Managed Mental Health Care in Frontier Rural Areas

by James Ciarlo, Director, Frontier Mental Health Services Resource Network
with contributions from Andrew Keller, Frank McGuirk, James Sorensen, and Walter LaMendola
Presented at the 11th Annual WICHE Decision Support Conference (August 26-68, 1996) and published in the November 1996 issue of WestLink

Frontier areas have presented difficulties to managed care because of their low population density and distance from centralized services. There are few caregivers present and little "fat" to trim for conversion to profits. Therefore, managed care may not have affected many frontier areas to date, especially in mental health/substance abuse (MH/SA) services.

Possible Benefits of a Managed Care System in Frontier Areas

• Could tie rural-based programs to urban ones in order to obtain more balanced, better-quality services through contracting with managed care organizations (MCO's).
• Could spread "risk" of service usage fluctuations across a larger population, which increases attractiveness of frontier to MCO's.
• Could integrate MH/SA services with a medical managed care system (new or pre-existing).

Things to Require, Watch for, or Consider in Request for Proposals Preparation and Subsequent Contract Negotiations

• Require reasonably decentralized services for frontier rural areas (no long-distance barriers); hence expect higher service costs for these areas.
• Beware of a capitation plan that includes rural residents but generates little service utilization by them!
• Require inclusion of a transportation network for rural residents and other enabling services when needed.
• Consider setting percentage limits on the MCO's profits or losses, but possibly a higher percentage in frontier areas.
• Require implementation of a performance measurement system, including computerized services data for assessing client outcome and satisfaction. This is essential for breaking out and looking at data for frontier rural areas.
• Encourage implementation of basic "Plain Old Telephone Service" telemental health services (emergency, on-call, back-up consultation).
• Consider the integration of most acute MH/SA with primary care, keeping severe/persistent mental illness services (e.g., Medicaid program) as statewide "Care-Out."
• Consider encouraging/facilitating rural area caregivers in creating their own MCO, especially one integrating primary care, obstetrics, geriatrics, pediatrics with MH/SA services.

States and regions need to use the extensive fiscal "clout" available as the state or regional contracting authority to produce better services in frontier areas than currently exist. When a state's managed care operations are in place, the state must monitor, monitor, monitor to ensure quality MH/SA services!

Write us with comments on our site James A. Ciarlo, Ph.D., Project Director This project is supported by the Center for Mental Health Services, Substance Abuse and Mental Health Services Administration Contract No. 280-94-0014