behavioral health ser- people with behavioral health diagnoses comprise 20% vices — often through expanding access to behavioral of the Medicaid population but incur 48% of all spend- health care in primary care settings — has been demon- ing, with spending per enrollee that is four times greater strated to improve health outcomes, significantly reduce than those without a behavioral health diagnosis.10 These health care costs, and promote patient-centered care.15 costs are largely attributable to increased physical health Despite these positive outcomes and cost savings, states care spending. For example, one study found over 80% encounter many barriers to promoting integrated care of the increased costs for people with comorbid men- at the clinical level because of siloed systems of financ- tal and physical health conditions were associated with ing physical, mental health, and substance use care. physical health expenditures.11 Therefore, many states are pursuing system integration approaches designed to support clinical integration Under the current systems of care, Medi-Cal enrollees and enable statewide transformation to improve health who incur the highest costs disproportionately have outcomes for Medicaid enrollees with behavioral health behavioral health conditions. Among the most costly 5% needs. of Medi-Cal enrollees — who account for over half of all Medi-Cal spending — 45% have a diagnosis of SMI, Increasingly, states are advancing system integration in more than double the percentage with diabetes. The Medicaid by pursuing initiatives to “carve in”16 behavioral total monthly cost of care for Medi-Cal enrollees with health benefits to be managed as part of comprehensive diabetes who receive SUD treatment is 60% higher than managed care contracts.17 Variations in state approaches for enrollees who do not receive this treatment, and that offer useful lessons to inform California’s Medi-Cal total monthly cost is 250% higher for individuals receiv- behavioral health integration strategy, and three state ing treatment for both SMI and SUD.12 case studies are detailed further in Appendix A. Fragmentation of physical and behavioral health services. In California and across the country, many Medicaid enrollees with complex behavioral and physical health needs are served by multiple systems — one that manages their physical health care, and separate systems that manage mental health and SUD services — resulting in a lack of care coordination across systems and poor health outcomes. Fragmentation of physical and behavioral health ser- vices has been shown to result in poor health status and increased health care costs.13 Co-occurring physical and behavioral health conditions may interact and lead to a worsening of symptoms and health outcomes.14 People with physical and behavioral health needs have often experienced a lack of understanding among their pro- viders of the relationship between their physical and behavioral health disorders, and may be prescribed mul- tiple and potentially conflicting medications that result in side effects or adherence challenges. Behavioral Health Integration in Medi-Cal: A Blueprint for California 7 California’s Care System Implementing integration at each of these levels is complicated by the complex landscape of funding, California was the first state in the country to pilot man- administration, and delivery of physical and behavioral aged care in its Medicaid program, beginning in the health services across California’s 58 counties. The models 1970s, and over time has moved the large majority (over of MCPs vary by county, and in their provision of specialty 80%) of enrollees, including children, adults, seniors, and behavioral health services, the counties also vary in their people with disabilities, into managed care plans. The utilization of county-operated services versus contracted management of mental health and SUD care in Medi-Cal external providers, interpretation of eligibility require- also has evolved over decades through changes to the ments, screening and assessment practices, service administration, delivery, and funding of behavioral health availability, populations served, and average spending services. The current system includes disparate funding per person.20 Health plans and counties use varied screen- streams and a decentralized structure to manage and ing tools to determine whether an enrollee meets criteria deliver services across multiple entities, often resulting in to be served by a county mental health plan, resulting in a fragmented experience of care for Medi-Cal enrollees widely disparate access to services across counties for an with physical and behavioral health needs. enrollee presenting with the same symptoms.21 Medi-Cal enrollees receive health services managed by System history and authorities. Originally established multiple entities, depending on their behavioral health by the Short-Doyle Act in 1957, California’s county-based needs. These include the following: mental health system has evolved over time — as has coverage for mental health conditions across the contin- $$ Managed care plans (MCPs), which contract with the uum of need. The first Section 1915(b) Medi-Cal Specialty state to manage all physical health services as well Mental Health Services Waiver was approved in 1995 and as mental health services for individuals with mild to modified in 1997, enabling the state to develop county moderate mental health needs. mental health plans to manage and deliver specialty $$ County mental health plans, which contract with the mental health services.22 This type of waiver allows the state to manage specialty mental health services for state to waive freedom of choice and provide services adults and children who have a covered diagnosis through managed care, and covers all Medi-Cal enrollees and meet criteria for impairment and intervention, that meet criteria for eligibility for specialty mental health which include less stringent criteria for children services. The Section 1915(b) waiver was most recently consistent with the Early and Periodic Screening, reapproved for a five-year period extending through Diagnostic, and Treatment benefit. June 30, 2020. Additionally, federal and state legislation and regulations have expanded covered benefits and $$ County alcohol and drug programs, including coun- eligibility for mental health services, including the 2014 ties participating in the Drug Medi-Cal Organized expansion of Medi-Cal MCP benefits to include treat- Delivery System (DMC-ODS)18 pilot program as well ment for mild to moderate mental health conditions. as counties providing standard Drug Medi-Cal state plan services. While Drug Medi-Cal services were Substance use disorder services in Medi-Cal have been administered and paid for by counties through state delivered through county alcohol and drug programs as contracts, under DMC-ODS counties serve as man- part of the standard Drug Medi-Cal state plan services. aged care plans with increased responsibilities for The Drug Medi-Cal Organized Delivery System (DMC- access to care and coordination with other systems ODS) pilot program, approved in 2015, was the first in of care.19 the country to leverage new federal Section 1115 waiver Integration of care for Medi-Cal enrollees must therefore authority to pay for residential treatment as part of a take place on three levels: (1) integrating physical and broader continuum of SUD treatment. DMC-ODS author- behavioral health care for people with SMI and/or SUD, ity was ultimately absorbed into California’s broader particularly for those with co-occurring chronic physical Medi-Cal 2020 waiver, which was also approved in 2015 diseases; (2) integrating mental health care across the and includes the Whole Person Care Pilots to coordinate continuum of need from mild to severe; and (3) integrat- physical health, behavioral health, and social services for ing mental health and substance use disorder services for specific target populations. people needing both types of services. California Health Care Foundation 8 As both the Section 1915(b) and Section 1115 waivers Before 1991, counties received funding for specialty expire in 2020, California now has a unique opportunity mental health services through the state budget appro- to develop a comprehensive, statewide approach to priations process, which led to