Legal and Quality of Care Issues for Providers in Managed Behavioral Health Care Arrangements

Abstract

Over the last two decades, Americans have witnessed a dramatic increase in enrollment in privately insured managed care plans. For example, in 1970, there were 33 health maintenance organizations (HMOs) covering 3 million persons, whereas by 1980, there were 236 HMOs serving 9.1 million persons (DeLeon, VandenBos, & Bulatao, 1991). Between 1980 and 1992, the number of privately insured managed care enrollees grew to more than 90 million (Rosenbaum, Serrano, Wehr, & Spernak, 1995). In the mid-to-late 1980s, many HMOs began contracting with specialized companies to provide managed behavioral health care services, and by 1994, 106.6 million were enrolled in over 300 plans that offered some type of program for managed behavioral health care* (Iglehart, 1996). Including Medicare, this 106.6 million represents 48.7% of the insured population (Sipkoff, 1995).

These mental health management firms such as HAI, Merit Behavioral Care, Value Behavioral Health, and Green Spring Health Services, typically enter into “carve-out” arrangements, either directly with self-insured employers or as subcontractors to HMOs or other insurers. Under such arrangements, the mental health management firm assumes financial and/or administrative responsibility for the mental health services required by persons covered by a particular benefit plan.