Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
MANDATORY MANAGED CARE 
Childrens Access to 
Medicaid Mental Health Services 
JUNE GIBBS BROWN 
Inspector General 
JANUARY 2000 
OEI-04-97-00344  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended by Public Law 100-504, is to protect the integrity of the Department of Health and Human 
Services programs as well as the health and welfare of beneficiaries served by them. This statutory 
mission is carried out through a nationwide program of audits, investigations, inspections, sanctions, and 
fraud alerts. The Inspector General informs the Secretary of program and management problems and 
recommends legislative, regulatory, and operational approaches to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of Inspector 
General. It conducts short-term management and program evaluations (called inspections) that focus 
on issues of concern to the Department, the Congress, and the public.  The inspection reports provide 
findings and recommendations on the efficiency, vulnerability, and effectiveness of departmental 
programs. 
OEI's Atlanta Regional Office prepared this report under the direction of Jesse J. Flowers, Regional 
Inspector General, and Christopher H. Koehler, Deputy Regional Inspector General.  Principal OEI 
staff included: 
REGION  HEADQUARTERS 
Dwayne Grant, Lead Analyst  Alan Levine, Program Specialist

Betty Apt  Barbara Tedesco

Josiah Townsel  Brain Ritchie

Janet Miller  Joan Richardson

To obtain copies of this report, please call the Atlanta Regional Office at 404-562-7723.  Reports are

also available on the World Wide Web at our home page address:

http://www.dhhs.gov/progorg/oei  T A B L E  O F  C O N T E N T S  
PAGE

EXECUTIVE SUMMARY ......................................................1

INTRODUCTION .............................................................4

FINDINGS

Access to Care is Limited  .................................................8

Responsibility for Care is Fragmented ....................................... 10

States Attempt to Improve Coordination and Access  ...........................11

RECOMMENDATIONS  ...................................................... 12

AGENCY COMMENTS  ...................................................... 13

APPENDICES

A: Summary of First Year Contracts ........................................14

B: Agency Comments  ...................................................15

HCFA ..........................................................16

SAMHSA .......................................................18

ENDNOTES ................................................................ 22
 E X E C U T I V E  S U M M A  R Y  
PURPOSE 
To describe access to Medicaid mental health services under mandatory managed care for 
children with serious emotional disturbances. 
BACKGROUND 
States are increasingly converting their Medicaid programs from traditional fee for service 
models to managed care models.  Nearly every State has implemented, or is planning to 
implement, mandatory managed care for Medicaid beneficiaries who require mental health 
services. These mandatory managed care contracts typically include services for both adults and 
children. 
We did not specifically focus our inspection on provision of mental health care to children. 
However, while completing our inspection on Mandatory Managed Care - Changes in Medicaid 
Mental Health Services (OEI-04-97-00340), we observed specific problems with childrens 
access to care. This report describes our specific observations related to access to mental 
health services by children with serious emotional disturbances. 
We used a case study approach for reviewing mandatory mental health managed care programs 
in seven States. We integrated, compared, and summarized documentary and testimonial 
evidence obtained from State Medicaid managed care offices and mental health departments. 
We also interviewed managed care organization officials, mental health providers, and 
stakeholders for childrens mental health. We did not validate the testimonial evidence, 
however, the views of program operators and stakeholders were generally similar and consistent 
with documentary evidence. Therefore, we believe their opinions provide useful insight into early 
managed care programs and the accessibility of services for children with serious emotional 
disturbances. 
FINDINGS 
Respondents said that providing mental health services to children with serious emotional disturbances 
can present unique challenges not typically found when delivering services to adults.  These challenges 
are generally systemic in nature and have existed for years under traditional fee for service care. 
Although conversion to managed care does offer State Medicaid programs opportunities to improve 
mental health services for children, respondents told us that conversion can also intensify existing 
problems.  When implementing mandatory managed care systems, States should be aware of obstacles 
that can interfere with access to mental health services for children. 
Mandatory Managed Care - Childrens Access to Care  1  OEI-04-97-00344  Access To Care Is Limited 
<  Reductions of in-patient care for children was greater than that for adults. 
<  Childrens out-patient services lag behind those for adults. 
<  First year managed care contracts included limited provisions for children. 
Responsibility for Care Is Fragmented 
<  Respondents were concerned about possible cost shifting. 
<  Multiple State agencies have responsibility. 
States Attempt to Improve Coordination and Access 
<	 States have negotiated interagency agreements and reported improved coordination, but 
access to care by children is still limited. 
RECOMMENDATIONS 
Childrens mental health out-patient services have increased after implementation of mandatory managed 
care.  However, childrens access to mental health services is still limited, and the provision of care is 
fragmented.  While attempts by some States to reduce fragmentation seem promising, most respondents 
agree more needs to be done. Accordingly, we recommend that HCFA encourage States to: 
Specify services for childrens mental health care in managed care 
contracts. 
Childrens services appeared to be an afterthought in States first year managed care contracts. 
Providing more detailed specifications on services managed care organizations will provide will 
help ensure that children receive the specialized care they require. 
Develop interagency agreements to promote coordination of childrens 
mental health services. 
Better coordination of care and improved services for children were reported in States where 
agencies have established such agreements. Establishing closer working relationships also 
reduced cost shifting concerns among agencies. 
Mandatory Managed Care - Childrens Access to Care  2  OEI-04-97-00344  AGENCY COMMENTS 
Both HCFA and SAMHSA commented on our draft report. 
HCFA concurred with our recommendation to encourage States to specify services for childrens mental 
health care in managed care contracts.  They prepared draft Interim Review Criteria for Children with 
Special Needs.  States that mandatorily enroll children in capitated plans will be required to respond to 
the criteria as part of the waiver process. 
Additionally, HCFA concurred with our recommendation to encourage States to develop interagency 
agreements to promote coordination of childrens mental health services. HCFA plans to highlight the 
importance of such coordination in their imminent Report to Congress on special needs of vulnerable 
populations enrolled in Medicaid managed care. 
SAMHSA commented that a number of our recommendations were useful, but expressed concern 
about drawing conclusions from what they believe is a study method that is not scientific.  We wish to 
emphasize that we used a case study method for our inspection. In describing our methodology we 
included a detailed explanation of the advantages and limitations of our case study approach. The 
limitations we point out are similar to those described by SAMHSA. 
SAMHSA noted that the overall lack of consistent, detailed data was a possible major finding from our 