unpredictable annual implementing an integrated system of care that helps all revenue.23 The 1991 and 2011 realignments transferred Medi-Cal enrollees and families to achieve their health administrative and financial control for multiple pro- and quality-of-life goals. The pathway to implementation grams, including specialty mental health and substance outlined in the recommendations in this paper leverages use disorder services, from the state to counties.24 the strengths of the existing system and lessons from pre- Subsequently, the passage of Proposition 30 in 2012 vious pilot programs as well as other states’ experiences. added constitutional provisions that require state and county cost sharing for unfunded mandates that may increase costs for 2011 realignment programs. The 2004 Funding passage of Proposition 63, the Mental Health Services Funding to deliver behavioral health services to Medi- Act, also significantly reshaped — and augmented — Cal enrollees consists of federal mental health Medicaid county mental health funding.25 matching funds as well as state-dedicated revenue sources that are not contingent on state appropria- Per capita revenues and expenditures are widely tions, including personal income taxes and sales taxes acknowledged to vary between counties.26 The cat- as well as vehicle license fees. Counties also contribute egorical funding sources for behavioral health services general funds for the delivery of behavioral health ser- are disconnected from how mild to moderate behav- vices. Counties are anticipated to receive $9 billion in ioral health services, as included in the MCP benefit, FY 2019 – 20 for the delivery of behavioral health services are financed: through state general funds matched by across multiple funding sources, as identified in Figure 1. federal Medicaid dollars. This fragmented funding and administration result in services and programs that are not aligned with the overall whole health needs of Medi-Cal enrollees. Figure 1. California County Behavioral Health Funding, by Source, FY 2019  20 Estimates –  Federal Mental Health Medicaid Matching Funds 34% • State General Fund ($180.7 million) 2% 3.2 billion • Other ($226.5 million) 2% 2% • Federal Substance Abuse Prevention and Treatment Block Grant ($227.0 million) TOTAL Mental Health $9.3 billion 5% • Federal SUD Medicaid Matching Funds ($488.0 million) Services Act 22% 1991 2.1 billion Realignment 14% 2011 1.4 billion Realignment 18% 1.7 billion Note: Other includes mental health block grants, Medicare, county general fund, and other grants. Source: California County Behavioral Health Funding (infographic), Mike Geiss, Geiss Consulting, prepared for CHCF, February 13, 2019. Behavioral Health Integration in Medi-Cal: A Blueprint for California 9 Implications for enrollee outcomes and costs. Other States’ Fragmentation in the current system can result in gaps in care and lack of care coordination that lead to poor Approaches health and social outcomes, as well as increased health Across the country, states have sought to improve health care costs. MCPs and county mental health plans do not outcomes and control costs for Medicaid enrollees with typically systematically share data; therefore, these plans behavioral health needs by integrating physical and as well as the providers that care for Medi-Cal enrollees behavioral health care. Historically, physical and behav- often lack comprehensive information about an individ- ioral health systems have evolved separately, and many ual’s physical and behavioral health conditions, referrals, states developed separate structures for managing and treatment plans. Additionally, Medi-Cal enrollees can these systems by carving out behavioral health benefits experience critical gaps in care when their mental health to be covered by prepaid inpatient health plans or the needs fluctuate between moderate and severe, as they fee-for-service system, and separated from managed may lose access to trusted providers and be required to care contracts. States that carve out behavioral health navigate referrals to transition between systems. benefits have sometimes undertaken efforts to improve care coordination and promote the clinical integration of The disconnected responsibilities for mild to moderate, physical and behavioral health care through colocation of specialty mental health, and substance use services limit these services. However, a growing number of states and the incentives to invest in prevention and early interven- policy experts have acknowledged that these carve-out tion services. MCPs may experience financial savings arrangements present significant barriers to establishing when, for example, an enrollee with a mild to moderate accountability, coordinating enrollee care, and improving condition deteriorates and transitions to the carved-out enrollee outcomes.28 county system.27 On the other side, while county behav- ioral health departments do provide some prevention Accordingly, states are increasingly carving behavioral and early intervention services as part of their broad func- health benefits into their Medicaid managed care orga- tions, county mental health plans have limited ability to nization (MCO) benefit package.29 Among the 39 states target early intervention services to Medi-Cal enrollees that use comprehensive risk-based MCOs, six reported with mild to moderate conditions. Similarly, while there carving out all behavioral health service types from MCO are potential cost savings to MCPs through early and contracts.30 In state fiscal year 2019, six states reported effective substance use interventions, the MCPs have actions to carve behavioral health services into MCO historically not focused on this population because the contracts, and two additional states reported plans to downstream treatment services are outside of their ben- implement additional integrated MCO contracts.31 efit obligations. Many states that have promoted integrated care models in Medicaid have used one of three approaches:32 $$ Comprehensive managed care carve-in. Behavioral health services are included in comprehensive MCOs, which may or may not subcontract with behavioral health organizations (BHOs) to manage these services. $$ Specialty plan. A specialty plan manages all physical and behavioral health services for enrollees with serious behavioral health needs. $$ Hybrid approach. A combination of the compre- hensive managed care carve-in and specialty plan approaches. California Health Care Foundation 10 Within each of these approaches, states use different managed care carve-in. The work group examined mul- implementation strategies. Many states phase in integra- tiple state models, including those of Arizona, New York, tion by population or by region. States may transition from and Washington. These three states’ approaches are a specialty plan to a hybrid approach or a comprehensive summarized in Table 1 and detailed in Appendix A. Table 1. Summary Matrix of State Approaches to Integrating Physical and Behavioral Health Services* ARIZONA NEW YORK WASHINGTON Medicaid enrollment 1.9 million 6.5 million 1.8 million Prior system Specialty behavioral health Specialty behavioral health Specialty behavioral health services carved out from MCOs services carved out from MCOs services carved out from MCOs. and managed by Regional and provided via fee-for-service. Regional Support Networks Behavioral Health Authorities. managed specialty mental health services and SUD services admin- istered via fee-for-service. Overview of approach Initiated integrated specialty Hybrid approach: Integrated Comprehensive carve-in approach plans for individuals with SMI, MCOs serve the general by implementing fully integrated then transitioned to hybrid population; these MCOs also managed care for all populations, approach that maintained manage separate specialty including the interim step of specialty plans while introduc- plans for individuals with SMI implementing regional Behavioral ing integrated services for the or severe SUD needs. Health Organizations to manage general population managed mental health and SUD services in by MCOs. most regions. Timeline Most populations transitioned Most populations transitioned Regions transitioned or are to integrated care between or are transitioning to integrated transitioning to integrated care 2014 and 2018. care between 2015 