Policy Report: Civil Commitment Under
Medicaid Managed Care
Appendix
Case Study D
Minnesota Medicaid Managed Care Contract
and Civil Commitment
Overview
In 1983, the Minnesota Legislature approved
the Prepaid Medical Assistance Program
(PMAP), a three-county demonstration project
that used prepaid managed care plans to
deliver health services to certain Medicaid
enrollees, including families with children
and the elderly. The Federal Health Care and
Financing Administration approved the program
in 1985. In 1995, under a 1115 waiver,
the PMAP program was extended to 27
counties in the State. The current PMAP plan
differs from some of the other Medicaid
managed care plans in this study in that it
was not designed to cover adults with serious
and persistent mental illness (i.e., those individuals
who are on SSI), but rather the
AFDC/TANF population. Although some
adults in the covered population may have a
serious mental illness and a portion of the
children may be coping with emotional disturbances,
this plan was specifically designed
to cover acute rather than chronic conditions.
Even more significant, perhaps, is that
PMAP is the one contract in these four case
studies that does not cover the entire State
population, a fact that might account for
some of the unique developmental aspects of
the contract that are discussed below.
In addition to PMAP (which is currently
estimated to cover more than 162,000
enrollees in the 27 counties), three other
health plans in the State offer coverage to
such populations as the elderly and the
working, uninsured poor. The State is also
developing a five-county Demonstration
Project for People with Disabilities (featuring
a behavioral health carve-out for the SSI
population), scheduled to be implemented in
July 2000. All of the Minnesota health plans
are kept separate in terms of funding streams
and contracting.
The PMAP arrangement is of particular
interest to this study because although civil
commitment was not addressed in the original
contract language, it has been included
over time through the passage of relevant
legislation. PMAP thus offers a nice comparison
with the comprehensive Medicaid managed
care plans in Iowa and Colorado,
which included provisions for civil commitment
at the outset of their contracts. The
following case study describes how past
experiences are informing the development
of future Medicaid managed care contracts
in Minnesota.
Has the State addressed civil commitment in its
managed care contract?
Interviews revealed that the original PMAP
contract did not explicitly address the contractor’s
fiscal responsibility for an enrollee’s
treatment under a civil commitment order.
Interviewees reported that one result of this
oversight was a perceived rise in civil commitment
for mental health consumers. Some
interviewees speculated that this was the
result of contractors attempting to shift costs
to the State Mental Health Authority.
Consequently, legislation was passed and
provisions adopted that attempt to limit the
use of civil commitment within the context
of the PMAP program. In addition, the new
Demonstration Project for People with
Disabilities will include more specific provisions
around the health plan’s responsibility
for the costs of civil commitment. The relationship
between Medicaid managed care
and civil commitment in Minnesota can thus
best be understood as an evolutionary
process in which lessons learned in the past
are informing both the present and future
Medicaid managed care contracts.
Does the contract clearly specify whether and under
which circumstances the MCO is responsible to pay
for court-ordered (services)? What was the rationale
for including this provision?
Two pieces of legislation were passed in
1999 that clearly specify the circumstances
under which the health plans are responsible
for paying court-ordered services. This legislation
was a response to actions by both the
health plans and county agencies that were
perceived to be having adverse consequences
for consumers who had been court-ordered
to treatment. In the first instance, PMAP
contractors had been taking advantage of a
loophole in private insurance law that treated
civil commitment as a legal or administrative
action, rather than a medical one. That
allowed them to deny payment for court-ordered
services for enrollees. In 1999, legislation
was passed that prevented the health
plan from denying the medical necessity of
treatment simply because it was ordered by a
court. This provision does not require the
contractors to pay for all court-ordered services,
but prohibits them from refusing to pay
for treatment simply because it is ordered by
the court.
The second legislative action delineated
parties’ roles and responsibilities during the
civil commitment procedure. The process by
which an individual gets civilly committed to
treatment is uniform throughout the State of
Minnesota: Whenever a commitment petition
is filed, the county social service agency is
required to do a prepetition screening. This
screening aims to determine what the individual
needs and if there are alternatives to a
commitment order. Prior to 1999, the county
agencies conducted these screenings without
obtaining any input from the managed care
contractors. According to the State
Department of Health representative, this
arrangement proved disagreeable to both the
counties and to the health plans:
There were complaints from both
sides…counties were complaining that
health plans were not agreeing to pay
for court-ordered treatment and…were
shifting costs onto them. But on the
other side, the health plans were complaining
that they weren’t notified and
didn’t have an opportunity to have
input into the court plan.
As a result, a second piece of legislation
was passed in 1999 that required the counties
to seek health plan input as part of the
prepetition screening process. If the health
plan is not notified of the proposed treatment
or the court orders, then the county
must bear the cost of the ordered treatment.
The county may notify the health plan
retroactively, although this then gives the
health plan the option of not covering the
cost of the treatment. Upon notification, the
health plan must respond within 24 hours or
automatically bear the cost of the treatment.