study. We agree.  However, the problem is not limited to only childrens programs.  It is an issue we 
deal with explicitly in a companion report that addresses both children and adult mental health care. 
That report is titled Mandatory Managed Care: Changes in Medicaid Mental Health Services (OEI-
04-97-00340). 
Additionally, SAMHSA expressed concern that we may not have adequately included the views of 
State mental health staff and stakeholders. As shown in our methodology, we considered input from 
such groups as highly important.  To illustrate, we interviewed at least 37 State mental health staff and 
stakeholders. 
We made several technical changes suggested by SAMHSA. 
The full text of HCFA and SAMHSA comments are in Appendix B. 
Mandatory Managed Care - Childrens Access to Care  3  OEI-04-97-00344  I N T R O D U C T I O N  
PURPOSE 
To describe access to Medicaid mental health services under mandatory managed care for 
children with serious emotional disturbances. 
BACKGROUND 
States are increasingly converting their Medicaid programs from traditional fee for service 
models to managed care models.  As of June 1998, over 16.5 million Medicaid beneficiaries 
were participating in some type of managed care program. This represents over 53 percent of 
the Medicaid population.1 
Nearly every State has implemented, or is planning to implement, mandatory managed care for 
Medicaid beneficiaries who require mental health services.  As of July 1998, 36 States have 
implemented mandatory mental health managed care programs.2  These mandatory managed 
care contracts typically including services for both adults and children. 
We did not specifically focus our inspection on provision of mental health care to children. 
However, while completing our inspection on Mandatory Managed Care - Changes in Medicaid 
Mental Health Services (OEI-04-97-00340) we observed specific problems with childrens 
access to care. This report describes our specific observations related to access to mental 
health services by children with serious emotional disturbances. 
Medicaid Eligible Children 
Children can qualify for Medicaid in several ways. Children are generally eligible for Medicaid 
benefits if they are under age 21 and their families income is low.  Additionally, most States 
extend eligibility to children who have qualified for the Supplemental Security Income Childrens 
Program.  States also generally include children that qualify under special home and community-
based waivers. 
Serious Emotional Disturbances 
Children, up to age 18, who currently or any time in the past year have had a diagnosable 
mental, behavioral, or emotional disorder that results in functional impairment which substantially 
interferes with or limits the childs role or functioning in family, school, or community activities is 
defined as seriously emotionally disturbed.3 
Mandatory Managed Care - Childrens Access to Care  4  OEI-04-97-00344  An estimated 1 in 10 children are reported to have a serious emotional disturbance at any given 
time.4  In fact, the estimated prevalence rate of serious emotional disturbances for children is 
higher than the prevalence rate of serious mental illnesses for adults  about 9 percent for 
children verses about 6 percent for adults.5 
Some of the more commonly recognized disabling types of mental illnesses that effect both adults 
and children includes schizophrenia, bipolar disorder, major depression, obsessive-compulsive 
disorder, and panic disorder. Children with serious emotional disturbances may also be 
commonly diagnosed with attention deficit disorder, autism, pervasive development disorder, or 
Tourette's syndrome. 
METHODOLOGY 
State Selection 
We reviewed mental health managed care programs for seven States. They were Arizona, 
Massachusetts, North Carolina, Utah, Washington, Iowa, and Colorado.  We selected all States 
(five) that had been under a mandatory managed care program for persons with serious mental 
illnesses for at least three years as of April 1997.6  We selected the remaining two States, Iowa 
and Colorado, at the request of HCFA.  Although Iowa and Colorado had only been under 
managed care for about 2 years at the time of our inspection,7 HCFA staff said they were 
generally recognized as having innovative programs. 
All of the States surveyed, except North Carolina, included both adults and children in their 
mandatory managed care mental health contracts. North Carolina only contracted for the mental 
health care for children.8  For comparison purposes, we provided a general description of each 
selected State program in Appendix A. 
Document Review 
At each selected State, we reviewed key Medicaid and mental health program documentation 
showing program implementation, status, and access to care for children with serious emotional 
disturbances. To illustrate, we analyzed the first year managed care contract for each selected 
State. We also analyzed requests for proposals, managed care waiver requests, State progress 
reports, internal and external studies and reviews on program operations, beneficiary satisfaction 
survey results, complaint and grievance reports, in-patient and out-patient care data and reports, 
mental health program costs, and records on beneficiary utilization. 
We also conducted an Internet search to review managed care research involving children with 
serious emotional disturbances. Finally, we reviewed professional journals, studies and 
publications on State Medicaid programs and mental illnesses. 
Mandatory Managed Care - Childrens Access to Care  5  OEI-04-97-00344  Interviews 
We interviewed 23 Medicaid managed care and mental health staff members in our survey 
States. From those officials, we obtained an understanding of how individual States 
implemented and operated Medicaid mandatory mental health programs.  Finally, we obtained 
the views of State Medicaid and mental health staff on program changes for children with serious 
emotional disturbances. 
Also, we interviewed 16 managed care officials and mental health care providers, as well as 21 
mental health stakeholders 9 in our survey States. We obtained the views of both groups on 
program operations and childrens mental health services.  We were particularly interested in 
their views on the accessibility to services for children after States converted  to a mandatory 
managed care system.  We selected managed care officials, mental health providers, and 
stakeholders based on recommendations from State Medicaid staff. 
Advantages and General Limitations 
We used a case study approach to analyze the access to services of children with serious