and 2019. between 2016 and 2020. Phasing Phased implementation by Phased implementation by Phased implementation by geography and population, geography and population, region, with regions opting in with early focus on individuals including later phasing in of to implementation phase. with SMI. children. Number of plans One integrated plan per Multiple integrated plans Multiple integrated plans region for individuals with SMI; per region. per region. multiple integrated plans for general population. Procurement of new Yes No; existing MCOs applied No; existing MCOs responded to integrated plans for qualification to establish a request for proposals to add specialty plans. behavioral health services. *The case studies in Appendix A provide additional information on each state approach, including details on implementation phases and state outcomes. Behavioral Health Integration in Medi-Cal: A Blueprint for California 11 Guiding Principles, Goal, $$ Deliver person- and family-centered care that is and Recommendations culturally responsive and advances health equity. $$ Promote hope and wellness while building on The recommendations in this paper were developed individual, family, and community strengths. through a series of three meetings initiated by the California Health Care Foundation and the Well Being $$ Deliverhigh-quality services across care settings Trust and held between June and October of 2018. while ensuring choice in the care provided. These meetings brought together leaders with deep experience in county behavioral health departments, With these principles in mind, and with consideration of behavioral health provider organizations, state agencies, experience in California and in other states’ Medicaid Medi-Cal managed care plans, consumer advocacy, pol- programs, the work group identified an overarching goal icy research, and philanthropy (the “work group”). The for improved care for Medi-Cal enrollees as well as nine vision for the work group was to develop a blueprint for recommendations to achieve this goal. greater integration of physical and behavioral health care in Medi-Cal, to address the poor health outcomes and high costs for enrollees with behavioral health conditions. Goal By 2025, all Medi-Cal enrollees will experience high- Each meeting included in-depth discussion on topics quality, integrated care for physical health, mental such as visions for an integrated system, desired out- health, and substance use needs, with all of an indi- comes of an integrated system, analysis of alternate vidual’s care managed by a single entity accountable approaches to integration, and considerations for imple- for payment, administration, and oversight. mentation. The meetings were informed by presentations from leaders from other states on different approaches Rationale. People with complex needs benefit from to behavioral health integration, as well as synthesized well-coordinated physical health and mental health and interview findings from a broad group of California stake- substance use care. However, very few Medi-Cal enrollees holders. During July and August, the authors of this currently experience this coordination. When consumers paper conducted interviews with 12 stakeholders, includ- and families are required to navigate fragmented sys- ing county behavioral health directors and behavioral tems of physical and behavioral health care, they face health providers, with the goal of broadening the work barriers to accessing high-quality services and are more group’s understanding of opportunities and challenges likely to experience poor health outcomes. A clear and in pursuing different pathways to integration. The work decisive timeline to implement broad system changes group provided ongoing feedback on recommenda- for all Medi-Cal enrollees will ensure that integrated care tion development, and the work group members listed becomes the norm rather than the exception, while at at the beginning of this paper endorsed all included the same time recognizing that it will take time to build recommendations. toward this vision. Guiding Principles These recommendations build on other research and ini- Accountable entity. A single entity accountable tiatives to examine and improve the delivery of behavioral for the payment, administration, and oversight health care for high-need Medi-Cal enrollees, and are of physical and behavioral health services for a grounded in a core set of guiding principles.33 These four population of enrollees. guiding principles developed by work group members Integrated care. The delivery, coordination, describe a vision for an integrated system of physical and and payment for care related to the full con- behavioral health in Medi-Cal that would transform the tinuum of an individual’s physical and behavioral delivery of care to achieve better outcomes for enrollees. health needs, as managed by a single account- $$ Provide an accessible and well-coordinated able entity. continuum of care, from prevention to recovery services. California Health Care Foundation 12 Integrated care can help to ensure that consumers and families receive the prevention, treatment, and recovery Recommendations services needed to achieve their health and quality-of-life 1. Assign responsibility for all physical and behav- goals, rather than having their access to services limited ioral health services to Medi-Cal managed care plans, by geography, available categorical funding sources, while allowing delegation to interested counties and/ or specific diagnoses. Integrating payment, administra- or regions to the extent that such partnerships meet tion, and oversight for all services can reduce barriers to a single statewide standard for integration, quality of information sharing, assure provider network continu- care, and accountability. ity when consumer and family needs change, and align incentives to invest in prevention, care coordination, Rationale. Based on careful consideration of other and ongoing recovery supports to foster hope and well- states’ approaches to integrating care, as well as Medi- ness. An integrated model may also yield cost savings Cal’s existing building blocks, bringing responsibility for through the more efficient use of resources, increased all physical and behavioral health services into Medi-Cal focus on prevention, and reductions in avoidable acute MCPs is the most reasonable starting point for integra- care utilization. tion. Including all behavioral health benefits in MCPs would align incentives for managing the full continuum of Integrated care models should be thoughtfully imple- physical and behavioral health services, while leveraging mented within an overall state approach that addresses the capabilities of MCPs to manage financial risk for the the holistic physical, behavioral, and social needs of com- full continuum of physical and behavioral health needs. plex and vulnerable Medi-Cal enrollees. The transition However, delegation arrangements between MCPs and framework should include readiness standards and apply counties could preserve county roles in managing all or lessons learned from previous initiatives, including Whole some portion of services for certain populations, as long Person Care Pilots, the Coordinated Care Initiative, the as each accountable entity demonstrates the ability to Health Homes Program, the Drug Medi-Cal Organized achieve and be accountable for maintaining designated Delivery System, the California Children’s Services Whole standards and outcomes for integrated care. To promote Child Model, innovations and best practices funded greater efficiencies, delegation arrangements should through the Mental Health Services Act, the expansion enable multi-county partnerships to manage services on of mental health benefits in MCPs to treat mild to mod- regional bases. All integrated entities, regardless of del- erate mental health conditions, and other county- and egation arrangements, must be uniformly accountable provider-based efforts to integrate physical and behav- for ensuring that their assigned populations have access ioral health services. By building on areas of strength to high-quality care across a full continuum of needs, and within the current system, and systematically addressing that members experience the benefits of integrated care the barriers to delivering high-quality integrated