If the health plan agrees with the assessment
and the person is ordered for treatment within
the health plan’s network (or to an agreed-upon
out-of-network provider), the health
plan is responsible for the cost of the treatment.
However, if the health plan determines
that the treatment is not medically necessary,
then the county is liable for the cost of the
services.
These new laws have reinforced the health
plan’s responsibility to its enrollees who are
placed on a civil commitment order, and
clarified the plan’s relationship with county
social service agencies during the commitment process. The overall aim has been to
ensure that Minnesota’s mental health consumers
receive the appropriate level of care
and that cost-shifting is avoided.
Does the contract clearly specify where court-ordered
hospitalization will take place and whether the MCO
is responsible to pay for IMD care? If so, how is it
addressed and what led to the adoption of the
provision(s)?
The contract does not specify where court-ordered
hospitalization will take place,
although most inpatient civil commitments in
the past were made to Minnesota’s State hospitals
(IMDs). Because Federal regulations
prohibit the use of Medicaid monies to pay
for a Medicaid recipient’s care in an IMD,
State hospital inpatient expenses were not
calculated into the capitation rate. Through
Minnesota’s 1115 waiver, a provision was
incorporated into the PMAP contract that
allowed health plans to use IMDs if they
desired, as long as they were willing to pay
for the cost of those services with non-Medicaid
resources. This provision was
designed to control State expenditures by
preventing cost-shifting by the contractor.
Does the contract address issues related to what
services will be deemed medically necessary and
how this determination will occur? Why were the
particular provisions adopted?
Interviewees reported that in the original
PMAP contract, the determination of “medically
necessary” care was a source of controversy.
The interviewee from the
Department of Health stated the following:
There are anecdotes where counties
would tell us that somebody was
enrolled in managed care and as soon
as the court commitment came up they
would get disenrolled from managed
care. And the health plan would determine that the placement was either not
medically necessary or that the proper
approvals were not obtained.
Because of the ambiguity and its adverse
impact on consumers, the State made two
changes to its current contract. The first of
these changes was to create a minimum
Statewide definition of “medical necessity”
that could not be overridden by a Medicaid
contractor’s more stringent parameters. A
State Department of Health representative
offered the following rationale for adopting
the Statewide standard:
In 1997, because of a lot of controversy
around the definition of medical necessity,
the mental health advocates, specifically
the Mental Health Association,
did get the legislature to adopt a
Statewide definition of “medical necessity.”…
medical necessity for mental
health, which is used by health plans in
Minnesota, cannot be more restrictive
than a definition that’s spelled out in
State law as of ’97.…Before that it was
pretty much wide open where they
could just…make their own definition….
This legislation notwithstanding, the State
still faced the problem (as noted previously)
of contractors claiming that a court-ordered
action, by definition, was not a medical decision.
Because of this loophole, the health
plan could disavow responsibility for the
cost of court-ordered treatment. The State
responded by passing legislation in 1999 that
said that providers could not deny the medical
necessity of care simply because it was
court-ordered. By creating these changes,
Minnesota thus was able to close loopholes
that were perceived to have encouraged the
use of civil commitment by contractors to
shift the cost of high-need clients to the State
and counties.
Does the contract require the types of community
support services necessary to maintain client
functioning? Are there other provisions intended to
ensure the availability of adequate community
supports?
None of the interviewees offered us any
details on contractual requirements for community
supports. It is thus assumed that no
specific supports are required to be offered
by the health plan, and that no provisions in
the contract assure the availability of adequate
community supports for mental health
consumers. That result may be a conse-quence
of the fact that the plan is primarily
targeted toward the TANF population and
acute care.
Does the capitation rate include the cost of court-ordered
services? Is there some form of incentive in
the contract that would encourage the use of civil
commitment?
As noted earlier, the initial capitation rate
in Minnesota did not include the cost of
IMD services (which comprised an estimated
90 to 95 percent of civil commitment), but
only of those services based in community
hospitals. One interviewee believed that the
loss of the monthly capitation payment
would be a financial disincentive for the
health plan to use court orders to IMDs as a
way to shift costs to the counties. Other
interviewees, however, felt that the health
plans had routinely used this contractual
loophole as a way to remove high-cost consumers
from the plan. Thus, while the IMD
payment issue was certainly not a direct
encouragement to use civil commitment, it
appeared to have left the door open for
health plans to disenroll high-cost consumers
via the civil commitment process. Through
the 1115 waiver that was obtained in 1995,
health plans were explicitly allowed to use
IMDs only if the plan covered the cost with
non-Medicaid resources. This contract provision
intended to eliminate the cost-shifting
incentive that had inadvertently been included
in the original PMAP plan.
How do stakeholders believe these contract
provisions (or lack thereof) have affected the use of
civil commitment within each system? If there has
been change, is it perceived as positive or negative?
Why? Do perceptions vary by stakeholder position?