emotional disturbances under mandatory managed care.  The advantage of this approach was

that it allowed us to get the benefit of first-hand experiences from State officials, managed care 

representatives, mental health providers, and stakeholders.  Our methods have general

limitations in that the States or sites selected may not be typical, and we did not verify all 

testimonial information they provided to us. The information is also limited, because it reflects

operations that occurred over a 2 to 3-year period starting with each States first year contract. 

We are aware that State Medicaid managed care systems have continued to evolve with each

new contract and waiver, and that program structure in our surveyed States may be quite

different today from their initial managed care contracts.

The differences in program data reported by States, and the general lack of available childrens

data limits our ability to generalize across State programs. Each State Medicaid program

collects and reports data differently. To illustrate, one State distinguished between services

provided to children with serious emotional disturbances and children with less serious problems,

while another State did not.  Another State did not distinguish between care provided to adults

and children when providing utilization data.

We integrated, compared, and summarized documentary and testimonial evidence obtained from

State Medicaid managed care offices and mental health departments.  We also interviewed

managed care officials, mental health providers, and stakeholders for childrens mental health. 

We did not validate the testimonial evidence, however, the views of program operators and

stakeholders were generally similar and consistent with documentary evidence. Therefore, we

believe their opinions provide useful insight into early managed care programs and access for

children with serious emotional disturbances.