care, at the clinical level across care settings. California can advance statewide transformation and improved outcomes for Medi-Cal enrollees with behav- ioral health needs. Behavioral Health Integration in Washington Washington state has recently moved from a county/regionally managed behavioral health system to integrated man- aged care led by health plans. Here, the state is enabling regions to develop varying arrangements based on regional interest and capacity. For example, in Southwest Washington, the plans uniformly contract with a single administrative service organization (ASO) to manage all crisis services. In King County (which includes the city of Seattle), the county intends to subcontract with the integrated health plans to manage all specialty behavioral health services for the first year of implementation, with a long-term plan to follow. Note: See Appendix A for more information. Behavioral Health Integration in Medi-Cal: A Blueprint for California 13 Just as California’s 58 counties utilize six models for Medi- commitment among all key stakeholders. This approach Cal managed care, MCPs, counties, and regions will need will foster a mindful transition that minimizes risk to vul- to tailor their approaches locally while maintaining a sin- nerable consumers and communities, ensures continuity gle statewide standard for integration, quality of care, of care, and avoids destabilizing the infrastructure of care and accountability. Effective approaches will integrate delivery. system cultures to build on existing strengths and histori- cal knowledge in county systems to serve consumers and To promote timely transitions to integrated care by 2025, families with behavioral health needs. Stakeholders in the state should support counties in mitigating any sub- each county will need to consider and plan how to deliver stantial issues — including financial challenges — that integrated care that incorporates the full array of publicly may impede this transition. For example, the state may financed behavioral health services (including those that need to address county concerns with liability for risk, supplement Medi-Cal services, such as the prevention infrastructure development, and/or existing funding allo- or support services funded through the Mental Health cations. Managing these issues will likely be critical for Services Act, as well as the Substance Abuse Prevention counties to begin the transition as early as possible after and Treatment Block Grant and county general funds) 2020. and how to most effectively serve individuals with behav- ioral health conditions who are not enrolled in Medi-Cal, 3. Ensure that accountable entities develop the inter- by employing the full range of existing financing streams. nal capacity, expertise, and infrastructure required to Also, stakeholders will need to consider how to manage effectively manage integrated physical and behavioral counties’ responsibility and risk for systems that inter- health care. sect with clinical behavioral health services and will be affected by a transition to integrated financing of care, Rationale. Implementation of effective models will including but not limited to child welfare, county correc- require significant investments to ensure plan-provider tions, and homeless services. contractual relationships and develop the capacity of accountable entities to transform the administration of physical and behavioral health services. MCPs will 2. Implement statewide integrated care for Medi-Cal likely need to develop increased capacity and exper- enrollees through a phased process beginning in 2020 tise to manage the landscape of mental health and SUD and completed by 2025, in order to foster a transition services, including a deeper understanding of the reha- that ensures continuity of care and promotes long- bilitation and recovery-based models of care. Likewise, term sustainability. counties may need to develop increased capacity and Rationale. An ambitious timeline will create the impe- infrastructure to participate in delegation arrangements tus for change to improve care across California. While with accountable entities that meet the requisite criteria Medi-Cal enrollees should begin benefiting from more for integration. To ensure network adequacy and continu- integrated models of care as soon as possible, the ity of care during this system transition, the state should state should develop a rollout plan that reflects county/ initially require the managed care plans to work with regional preferences and the ability to meet readi- existing county behavioral health administrative entities ness standards. As the state learns from the different to maintain contracts with all existing providers that are approaches and experience of early implementers and certified in Medi-Cal and deliver specialty mental health, examines the outcomes achieved, these findings should SUD, and mild to moderate mental health services. The inform ongoing statewide implementation. Additionally, state should also ensure that accountable entities have the state should consider phasing in different populations established the required expertise and infrastructure by to address the complexities of transitioning behavioral using contract requirements or readiness reviews that health services for specific populations, such as children assess areas such as staffing, integration of information and youth. An implementation strategy that phases in technology and claims processing, and integrated utiliza- counties or regions as well as specific vulnerable popula- tion management. tions will help to ensure the necessary investments and California Health Care Foundation 14 While some of these financing and policy changes will be 4. Identify immediate and long-term opportunities to complex to address, early adopting counties and regions reform existing state and local behavioral health fund- can begin to pursue integration before all issues have ing mechanisms, statutes, regulations, and/or other been resolved. For example, the state could take action policies to promote the delivery of integrated care. to enable counties and regions to voluntarily contract Rationale. Current funding and policy structures hinder with managed care plans and could consider structures investments in long-term prevention, treatment, and to incentivize early adoption. Early adopters could also recovery capacity, as they reinforce silos, incentivize the look for opportunities to utilize non-Medi-Cal funding development and usage of discrete programs, and cause sources to support integrated care. significant budgeting challenges due to a multi-year process to reconcile expenditures in arrears. The current 5. Incorporate principles of risk and value-based pay- cost-based reimbursement system creates incentives to ment into the financing of behavioral health services increase service utilization and incur greater costs, rather in order to align incentives with desired outcomes. than to deliver high-value care that improves health outcomes. Resources from all available funding sources Rationale. The state and counties should facilitate the should be optimized for the benefit of consumers and transition to integrated care by immediately aligning the families, and financing should follow consumers to sup- budgeting and rate-setting process for behavioral health port the delivery of integrated care. Relevant statutes, services with that for physical health services. Moving to regulations, and other related policies should be aligned risk-based contracting for oversight and management of with these principles and should ensure accountability, behavioral health services will help to spur the formation resource optimization, and coordination of high-quality of accountable entities by harmonizing incentives across services. Implementation of such changes could ease the physical and behavioral health responsibilities. pathway to implementation. California should also develop payment methodolo- The transition to integrated care will require changes gies for behavioral health care that will promote clinical to these financing and policy structures. Restructuring integration at the delivery system level. By incentivizing may require action at the federal, state, and county lev- accountable entities to develop value-based payment els, with some actions easier to implement than