The State of Minnesota has not tracked how
civil commitment has changed under the
Medicaid managed care program.
Information consists only of interviewees’
perspectives on what impact managed care
had on civil commitment. A State representative,
for example, commented that after the
shift to the PMAP plan, there were concerns
about a possible increase in the use of civil
commitment. He noted that several system
and policy changes occurred simultaneously,
thus making it hard to distinguish what factor
may have caused the perceived change:
At the same time that managed care
was implemented, the State Medicaid
program also shifted payment [from] a
fee-for-service inpatient care [on] a per-day
system to a per-admission payment
system…like Medicare does with the
diagnostic related groupings. So as of
about 1984–85 all Medicaid inpatient
payments started to be made on a flat
rate per admission. So that put a lot of
pressure on [reducing] longer stays.
And it’s the court-ordered treatment
that tends to be the longer inpatient
stay.... But as lengths of stays dropped,
it was more and more difficult for people
to get the inpatient treatment that
they needed in community hospitals.
The State institutions got to be more
and more difficult to get into and so
court commitment came to be used
more and more as a way to get into
State institutions. Soon after that, managed
care started to be implemented
and a lot of people felt that managed
care had a lot to do with increases in
court-ordered treatment, but we feel
that’s debatable. I mean it’s hard to isolate
the effect of one thing over the
other.
An interviewee from an advocacy organization
stated that the way in which the con-tract
was initially set up was perceived to
have created adverse consequences for consumers:
Prior to that (1999 legislation), the concern
was that health plans could use an
IMD setting as a cost-shift from their
financial responsibility to the State of
Minnesota.…Once the court ordered
treatment, the health plans would basically…
lose the financial responsibility
for that treatment because that treatment
was not considered medically necessary.…
We don’t have the data that
shows that this would happen…you
know, nobody admits to it, but everybody
suspects that that was probably a
motivator in at least some of the
cases….As a state, [we] kind of forgot
about the fact that a person has…deteriorated
to the point where their med-ical
condition suddenly [is] a social condition,
too, where the dangerousness
comes in to themselves or to other people.
I think the State almost enabled the
health plan to use the argument of
medical necessity [as a means of denying
payment]….
This perspective was corroborated by a
third interviewee, whose familiarity with the
prepetition screening process in Hennepin
County led him to surmise the following scenario
under Medicaid managed care:
Most commonly what we see…is that
that person will have been…in the
[private] hospital…three or four times
prior to the time that [the hospital]
ask[s] for [civil] commitment.…[Each
time], the person was discharged as
‘stabilized’ from the hospital…but in
reality [she or he is] really not much
better than the time they entered the
hospital. But after going through the
sequence of three or four hospitalizations,
[the hospital has] established a
record that this person needs longer
term hospitalization. [So] they come to
the court…asking for a petition for
commitment to the State hospital.
When they’re committed to the State
hospital, there is no longer any participation
by the…managed care program....
It’s all taken over by the State at
ninety percent of the cost and the county
for ten percent of the cost. So part of
the goal is to get rid of the person,
eliminate ’em from the managed care
system and put ’em in the State hospital
system where other people subsidize the
long-term care. We see this repeated in
Hennepin County over and over again.
Stakeholders’ perceptions would suggest
that there has been a steady increase in the
incidence of commitment orders since the
implementation of PMAP, although there are
differing opinions as to the probable cause of
this trend. Because of the lack of valid quantitative
data and the simultaneous implementation
of multiple policy changes, it is impossible
to determine with any accuracy how the
move to Medicaid managed care has affected
the use of civil commitment in this State.
Indeed, in the absence of hard data, additional
research would be unable to clarify
either the extent to which there have been
any changes, or the reasons for any such
trends.
Are there anticipated changes to future managed
care contracts to limit the use of civil commitment?
What experiences have prompted these potential
modifications?
As noted throughout this case study, the
original contract for PMAP in Minnesota
included no explicit references to the contractor’s
responsibility for an enrollee who
received a civil commitment order. As a consequence
of lessons learned over the past few
years, legislation has been passed and contractual
amendments made in an effort to
clarify the health plan’s responsibilities within
the context of court orders. These amendments
have been extended to the Demonstra-tion
Project for People with Disabilities (the
managed care behavioral health carve-out
for the severely and persistently mentally ill
population), which will have explicit con-tract
provisions around civil commitment
and the contractor’s responsibility. For example,
as noted earlier, the contract for the
Demonstration Project will define “medical
necessity” to automatically include court-ordered
treatment. Said one of the contribu-tors
to the Demonstration contract process,
“By that statement we get out of all this
argument about whether a particular court-ordered
treatment is medically necessary.”
In addition, the capitation rate will include
supplemental funding to allow health plans
to cover up to 45 days of inpatient treatment
in an IMD, such as a State psychiatric facility.
This provision should effectively eliminate
the incentive for a health plan to use civil
commitment as a way to remove high-need
consumers from the managed care plan’s
rolls.
Table of Contents | Previous
|
