In some cases, however, the political environment requires limitations on profit. Here, public payers must devise a measurement approach that recognizes the costs associated with providing those services required in the contract that are not necessarily clinical in nature. In programs that impose restrictions on the medical loss ratio, the definition of administrative activities becomes very important. Participants contend that many costs treated by public payers as administrative are actually costs associated with direct provider services. Although State mental health authorities often employ case management staff and consider them to be service providers, some public agencies treat the MBHO s case managers as administrative staff.
Agencies are often unwilling to recognize case management as a legitimate service cost.
Participants identified several areas of activity required by public payers that involve supplemental efforts or retrofitting existing functions to meet those requirements. The resources needed to accommodate these requirements must be recognized as legitimate service costs in any profit meas-urement approach. Access and triage. Quality improvement requirements. Clinical appeals processes.