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DPW Plans for Behavioral Health Managed Care Expansion
April 5, 2005

Recently, the Department of Public Welfare (DPW) Office of Mental Health and Substance Abuse Services (OMHSAS) circulated a draft concept paper on implementing the statewide expansion of behavioral health services through managed care. The draft provides a brief history of Medical Assistance managed care, describes the guiding principles for statewide implementation of managed care, and offers two options for expansion. DPW plans to request expansion of the current HealthChoices waiver authority statewide for behavioral health services from the Centers for Medicare and Medicaid Services.

Under the first option, counties would be permitted to move forward with the proposal that they developed for HealthChoices behavioral health expansion before it was halted. They could use the same contractor or select a new behavioral health managed care organization (BH-MCO) under applicable county procurement procedures. Counties would be permitted to retain carry-over funds in the year prior to implementation to assist with start-up costs. Affected counties could move forward under this option in the same implementation time frame. Current HealthChoices program standards and requirements would apply. Counties would be encouraged to have one multi-county contract with DPW to implement this option. The contract would include a risk corridor; that is, shared risk between DPW and the counties for the first two years of the program. Those counties that chose not to move forward with the existing proposal would implement the second option.

Option two is primarily for rural counties that do not have a sufficient population to permit operation of a full-risk managed care entity within regional county groupings. For this option DPW would contract with one BH-MCO to manage the entire behavioral health program across the counties in the remainder of Pennsylvania not already covered by HealthChoices or by Option 1. The selected BH-MCO would be at full risk and must meet the current program standards and requirements for HealthChoices, as is done currently for Greene County. The risk corridor concept would also apply to this option. The BH-MCO must agree to serve all counties in this option (currently 18 counties) and any new counties that might be added in the future. If affiliations under the first option would change resulting in coverage of less than 40,000 lives, then those counties would be included in this second option, unless the counties could create another affiliation that would cover 40,000 or more lives.

Statewide expansion of behavioral health managed care would be implemented within two years of DPW’s decision to move forward. Two requests-for-proposal would be issued simultaneously for the options. OMHSAS would send a letter to each county or existing county grouping to ascertain whether counties chose to exercise the right of first opportunity and move forward with the existing behavioral health managed care organization or with a new entity. For those counties that would participate in the second option, OMHSAS will identify county representatives to participate in vendor evaluation. Public meetings will be held to gather input on the plan and input from the OMHSAS Advisory Committee will be incorporated into the final plan.

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