1. Idaho BHTWG Panel March 24, 2010 Steve Holsenbeck, MD ValueOptions Colorado Partnerships

3. Why you should listen to me? 25 years managing healthcare systems, mostly community based; Public sector managed care experience: ▫11 years as head of regional Colorado managed care operations; ▫15 years as medical director for Colorado; ▫7 years as National CMO Public Sector for VO; ▫8 state or regional public sector managed care program implementations.

4. Colorado Model Colorado implemented a capitated mental healthcare carve-out in 1995.  Initially 8 regions; now consolidated to 5  Single Behavioral Health Organization per region  Membership assigned on county of residence  All Medicaid eligibility and age categories included  Driven by list of Covered Diagnoses (no SA or DD or OBS)  All services and levels of care (except residential x child welfare & youth corrections)  RFP with competitive bidding (rebids every 5 yrs)

5. Colorado Model Full risk capitation: contractor at risk for ALL covered services to all Medicaid Members within region; Regions based on historical CMHC catchment areas; CMHCs eventually involved in BHO governance or ownership in all regions.

6. VO CO Partnerships Profile 6 Customer: Colorado Department of Healthcare Policy and Financing BHO Partnerships: Colorado Health Partnerships, LLC – VO with 8 CMHCs Foothills Behavioral Health Partners, LLC – VO with 2 CMHCs Northeast Behavioral Health Partnership, LLC – VO with 3 CMHCs Each BHO holds contract with CDHCPF for its region. BHOs delegate managed care functions to ValueOptions. BHOs contract with CMHCs as principal, but not sole, providers of non- hospital services. February 2010 combined membership: 307,000 Penetration rates: 13-18%

7. Managed Care Services Provided by ValueOptions ▫Financial Management ▫Member and Family Affairs ▫Quality Management ▫Information Technology ▫Data Management and Analysis ▫Claims ▫Network Operations ▫Provider Relations ▫24/7 Call Center Operations ▫Utilization Management ▫Service System Integration ▫Medical Management 7

8. Immediate benefits Major systemic transformation occurred over first two years of managed care, 1995-1997.

9. Expanded Access Strategy: Rapidly expand access to effective community-based services in order to reduce reliance on expensive institutional care. ▫Average Wait to first appointment from >30 days to <7 days. ▫Crisis access in all counties within first 6 months. ▫Penetration rate from 9% to 13 %, most increase in children’s services.

10. Colorado Health Networks: Successes National Outcomes Roundtable1996 Rochester Institute of Technology/USA Today Quality Cup1997 National Committee for Quality Assurance Full Accreditation1999 URAC Full Accreditation1999 Eli Lilly Reintegration Award2002 American Psychiatric Association Silver Achievement Award2003

11. Colorado Health Networks: Successes URAC Full Accreditation1999 Eli Lilly Reintegration Award2002 American Psychiatric Association Silver Achievement Award2003

12. Savings Direct: Capitation rates set at 95% of Medicaid Fee for Service. Indirect: – Improved access to community based services resulted in natural closure of >120 state hospital beds. – Strengthened safety net resulting in expanded capacity for indigent care, thereby stretching state General Fund dollars to cover more non- Medicaid. – Reduced over-utilization of emergency rooms. – Reduced utilization of residential beds for children and adolescents. – Reduced inpatient utilization. Shifted savings to community safety net providers. – Prior to 1995: 2/3 of Medicaid Mental Health costs were for institutional care. – By 1997: <10% of Medicaid Mental Health costs were for institutional care.

13. What worked? Carveout Full risk capitation for ALL covered services Regionalization Population-based Responsibility and Accountability Defragmentation of system of care Partnerships between comprehensive (but under-funded) Community Providers and Well-resourced Professional Managed Care Organizations State transformation “czar”, committed to the vision, with authority to make compromises on behalf of Agencies Bias for Action at every level Fueling the recovery movement with inclusiveness and $$ Incorporating opposing viewpoints in policy making Crisis intervention and hospital diversion services

14. What worked? Measuring Successes (occurred mainly at BHO level) Data mining PDCA Driving provider behavior with Data and Dollars Data: ▫Move toward standardization of EMRs at major provider level ▫Standard service definitions and uniform encounter coding ▫Comparison of providers to standards, to benchmarks, and to each other

15. What doesn’t work (well)? Diagnosis-based carve-out vs Provider/Service based carve- out Exclusions for Child Welfare, DD, SA, OBS. Resulted in: – Haves vs Have nots – Conflict over primary diagnoses – Fudging diagnoses – Under-development of workforce to treat excluded diagnoses Micromanagement of contractors by committees Process-based contracting Unilateral mandates Squabbling between oversight agencies Holding community providers financially harmless for hospitalization Crisis assessment (versus crisis intervention) services