Mandatory Managed Care - Childrens Access to Care  6  OEI-04-97-00344  Companion Reports 
This report is our third on mandatory managed care and Medicaid mental health services. 
The first report is titled Mandatory Managed Care - Changes in Medicaid Mental Health 
Services (OEI-04-97-00340) It provides an early look at the changes that mandatory managed 
care had on State Medicaid mental health services for persons with serious mental illnesses. The 
report highlights program changes that affected both adults and children. 
The second report is titled Mandatory Managed Care - Early Lessons Learned by Medicaid 
Mental Health Programs (OEI-04-97-00343). It highlights common program characteristics 
and implementation practices as guidance to other States that plan to convert to mandatory 
managed care. 
_____  ____  ____  _____ 
We did our field work between May 1997 and July 1997.  While conditions regarding mental 
health services in managed care settings may have changed since then, our report reflects 
conditions and patterns of care in the first few years of converting fee for service programs to 
managed care. Wherever possible we have updated our background information. We 
conducted the inspection in accordance with Quality Standards for Inspections issued by the 
Presidents Council on Integrity and Efficiency. 
Mandatory Managed Care - Childrens Access to Care  7  OEI-04-97-00344  F I N D I N G S  
Respondents said that providing mental health services to children with serious emotional disturbances 
can present unique challenges not typically found when delivering services to adults.  These challenges 
are generally systemic in nature and have existed for years under traditional fee for service care. 
Although conversion to managed care does offer State Medicaid programs opportunities to improve 
mental health services for children, respondents told us that conversion can also intensify existing 
problems.  States should be aware of the obstacles that can interfere with access to mental health 
services for children when implementing mandatory managed care systems. 
Access To Care Is Limited 
Reductions of In-patient Care for Children was Greater Than That for Adults 
Utilization of in-patient services have generally decreased under managed care for all 
populations.  However, the reduction of in-patient services for children has been the most 
dramatic. For example, one State reported that children utilizing in-patient care was down 
almost 40 percent, as compared to a decrease of 2 percent by adults for the same period. 
Another State reported a 30 percent decrease in psychiatric hospital admissions for children, as 
compared to a decrease of about 6 percent by adults during the same period. 
Because detailed data was almost non-existent, we could not determine the actual extent to 
which access to needed in-patient services had been decreased.  Generally, the only available 
data was satisfaction surveys and grievance files, but they generally did not reveal the large 
decrease of in-patient care as a problem.  However, the results of the data may not be reliable 
indicators on accessibility of in-patient care. 
Stakeholders in five of the seven surveyed States believed that managed care organizations were 
making it more difficult for children to be admitted into psychiatric hospitals. They said while in-
patient care was often difficult under fee for service, the new managed care organizations 
implemented even more narrow criteria for hospital admission. Due to the more restrictive 
admission criteria, stakeholders said that children must go too far into a crisis situation before 
hospitalization is authorized.  Stakeholders complained that approval and denial of hospitalization 
is often based only on what the clinicians observe during their evaluation.  They said the clinicians 
do not consider what the parents and others observed in the hours or days proceeding their 
evaluation. 
Further, stakeholders in all States were concerned that children were being removed from 
psychiatric hospitals too quickly. They generally believe however, that out-patient care provides 
a better treatment environment for children and that in-patient care was relied upon too heavily 
under the fee for service system. 
Mandatory Managed Care - Childrens Access to Care  8  OEI-04-97-00344  Controlling access to expensive in-patient services and substituting less expensive out-patient 
services is a standard managed care practice.  It reduces managed care costs.  It is also 
generally regarded by Medicaid staff as being a more effective and appropriate treatment than 
in-patient care.  This is particularly true for children because family involvement can play an 
important role in treatment plans. 
Childrens Out-patient Services Lag Behind Those for Adults 
State Medicaid representatives and stakeholders told us that under fee for service, childrens 
access to mental health out-patient services was below that for adults. Under mandatory 
managed care, State representatives noted that the gap between adults and childrens care still 
exists despite the addition of several new alternative out-patient childrens services such as: 
respite care, family support services, in-home treatment, and school based programs. 
All State Medicaid representatives reported that out-patient programs have expanded under 
mandatory managed care.  However, the number of children that access services are still 
generally below the level of access for adults. For example, one State reported that the 
percentage of adult enrollees accessing out-patient services was over twice that for children 
(123.7 per 1000 vs 54.8 per 1000). Another State reported that about 6 percent of eligible 
adults accessed out-patient services, while only about 3 percent for eligible children accessed 
out-patient services. 
Part of the problem stemmed from the lack of available services. To illustrate, prior to managed 
care, some State Community Mental Health Centers did not even offer children mental health 
services. Further, when implementing mandatory managed care States generally implemented 
program improvements in the adult system before expanding them to the childrens system. 
Finally, under mandatory managed care, States generally did not emphasize childrens programs 
in their first year managed care contracts. 
First Year Managed Care Contracts Included Limited Provisions for Children 
In the six States that provided mandatory managed mental health care to both adults and 
children, State first year contract request for proposals included few provisions that specifically 
addressed childrens care issues. Typically, care for children was addressed by adding the 
contract language and children to care areas generally designed for adults, and by included a 
short paragraph stating that managed care organizations will provide services to children. 
Mandatory Managed Care - Childrens Access to Care  9  OEI-04-97-00344  Responsibility for Care Is Fragmented 
Respondents Concerned About Potential Cost Shifting 
Medicaid representatives in five of the seven surveyed States expressed a concern that placing 
mental health services under a capitated (flat fee) payment arrangement would increase the 
incentive for managed care organizations to shift care to other State agencies, such as the 
juvenile justice, child welfare, or education system, in order to reduce costs.  They said that 
when multiple State agencies provide overlapping services to the same population, and such 
agencies have their own independent budgets, cost shifting is a strong possibility.  Several State 
representatives told us that it was not uncommon for one agency to accuse another of dumping 
children on their agency, especially those children requiring long-term care. 
We did not specifically determine an adverse impact on children resulting from cost shifting. 
However, several State representatives said it could happen.  To illustrate, State child welfare 
agencies often provide mental health treatment under Medicaid fee for service to children they 
have placed in residential treatment centers. In that State, the State Medicaid representatives 
expressed concern that managed care organizations would attempt to refer children to the 
residential treatment centers to reduce their in-patient psychiatric care costs.  Medicaid staff in 
another State were so concerned about the likelihood of cost shifting that they convened a 
monthly committee to review the issue. 
The data in one State tended to collaborate the concerns about cost shifting. The data showed 
that the number of placements in residential treatment centers increased about 5 percent over 
what was expected under fee for service prior to conversion to managed care.  However, the 
data was inadequate to determine the causes of the increase. 
Multiple State Agencies have Responsibility 
A variety of State and Federal childrens programs have evolved over the years.  In our survey 
States a minimum of five agencies were responsible for providing various levels of mental health 
services to children. These programs include the health system, education system, social 
services, substance abuse, and juvenile justice system. Children with serious emotional 
disturbances have complex needs, and could require services from one or all of the State 
programs. However, no one program or system has the responsibility and expertise to 
coordinate or meet all the needs of the mentally ill, particularly when that person is a child. 
Responsibilities for the different childrens programs fall under different State agencies, all with 
different budgets and priorities.  They tend to work independently which has caused a 
fragmented system of care for children.  For example, State representatives told us that while 
State mental health agencies have program staff and resources to furnish mental health services 
Mandatory Managed Care - Childrens Access to Care  10  OEI-04-97-00344  to children, they generally must wait for referrals from other agencies. State mental health 
agencies do not have daily contact with children that other agencies such as school and juvenile 
justice systems do. However, while the schools and juvenile justice systems have daily access to 
children, they do not typically have staff and resources to address their mental health needs. 
Also,  if a State mental health agency observed social and developmental issues while providing 
mental health services to a child  they typically had to refer the child back to the school system, 
or social services agency. 
Without coordination of care among multiple State agencies, stakeholders said that children 
often become proverbial footballs, being passed back and forth between systems. They said 
that this passing back and forth between agencies typically results in children not receiving 
needed mental health care.  Further, often just determining which agency is responsible for 
providing care is difficult, at best, because of the multiple physical and social needs of child with 
serious emotional disturbances. 
States Attempt to Improve Coordination and Access 
States have undertaken a variety of strategies to increase agency cooperation.  Some of the 
State strategies are highlighted below. 
One State passed legislation requiring agencies to work together. This initiative has 
resulted in State law that requires the health, education, and court system to work 
together to provide better services to children. 
Two States are testing programs that establish one case manager and one agency to 
represent all childrens service systems.  The pilot programs are designed to minimize 
costs, increase access to available and needed services, and reduce duplication of 
multiple case coordination. 
Other States have established voluntary agreements between childrens agencies, and 
committees to assist with program integration. 
In all cases where an interagency agreement or committee was established, stakeholders and 
State officials reported better coordination of care and improved services. However, State 
Medicaid staff said that coordination and access problems still exist, despite the interagency 
agreements. 
Mandatory Managed Care - Childrens Access to Care  11  OEI-04-97-00344  R E C O M M E N D  A T I O N  
Childrens mental health out-patient services have increased after implementation of mandatory managed 
care.  However, childrens access to mental health services is still limited, and the provision of care is 
fragmented.  While attempts by some States to reduce fragmentation seem promising, most respondents 
agree more needs to be done. Accordingly, we recommend that HCFA encourage States to: 
Specify services for childrens mental health care in managed care