others. (VBP) models, California can create financial incentives Critical changes will likely include modifications to (1) for high-quality and high-value care across the full con- the Section 1915(b) Medi-Cal Specialty Mental Health tinuum of services. VBP models that recognize the true Services waiver, (2) statutory law to allow for voluntary cost of behavioral and physical health care and are sensi- contracting and risk-based payment, and (3) regulations tive to consumer acuity will help ensure the long-term and policies connected to certified public expenditures. sustainability of a comprehensive, high-quality system of In addition to Medi-Cal funds, other funding sources care. These models can also reduce administrative bur- used for behavioral health services include but are not den and induce providers and organizations to deliver limited to county Mental Health Services Act funds, the the full continuum of services in the most appropriate 1991 Mental Health and the 2011 public safety realign- settings to support health, wellness, and recovery. ment funds, the federal Substance Abuse Prevention and Treatment Block Grant, and additional county funds Additionally, VBP models may help to spur investment in (overmatch). Accountable entities should, to the extent elements of critical infrastructure for the delivery of inte- possible, manage all these funding sources for Medi-Cal grated care. These elements could include information enrollees’ behavioral health services (in addition to fund- technology to foster data sharing between providers, ing for physical health services) in order to avoid creation such as integrated electronic health records; supports of new silos that might impede delivery of high-quality for community- based organizations; and services that integrated care. address the social determinants of health, which may offer significant benefits for people with complex health and social needs. Behavioral Health Integration in Medi-Cal: A Blueprint for California 15 the Cal MediConnect Program and other opportunities 6. Engage stakeholders to ensure that accountable at the federal level, the state should identify pathways to entities are responsive to individual and community promote aligned enrollment in accountable entities for needs, and that the new system of integrated care dual eligible beneficiaries with behavioral health needs. delivers on the promise of improved consumer and family outcomes. 8. Establish standard process and outcome measures Rationale: Stakeholder guidance should inform the plan- and accountable, transparent systems to monitor and ning and implementation of integrated care models. The evaluate the ongoing impact of integration across state, regions, and counties should begin to engage the state. stakeholders early and throughout the implementation of the integration. The timeline and phases for the transition Rationale. All stakeholders will have an interest in evalu- should be designed to be responsive to local needs, with ating the impact that a transition to accountable entities ongoing stakeholder engagement to address emerg- has on access, costs, and quality of care, and in ensuring ing challenges. Stakeholder engagement should be that no harm is done in the process and that individu- structured to create meaningful opportunities for stake- als and families receive the services and supports they holders, especially consumers and families, to provide need. In addition to managing the administration, financ- input that informs the development of accountability ing, and oversight of all physical and behavioral health mechanisms. Additionally, stakeholders should partici- services, the accountable entities should be responsible pate in the design and implementation of consumer and for improving the experience of care, ensuring timely family outreach and education strategies to minimize any access to a full continuum of services and recovery sup- disruptions during the transition. ports, enabling consumer and family choice in the care provided, and delivering better health outcomes at the individual and community level. State regulatory agencies 7. Foster integrated physical and behavioral health should provide monitoring and oversight of accountable care for dual eligible enrollees by promoting the entities. Reporting systems should be publicly available alignment of Medicare and Medi-Cal benefits in and built on existing oversight and quality measurement accountable entities. tools, and should incorporate data reflecting relevant Rationale. Dual eligible enrollees constitute almost one- outcomes from criminal justice, education, and other quarter of adult Medi-Cal enrollees receiving specialty sectors. The work group identified key principles for mental health services.34 Many additional Medicaid-only selecting outcome measures that: (1) accountable enti- enrollees with serious mental illness will become dual ties should be held uniformly responsible for achieving; eligible within two years by nature of their qualifying dis- and (2) should be used to evaluate statewide integration abilities. For dual eligible individuals, Medicare becomes efforts. These principles are outlined in Appendix B. the primary payer for physical health services and some limited behavioral health services, while Medicaid 9. Strengthen the behavioral health workforce to remains the primary payer for most specialty mental ensure access to high-quality care during and after health services and substance use services. Therefore, the transition to integrated care. policy initiatives that aim to integrate all physical and behavioral health services need to consider Medicare- Rationale. Delivering high-quality integrated care — covered benefits. including evidence-based screening, treatment, and recovery service delivery as well as best and promis- Current integrated care options for dual eligible ben- ing community practices — will require more providers eficiaries in California include Medicare-Medicaid Plans and staff to serve Medi-Cal enrollees in specialty men- created under the Cal MediConnect Program, Medicare tal health and addiction treatment settings, in primary Advantage Dual Eligible Special Needs Plans (D-SNPs), care, and in community-based services. Access to care and the Program of All-Inclusive Care for the Elderly. Each in California is limited by the overall shortage and geo- of these models exists in a select number of counties. As graphic maldistribution of behavioral health providers, California develops a statewide approach to Medicare- particularly linguistically and culturally diverse providers Medicaid integration that incorporates an evaluation of that reflect the population served. Primary care and other California Health Care Foundation 16 physical health practitioners may lack the training and experience to provide high-quality care without stigmati- Conclusion zation of serious behavioral health conditions, which may These ambitious recommendations aim to ensure that prevent individuals with SMI and SUD from seeking and California Medi-Cal enrollees and families receive the experiencing the benefits of integrated care. prevention, treatment, and recovery services needed to achieve their health and quality-of-life goals. As The transition to integration will require special attention informed by the approaches of other states in tackling to the behavioral health workforce. During the transition the challenges of poor health outcomes and high costs process, California should attempt to retain all existing for individuals with complex physical and behavioral providers, and should develop supports to improve pro- health needs, this paper describes an achievable state- viders’ administrative and clinical capacity to participate wide pathway toward integrated care delivery by 2025. in integrated care, including primary care providers. In Grounded in principles of recovery, equity, choice, and addition to licensed clinicians, the behavioral health work- transparency, these recommendations point to a system force includes other allied occupations and staff, such as that is far more capable of producing desired outcomes peer support specialists, parent partners, and therapeu- for Medi-Cal enrollees with behavioral health needs, and tic aides, who may be less familiar to traditional MCP for California as a whole. provider network development