Purchasing Managed Care Services for Alcohol and Other Drug Treatment
Technical Assistance Publication (TAP) Series 16

Introduction

State alcohol and other drug (AOD) authorities find themselves in the midst of revolutionary changes now occurring in the health care and AOD treatment fields. Regardless of the eventual outcome of national health care reform efforts, States are continuing to enact legislation that is rapidly transforming the service delivery landscape. More than 30 States are in the process of legislating some form of health care reform, and most of these reform efforts include the delivery of AOD treatment services with some form of managed care at their core.

Because many managed care organizations (MCOs) have little experience with AOD treatment among noncommercial populations, the State AOD directors must assume a primary role during this turbulent time. State directors must advocate aggressively for the needs of uninsured and publicly insured populations.

Directors can best achieve this role by maintaining their access to the expertise of today's publicly funded treatment providers. These treatment providers, after years of providing services to these challenging and disempowered populations, have developed a wealth of knowledge and experience about how to reach out to and treat these groups.

Managed care consists of a set of health care management tools that have the capacity both to increase the overall quality of a treatment system dramatically and to wreak havoc. Managed care initiatives must be well-conceptualized, carefully developed, closely monitored, and strongly enforced. A strong managed care contract must be developed to deal with a set of particular components. Such a contract must:

Public AOD treatment systems have been largely exempt from the impact of the managed care movement that has swept through the rest of the health care industry. This exemption is quickly evaporating. In this new environment, the AOD field must seize the opportunity to frame the debate. State AOD authorities and others involved in the field need to ensure that they play an active and knowledgeable role as new AOD treatment paradigms are being created.


Goal
The goal of this document is to help prepare State AOD directors and others (e.g., Medicaid authorities, MCOs, AOD treatment providers, AOD policy makers, and purchasers of managed care services) to:
  • Provide some model contract language for State agencies to use and build upon with MCOs
  • Actively participate in the development and management of managed AOD treatment systems in the context of State health care reform initiatives
  • Describe potential strengths and weaknesses of managed care system and identify strategies for using managed care to achieve specified goals
  • Provide guidance to contract effectively with, manage, monitor, evaluate, and/or develop standards for an MCO
  • Describe state-of-the-art managed care practices for AOD treatment
  • Increase conceptual and pragmatic understanding of how effectively to develop and manage a contract with an MCO that will best achieve system goals
  • Provide an overview of financing, contracting, and network management issues
Objectives
  • Identify data needed to monitor access, quality, cost, problems, and outcomes of a managed care system
  • Provide an overview of current managed care systems as they relate to public AOD treatment systems
  • Identify critical issues to focus upon when working with MCOs
  • Describe necessary and effective mechanisms for appeal, grievance, and consumer protections
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