contracts.  Childrens services appeared to be an afterthought in States first year managed

care contracts. Providing more detailed specifications on services managed care organizations

will provide will help ensure that children receive the specialized care they require.

Develop interagency agreements to promote coordination of childrens

mental health services.  Better coordination of care and improved services for children

were reported in States where agencies have established such agreements.  Establishing closer

working relationships also reduced cost shifting concerns among agencies.

Mandatory Managed Care - Childrens Access to Care  12  OEI-04-97-00344  A G E N C Y  C O M M E N T S  
Both HCFA and SAMHSA commented on our draft report. 
HCFA concurred with our recommendation to encourage States to specify services for childrens mental 
health care in managed care contracts.  They prepared draft Interim Review Criteria for Children with 
Special Needs.  States that mandatorily enroll children in capitated plans will be required to respond to 
the criteria as part of the waiver process. 
Additionally, HCFA concurred with our recommendation to encourage States to develop interagency 
agreements to promote coordination of childrens mental health services. HCFA plans to highlight the 
importance of such coordination in their imminent Report to Congress on special needs of vulnerable 
populations enrolled in Medicaid managed care. 
SAMHSA commented that a number of our recommendations were useful, but expressed concern 
about drawing conclusions from what they believe is a study method that is not scientific.  We wish to 
emphasize that we used a case study method for our inspection. In describing our methodology we 
included a detailed explanation of the advantages and limitations of our case study approach. The 
limitations, we point out, are similar to those described by SAMHSA. Our goal was to take advantage 
of the early experience of some States to guide implementation of other States who are using a managed 
care approach for mental health services. We are confident that our readers will interpret our findings in 
the context of the methodology which we described. SAMHSAs thoughtful comments will also help 
our readers avoid the pitfalls of over generalization. 
SAMHSA noted that the overall lack of consistent, detailed data was a possible major finding from our 
study. We agree.  However, the problem is not limited to only childrens programs.  It is an issue we 
deal with explicitly in a companion report that addresses both children and adult mental health care. 
That report is titled Mandatory Managed Care: Changes in Medicaid Mental Health Services (OEI-
04-97-00340). 
Additionally, SAMHSA expressed concern that we may not have adequately included the views of 
State mental health staff and stakeholders. As shown in our methodology, we considered input from 
such groups as highly important.  To illustrate, we interviewed at least 37 State mental health staff and 
stakeholders. 
We made several technical changes suggested by SAMHSA.  For example, we clarified  Appendix A to 
show services that were excluded from risk by managed care organizations during their first year 
contracts. 
We present full text of HCFA and SAMHSA comments in Appendix B. 
Mandatory Managed Care - Childrens Access to Care  13  OEI-04-97-00344  APPENDIX A 
Summary: First Year Medicaid Managed Care Mental Health Contracts