efforts. As many services delivered by such allied staff have been demonstrated to California policymakers and stakeholders have a unique be a best practice in helping individuals achieve recov- opportunity to address the systemic underperformance ery, integrated entities should be supported in and held of the current system and develop a system that is instead accountable for their efforts to retain these staff. Finally, designed to deliver on the promise of whole-person care. county-employed providers and staff may be affected by As both the Section 1915(b) and Section  1115 waivers this transition, and integrated care models will need to expire in 2020, and as the new gubernatorial administra- address key concerns related to the county workforce. tion develops an agenda for the next era of behavioral health care, California can now take bold action to The work of the California Future Health Workforce become a national leader in improving the health and Commission should inform long-term efforts to expand well-being of Medi-Cal enrollees with behavioral health access to care and ensure that consumers and families needs, their families, and communities across the state. receive needed services that foster wellness. Addressing current and projected workforce shortages in rural areas will be critically important to improve outcomes for indi- viduals with behavioral health needs. Behavioral Health Integration in Medi-Cal: A Blueprint for California 17 Appendix A. State Case Studies Arizona Case Study Pre-integration system structure. The Arizona Health $$ 2014.In Maricopa County (Phoenix), enrollees Care Cost Containment System (AHCCCS), the state with SMI transitioned to a single integrated RBHA Medicaid agency, was historically responsible for physical that was charged with managing both behavioral health services for most populations, and the Department and physical health services. of Health Services’ Division of Behavioral Health Services $$ 2015. The integrated RBHA model was extended (DBHS) was responsible for behavioral health services statewide to all enrollees with SMI, with a single under a contract with AHCCCS. DBHS oversaw Regional plan selected to manage care in each of three Behavioral Health Authorities (RBHAs) that managed regions. mental health and substance use services. AHCCCS enrollees with serious behavioral health needs thus $$ 2015. AHCCCS became responsible for oversee- enrolled in two health plans — one plan that managed ing physical and behavioral health services. This physical health care, and an RBHA plan that managed merger with DBHS was proposed in the fiscal year specialty behavioral health services. The system included (FY) 2016 budget of Governor Doug Ducey, and different payment methodologies with diverging incen- then endorsed by the legislature. Through this tives, as RBHAs used block purchasing to contract with merger, many staff with behavioral health exper- providers of behavioral health services, while physical tise joined AHCCCS and incorporated wellness health plans paid providers through fee-for-service. and recovery models into the oversight of inte- grated care delivery.36 Impetus for integration. The early mortality of indi- $$ 2016. Dual eligible enrollees and all Tribal viduals with serious mental illness (SMI) was a strong Regional Behavioral Health Authority and motivating factor for Arizona in advancing integration. A American Indian Health Program populations 2006 national report found that Arizona had the greatest transitioned to integrated care. average disparity in the life span of residents with SMI as compared to the general population — over 31 years.35 $$ 2018. The majority of adults and children enrolled Given that early mortality was largely driven by physical in Medicaid have transitioned to integrated care health conditions, Arizona leaders developed a plan that through the AHCCCS Complete Care (ACC) aimed to improve integration for enrollees with SMI to program, with a managed care plan coordinating improve these poor health outcomes. all physical and behavioral health services. ACC includes adults with mild to moderate mental Phases of integration. AHCCCS developed a phased health or substance use needs. Each of the three approach to integrate care by population and region, existing RBHAs has an affiliated ACC plan. RBHAs and integrated the state-level administration of physi- continue to provide integrated physical and cal and behavioral health services early in this process. behavioral health care for individuals with SMI, AHCCCS also invested in extensive ongoing stakeholder as well as behavioral health services for children outreach throughout the transition phases, including the in foster care and individuals with developmental creation of a dedicated office for this purpose, to engage disabilities. key stakeholders and ensure ample avenues for informa- $$ 2019. AHCCCS anticipates integrating care for tion sharing and feedback. individuals with developmental disabilities. $$ 2013. Children with a qualifying condition under $$ 2020. AHCCCS anticipates integrating care for all the Children’s Rehabilitative Services program children in foster care. transitioned to integrated care managed by one contracted plan for physical and behavioral health and long-term care. California Health Care Foundation 18 Currently, enrollees with SMI as well as the general adult State Outcomes and child populations receive all physical and behavioral Spending in value-based payment (VBP) arrangements. health care managed by one entity with one provider Integrated health plans and RBHAs have increased network, enabling more streamlined care coordination spending in VBP arrangements each year as a result of to improve health outcomes. Enrollees with SMI receive contractual requirements set forth by AHCCCS. A per- integrated care managed through an integrated RBHA, centage of VBP arrangements is specifically targeted to while the general adult and child population receives services for individuals with SMI and to providers of inte- care from an ACC integrated managed care organization grated care. (MCO), with multiple MCOs available in each region. Clinical integration. AHCCCS implemented a payment Components of State Approach model in which clinics delivering integrated physical and Waiver authority. Arizona’s Section 1115 waiver to behavioral health care may receive a 10% rate increase expand integrated care was most recently renewed in for evaluation and management codes based on the 2016 and amended in 2017. clinic meeting a defined threshold for integrated delivery of physical and behavioral health services. The state also Dual eligible beneficiaries. AHCCCS requires all launched the Targeted Investments Program to advance Medicaid plans to offer a companion Medicare Dual clinical integration, investing $300 million over five years Eligible Special Needs Plan (D-SNP) to promote aligned to support provider-level efforts to develop the systems enrollment in the same health plan for all services. required to deliver integrated care. Selected providers receive payments for completing core components and Management of non-Medicaid services and services milestones through year three, and then become eligible for non-Medicaid populations. RBHAs continue to to receive performance-based payment through year five provide crisis services to non-Medicaid populations based on quality measures for specific populations. and cover non-Medicaid behavioral health services for Medicaid enrollees. Participation in state health information exchange. The state has also reported significant increases in behavioral Delegation of responsibilities. AHCCCS prohibits inte- health provider participation in the state health infor- grated plans from delegating certain functions key to mation exchange, enabling greater coordination and integration. information sharing across different providers.37 Procurement process. Newly integrated RBHAs were Investments in supportive housing for enrollees with selected through a competitive bidding process led SMI. When the Maricopa County RBHA began manag- by DBHS, with the selected entities across the regions ing physical health services in 2014, it also launched a including two partnerships between existing RBHAs and supportive housing services. A study reported that con- Medicaid MCOs, and a partnership between Medicaid