Managed Care Comes To Social Services – Some Advice From The Field (Open Minds)

By Paul Neitman, LMSW

Yesterday, my colleagues Monica E. Oss and Howard Shiffman looked at the continued expansion of managed care – this time to include children in the child welfare systems (see Ohio & Illinois The Latest To Link Child Welfare System & Managed Care). Those of us whose careers have been spent on the social service (rather than health care) side of the health and human service field have been relatively unaffected by managed care – and it hasn’t been a significant strategic issue to deal with until now.

The “threat” of managed care in child welfare goes back at least to the 1980’s. Many of us were involved in the Child Welfare League of America’s “Managed Care Task Force,” which dates back to the early to mid-1990’s. While some later efforts did come to fruition in the 1990’s, principally in Kansas, much of the rest of the country remained waiting to see if managed care would ever surface in children’s services. The wait is now over. First for medical services and now with the integration of behavioral health, more and more states are relying on managed care models to fund and deliver services to children in the child welfare system (see What Is The Size Of The Child Welfare Market?: An OPEN MINDS Market Intelligence Report and How Many Foster Care Children Are Enrolled In Medicaid Managed Care?: An OPEN MINDS Market Intelligence Report).

This is in addition to a number of other states who are privatizing child welfare services typically using one or more “lead agencies” who act as care management organizations using managed care type funding and service delivery strategies. We’ve reported on the many related state initiatives:

  1. California Foster Care System Moving To Needs-Based Rates
  2. Florida Child Welfare Lead Agency, ChildNet, Picks Cayuga Center To Launch ChildNet’s First Treatment Family Foster Care Program
  3. Kansas DCF Counsel Says Privatized Foster Care Lead Agencies’ Bundled Payments May Be A Conflict Of Interest
  4. Kansas To Audit Adequacy & Cost Effectiveness Of Its Privatized Foster Care System
  5. Nebraska Receives Two Bids For Child Welfare Lead Agency Contract
  6. Nebraska To Develop Statewide Behavioral Health System Of Care For Children & Youth
  7. New Jersey DCF Expanding Children’s Collaborative Mental Heath Hubs Statewide
  8. Texas Foster Care Redesign Estimated To Generate ROI Of $3 To $1
  9. Texas CASA Launches Pilot Collaborative Family Engagement Program

In addition to managed care and privatization, there are a growing number of pay-for-success initiatives, funded with social impact bonds or other financing mechanisms, cropping up in the children’s services arena. Here is some of our coverage of these initiatives:

  1. Salt Lake County, Utah, Launches Two Pay-For-Success Projects Focused On Jail Recidivism & Homelessness
  2. Santa Clara County, California, Selects Telecare For Mental Health Pay-For-Success Project
  3. $2.4 Million Grant Awarded To Third Sector To Build Government ‘Pay For Success’ Programs
  4. An Inside Look At Pay-For-Success Initiatives: The Institute For Child Success Case Study

While it is natural to look at change as a negative, I think this is an opportunity for both children and for the provider organizations that serve them. I’ve been fortunate to work with two New York State social service organizations who have been repositioning themselves to maintain sustainability and the commitment to their traditional vulnerable populations, including children in the child welfare system (see Managed Care Technical Assistance Center Medicaid Managed Care (MMC) Readiness Assessment Tool).

Having been through this transition a few times now, I can safely say that getting social service organizations ready for managed care is not rocket science. You need a strategy for identifying your place in the emerging system and a set of enhanced operating competencies. My short list of competencies includes:

  1. Understanding managed care organizations (MCO) needs and priorities in regards to developing a provider network
  2. Knowledge of MCO contracting methods and requirements
  3. Knowledge of MCO communication and reporting requirements
  4. Technology capacity required to meet MCO reporting and service delivery requirements
  5. Knowledge of Levels of Care (LOC) and utilization management practices – and their impact on service delivery and financial reimbursement
  6. Ability to coordinate services with other service providers, from acute care to primary care to specialty care and social support
  7. Revenue cycle management capabilities, from initial eligibility and authorization, to billing and collections
  8. Ability to price and manage non-fee-for-service or value-based reimbursement arrangements
  9. A marketing function, both to health plans and to health plan consumers

For more on developing these competencies, check out these resources in the OPEN MINDS Industry Library:

  1. How Prepared Are Health & Human Service Provider Organizations For Value-Based Reimbursement?
  2. Is Your Organization Ready To Be ‘The’ Care Coordinator?
  3. Assessing Your Organization’s Readiness For Telehealth
  4. Is Your Organization Ready For Social Impact Bonds?
  5. New Research Identifies Six Core Competencies For ACO Readiness
  6. New Integrated Certified Community Behavioral Health Clinics Certification Criteria Feasibility & Readiness Tool (I-CCFRT)
  7. Building The Infrastructure & The Team To Manage Medical Homes & Health Homes: The OPEN MINDS Readiness Assessment
  8. Managed Care Technical Assistance Center Medicaid Managed Care (MMC) Readiness Assessment Tool

There is certainly debate about whether managed care is good for consumers – and more specifically, whether managed care serves the needs of consumers with complex support needs. We’ve covered these issues in great detail in the past – see The Child Welfare Privatization ConundrumManaged Care In The Foster Care System – Past The Tipping Point?, and Are Social Impact Bonds Financing The Future Of Social Services?.

But, like it or not, more market-driven models are coming to social services. For more on strategy in an era of managed care, join us on June 6 for the session, “Finding New Opportunities With Health Plans: How To Market To Managed Care,” featuring Steve Ramsland, Ed.D., Senior Associate, OPEN MINDS; Matthew O. Hurford, M.D., Chief Medical Officer, Community Care Behavioral Health Organization; and Alyssa L. Rose, Director, Network Strategy, Beacon Health Options, in New Orleans for The OPEN MINDS Strategy & Innovation Institute.