Impacts of an Integrated Medicaid Managed Care Program for Adults with Behavioral Health Conditions: The Experience of Illinois

Background/Purpose:  State Medicaid programs are increasingly expanding the use of comprehensive risk-based managed care to serve high-need population. Adults with behavioral health conditions—encompassing both mental health and substance use disorders— account for half of Medicaid beneficiaries with disabilities and are one of the most medically needy and costly populations.

This study adds to the limited body of literature on integrated MMC programs by assessing the effects of Illinois Integrated Care Program (ICP) on health services utilization and cost for adults with behavioral health conditions. ICP is a fully-capitated, risk-adjusted managed care program in Illinois serving Medicaid beneficiaries with disabilities who are not eligible for Medicare.

Methods: This study leverages a natural experiment as ICP was implemented across Illinois regions sequentially. Data and samples:Data sources for this study included Medicaid FFS claims, encounter records submitted by managed care providers, and state capitation payment data between 2010 through 2013 (before and after ICP). These records came from 100 percent of the ICP eligible beneficiaries residing in the 6 suburban counties (i.e., the intervention group) and 100 percent of ICP eligible beneficiaries residing in the city of Chicago (i.e., the comparison group). The Chicago comparison group would have enrolled in ICP except that they lived outside of the pilot regions. The final sample consists of 28,127 persons, including 9,329 who initially lived in the suburban counties and 18,798 individuals who initially lived in Chicago.

Measures. Diagnosis of a behavioral health condition was identified based on the ICD-9-CM codes. We examined all-cause utilization of primary care, emergency department, acute inpatient, and dental services, as well as utilization of behavioral health specific-outpatient, emergency department, and acute inpatient services. Identification of service category was based on a combination of Healthcare Common Procedure Coding System codes, place of service, provider type, and principal diagnosis. Expenditures are total fee-for-service and capitated payments made by the state Medicaid agency to all services.

Analysis. We assessed the impact of managed care on patterns of service use and health care expenditures in difference-in-differences models in conjunction with propensity score methods. Propensity scores were estimated via a logistic regression model using socio-demographic characteristics, Medicaid waiver status, behavioral health diagnosis categories, Elixhauser comorbidity, and baseline health services utilization as predictors. After achieving balance on these characteristics, managed care effect was estimated in a panel data DD multiple regression model adjusting for the inverse probability of treatment weights.

Results.  Compared with the Chicago comparison group, the intervention group had a net increase of 2.5% in primary utilization rates (p<.001), 4.1% in the utilization of behavioral health-specific outpatient services (p<.001), and 1% in dental care utilization (p<.001), and a net decrease of 1.4% decrease in all-cause inpatient utilization (p=.017). The intervention group incurred $316 less per member per month, however this difference was not statistically significant (p=.209). No significant differences were found in other utilization outcomes.

Conclusions and Implications: Fully-capitated, integrated managed care programs have the potential to save Medicaid dollars without largescale negative effects on utilization relative to the typical FFS program.