sumers in this program experienced a 20% reduction in MCOs and a county behavioral health provider network. psychiatric hospitalizations after enrollment, with a 24% decrease in total cost of care, with savings driven by reductions in behavioral health costs.38 Improved outcomes for dual eligible enrollees. Arizona reports increases in preventive care and reductions in hospitalizations due to better-coordinated care for dual eligible individuals.39 Behavioral Health Integration in Medi-Cal: A Blueprint for California 19 New York Case Study Pre-integration system structure. Most specialty behav- created within existing MCOs as products to function ioral health services for adults and children were provided as separate lines of business with distinct rate structures via fee-for-service, carved out from managed care plans and staff with enhanced behavioral health expertise. that covered physical health services as well as limited HARPs emphasize care management and must contract behavioral health services, depending on Medicaid eli- with health homes to provide care management and gibility type. Specialty behavioral health services were develop person-centered care plans. HARPs also cover licensed by the Office of Mental Health and the Office new benefits for home and community-based services, of Alcoholism and Substance Abuse Services, while the such as family support and training, peer support ser- Department of Health was responsible for physical health vices, and supported employment. These services are services delivered by MCOs. designed to help individuals meet recovery and wellness goals. Individuals eligible to enroll in a HARP may instead Impetus for integration. New York pursued behavioral decide to enroll in a mainstream MCO if they prefer. health integration as part of a statewide restructuring Multiple HARPs and existing MCOs in each region man- of the Medicaid program to achieve improvements in age integrated physical and behavioral health benefits. health outcomes, sustainable cost control, and a more efficient administrative structure.40 A multi-stakeholder New York plans to phase in children to enroll in inte- Behavioral Health Reform Work Group of the Medicaid grated MCOs and HARPs in 2019. Redesign Team guided design and implementation. In its recommendations, the work group noted that the Components of State Approach lack of coordination of behavioral and physical health at the clinical, regulatory, and financial levels contributes to Waiver authority. The state submitted an amendment to fragmentation with little accountability for improving the its Section 1115 waiver demonstration in 2015 to enable poor health and social outcomes experienced by enroll- MCOs to provide integrated physical and behavioral ees with behavioral health needs.41 A children’s behavioral health care, as a part of the Medicaid Redesign Team health subgroup found that the current system to serve reforms. Phasing in children will require transitioning six children and families was underfunded and provided dis- Section 1915(c) waivers to an integrated Section 1915(c) jointed, noncomprehensive services to families.42 waiver and then a Section 1115 waiver authority. Phases of integration. New York pursued a phased Dual-eligible beneficiaries. HARPs and traditional MCOs approach to enrolling Medicaid clients into integrated do not provide integrated Medicare benefits. plans, starting with a regional rollout for all adults eli- gible for Medicaid managed care. Beginning in 2015 in Management of non-Medicaid services and services New York City and 2016 statewide, MCOs began man- for non-Medicaid populations. Non-Medicaid-funded aging expanded behavioral health services for adults in services for Medicaid enrollees are not managed by addition to all physical health services. These expanded HARPs or MCOs, but are encouraged to be included and behavioral health services included services previously addressed in enrollee care plans as needed. Uninsured covered through fee-for-service, such as partial hospital- populations receive behavioral health services through ization and SUD inpatient and outpatient services, as well local or state-operated services. as new services that were not previously covered under Medicaid, such as licensed behavioral health practitioner Delegation of responsibilities. Subcontracting is and behavioral health crisis intervention services. Newly allowed and frequently employed, but all policies and covered services for children and families include fam- procedures between health plans and subcontracting ily peer support services, psychosocial rehabilitation, and behavioral health organizations (BHOs) are extensively youth peer advocacy and training. assessed. Relevant policies and procedures included staffing requirements, network adequacy, information Concurrently, individuals with SMI or SUD diagnoses sharing, and integrated performance indicators.43 became eligible to enroll in Health and Recovery Plans (HARPs), a new type of health plan. HARPs were newly California Health Care Foundation 20 Procurement process. New York modified the Medicaid Washington Case Study managed care model contract to include behavioral Pre-integration system structure. MCOs contracting health requirements, and did not procure new contracts. with the Washington State Health Care Authority (HCA) Existing MCOs absorbed all Medicaid behavioral health managed all physical health care as well as mild to moder- services for the general population, and could apply to ate behavioral health care. Until 2016, Regional Support become a HARP to serve individuals with more severe Networks (RSNs) managed specialty mental health ser- needs. vices for enrollees with SMI and were at risk for providing all necessary mental health care for Medicaid enrollees State Outcomes who met Access to Care standards. RSNs subcontracted with community mental health agencies to deliver care. Development of value-based payment (VBP) pilots and RSNs also managed federal grants and provided crisis quality measures. The VBP Pilot Program, which sup- and involuntary treatment services to safety-net popula- ports broader VBP activities in the Section 1115 waiver, tions under a separate, state-only contract. Meanwhile, was designed to support the transition to VBP and test SUD services were administered separately by county new outcome measures. Some of these pilot programs governments on a grant-funded and fee-for-service basis. will focus on provider groups serving HARP enrollees or involved in integrated care.44 Pilots will also test HARP Impetus for integration. With legislative support, quality measures, which were designed to encourage Governor Jay Inslee advanced an agenda of whole- care coordination and high-quality, patient-centered person care through integrating physical and behavioral care.45 health, citing the poor health outcomes, high cost of Development of an evaluation tool. New York has care, and risks to public safety caused by mental health developed an evaluation tool to measure the impact of and substance use disorders.47 In 2014, new legislation HARP enrollment.46 created financial incentives for local governments to opt into integrated care, mandated integrated delivery of care in both physical and behavioral health settings, reformed licensing regulations, and required access to recovery support services. Additionally, this legislation required a task force to create recommendations to achieve full integration by 2020. Phases of integration. First, the state created new regional service areas (RSAs) for physical and behavioral health care, and RSNs transitioned to become man- aged BHOs responsible for both mental health and SUD services. BHOs also manage non-Medicaid-covered community behavioral health services provided to both Medicaid and non-Medicaid enrollees, including crisis services. While requiring all regions to transition to integrated managed care by 2020, the state allowed RSAs to imple- ment in waves. One region opted to become an early adopter in 2016, a second followed in 2018, five regions will begin in 2019, and the remaining three regions are planning to integrate by the 2020 deadline. In this integrated managed care system, MCOs coor- dinate care across the full continuum of physical and behavioral health services, with between three and five MCOs contracted to provide care in each