Start  Waiver  Initial  Services 
State  Date  Type  Type of MCO  Coverage  Area  Excluded for 
Covered  MCO Risk 
AZ  Jan  1115  Non-profit, public sector,  Adults  Statewide 
1992  CMHCs*  and 
Children 
CO  Aug  1915(b)  Most areas non-profit, public  Adults  6 test  State hospital 
1995  sector CMHCs.  and  areas.  & drugs 
Two rural areas - partnership  Children  Excluded 
between public sector  largest 
CMHCs and private, for- metro area 
profit companies 
IA  Mar  1915(b)  one private for-profit  Adults  Statewide  State hospital 
1995  company for whole State  and  & drugs 
Children 
MA  Jan  1915(b)  one private for-profit  Adults  Statewide  State hospital 
1992  company for whole State  and  & drugs 
Children 
NC  Jan  1915(b)  Non-profit, public sector  Children  11  Outpatient 
1994  CMHCs  Only  counties,  care 
approx 
25% of 
state 
UT  Jul  1915(b)  non-profit, public sector  Adults  8 of 11  State 
1991  CMHCs  and  areas.  Hospitals 
Children  80% of 
Medicaid 
population 
WA  Jul  1915(b)  Non-profit public sector  Adults  6 of 14  In-patient 
1993  system  and  areas.  care 
Children  66% of 
Medicaid 
population 
* Community Mental Health Centers

14
 APPENDIX B 
Agency Comments 
Health Care Financing Administration (HCFA)

Substance Abuse and Mental Health Services Administration (SAMHSA)

15
 16
 17
 18
 19
 20
 21
 ENDNOTES 
1. National Summary of Medicaid Managed Care Programs and Enrollment, Medicaid Managed care 
Enrollment Report, Health Care Financing Administration, June 30, 1998 
2. State Profiles on Public Sector Managed Behavioral Health Care and Other Reforms.  Managed 
Care Tracking System, Substance Abuse and Mental Health Services Administration, July 31, 1998 
3. Federal Register, Volume 58, Number 96, May 20, 1993 page 29425 
4. Prevalence of Serious Emotional Disturbance in Children and Adolescents.  Mental Health, United 
States, 1996. Center for Mental Health Services, Substance Abuse and Mental Health Services 
Administration, 1996 
5. ibid 
6. Oregon and Tennessee have been under managed care for a minimum of three years, but did not 
phase in their seriously mentally ill populations until January 1995 and July 1996 respectively. 
7. Iowa implemented March 1995. Colorado implemented July 1995. 
8.  In February 1999, North Carolina requested to withdraw its 1915(b) waiver extension of the 
Carolina Alternatives Program. The State proposes to move all recipients back to a fee for service 
system on or before June 30, 1999. 
9. For the purpose of this report, stakeholders include family members of children with serious 
emotional disturbances, and State and national mental health organizations representing children with 
serious emotional disturbances.  The organizations include such groups as the National Alliance for the 
Mentally Ill, The America Psychiatric Association, and The Federation of Families for Childrens 
Mental Health. 
22