region. Behavioral Health Integration in Medi-Cal: A Blueprint for California 21 Components of State Approach State Outcomes Waiver authority. The Section 1915(b) behavioral health Improved outcomes in first region adopting fully inte- waiver first approved in 1993 has been renewed through grated managed care. An evaluation of 19 enrollee 2022 and amended to facilitate movement of regions outcome measures in the Southwest Washington region into the fully integrated model. Washington’s Section implementing fully integrated managed care found that 1115 waiver demonstration, the Medicaid Transformation ten enrollee outcomes showed statistically significant Project, was approved in 2017 and includes goals and improvement in calendar year (CY) 2016, and 11 enrollee an evaluation approach for integrated managed care. outcomes showed statistically significant improvement The Section 1115 waiver also includes an initiative for in CY  2017.49 Outcomes that showed improvement in Accountable Communities of Health to advance bidi- CY 2017 include: rectional integration of physical and behavioral health, $$ Adults’Access to Preventive/Ambulatory including support for providers to transition to fully inte- Health Services grated managed care. $$ Substance Use Disorder Treatment Penetration Dual-eligible beneficiaries. Dual eligible beneficiaries are not included in fully integrated managed care, and $$ Mental Health Treatment Penetration - instead receive Medicaid behavioral health benefits by Broad Definition enrolling in Behavioral Health Services Only coverage as $$ Percent Employed part of the MCO contracts. $$ Follow-up after Emergency Department (ED) Visit Management of non-Medicaid services and services for Alcohol or Other Drug (AOD) Dependence - for non-Medicaid populations. Washington has allowed Within 7 Days flexibility in how RSAs manage behavioral health ser- vices for non-Medicaid populations. For example, BHOs $$ Follow-up after ED Visit for AOD Dependence - have the right of first refusal to continue functioning as Within 30 Days Behavioral Health Administrative Service Organizations $$ Follow-up after ED Visit for Mental Illness - (BH-ASOs), receiving non-Medicaid funding and manag- Within 7 Days ing the crisis system and involuntary treatment, as well as other services for non-Medicaid populations. Under this $$ Follow-up after ED Visit for Mental Illness - scenario, integrated managed care plans are required to Within 30 Days contract with the BH-ASO for crisis services. Some non- $$ Inpatient Utilization per 1000 Coverage Months - Medicaid services that wrap around Medicaid services Combined Medical and Psychiatric are managed by MCOs, while most non-Medicaid ser- vices are managed by BH-ASOs. $$ Cervical Cancer Screening Delegation of responsibilities. While services and func- $$ Chlamydia Screening in Women tions may be delegated during the transition, HCA has stated it does not intend to allow subcontracting of key functions over the long term. HCA noted a willingness to discuss delegation agreements on certain elements of provided services.48 In King County (including the city of Seattle), all selected plans are contracting with the county to deliver behavioral health services during 2019, as a long-term plan is developed for implementation in 2020. Procurement process. Washington selected fully inte- grated managed care plans from a competitive bidding process open to the existing Medicaid managed care plans across the state. California Health Care Foundation 22 Appendix B. Key Principles for Measuring Enrollee Outcomes The primary goal for an integrated system of physical and These principles can help to develop a measure set that behavioral health care in Medi-Cal is to achieve improved rigorously assesses the impact of integration on enroll- physical, behavioral, and social outcomes for enrollees. ees, informs continuous quality improvement efforts, Accountable entities must be uniformly responsible for and enables the California Department of Health Care ensuring that the individuals they serve have access to Services (DHCS) to hold integrated entities accountable high-quality care across a full continuum of needs, and for ensuring that their members experience improved for delivering a defined set of outcomes. outcomes. As described in recommendation #8, the reporting systems should build on existing oversight The work group identified key principles for selecting the and quality measurement tools and must be transparent outcome measures used to assess accountable entities with publicly available data reporting for stakeholders to and evaluate statewide integration efforts. evaluate the impact of this transition to integrated care. $$ Totrack and evaluate the physical, behavioral, and social outcomes of adult and child enrollees, utilize standardized measures that address the following domains: (1) quality of life and other patient-defined outcomes to assess wellness, (2) functional changes and indicators of progress toward recovery and well- ness, and (3) integrated management of physical and behavioral health conditions. $$ To assess the quality and capacity of account- able entities to impact enrollees’ outcomes, utilize standardized measures that address the following domains: (1) screening and prevention; (2) referral tracking, care coordination, and medication manage- ment across physical and behavioral health services; (3) access to the full continuum of services and recov- ery supports; and (4) administrative data sharing, grievances, and dispute resolution. $$ Based on the established domains, deploy a mea- surement set that includes existing measures when available, in order to account for the complexity of delivering integrated care while not unduly adding to measurement burden. $$ When tracking health and social outcomes as well as health care costs and utilization, use a multi-year time frame to capture meaningful changes that emerge over a longer period of exposure to integrated entities. Behavioral Health Integration in Medi-Cal: A Blueprint for California 23 Endnotes 1. Liz Hamel et al., The Health Care Priorities and Experiences of 10. Behavioral Health in the Medicaid Program — People, Use, California Residents, Kaiser Family Foundation and California and Expenditures, Medicaid and CHIP Payment and Access Health Care Foundation, January 2019, www.chcf.org. Commission. 2.Behavioral Health in the Medicaid Program — People, 11.Steve Melek and Doug Norris, Chronic Conditions and Use, and Expenditures, Medicaid and CHIP Payment and Comorbid Psychological Disorders (Seattle, WA: Milliman, Access Commission, June 2015, www.macpac.gov (PDF); July 2008). and Benjamin Druss and Elizabeth Reisinger Walker, Mental 12. Understanding Medi-Cal’s High-Cost Populations, Disorders and Medical Comorbidity, Robert Wood Johnson California Department of Health Care Services, June 2015, Foundation, February 2011, www.rwjf.org (PDF). www.dhcs.ca.gov. 3.Benjamin G. Druss and Silke von Esenwein, “Improving 13. Integration of Behavioral and Physical Health Services General Medical Care for Persons with Mental and Addictive in Medicaid, Medicaid and CHIP Payment and Access Disorders: Systematic Review,” General Hospital Psychiatry 28, Commission, March 2016, www.macpac.gov (PDF). no. 2 (March-April 2006): 145–153. 14. Behavioral Health in the Medicaid Program — People, 4.Martha R. Burt et al., Homelessness: Programs and the People Use, and Expenditures, Medicaid and CHIP Payment and They Serve | Findings of the National Survey of Homeless Access Commission. Assistance Providers and Clients, Urban Institute, December 7, 1999, www.urban.org; Alison Luciano and Ellen Meara, 15.Integration of Behavioral and Physical Health Services “Employment Status of People with Mental Illness: National in Medicaid, Medicaid and CHIP Payment and Access Survey Data from 2009 and 2010,” Psychiatric Services 65, Commission; and Brenda Reiss-Brennan et al., “Association no. 10 (October 2014): 1201–1209; Joshua Breslau et al., of Integrated Team-Based Care with Health Care Quality, “Mental Disorders and Subsequent Educational Attainment Utilization, and Cost,” Journal of the American Medical in a US National Sample,” Journal of Psychiatric Research Association 316 no. 8 (August 23 – 30, 2016): 826–834. 42, no. 9 (July 2008): 708–716; Seth J. 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