Examining the Effects of Managed Care on Alcohol and Other Drug Treatment

  • Different types of managed care organizations as well as contracting arrangements will affect accessing alcohol and other drug (AOD) treatment
  • AOD treatment seeking, entry and completion are three successive but distinct stages of success
  • Introducing managed care to the Massachusetts Medicaid population reduced AOD treatment costs without arbitrarily cutting services or restricting access for disadvantaged groups
  • The American Society of Addiction Medicine’s Patient Placement Criteria appears to successfully match alcoholism patients to their appropriate level of care

The term "managed care" continues to evoke strong opinions from patients, health-care providers, employers and insurers. Many managed care organizations (MCOs) tend to provide some degree of mental health and alcohol and other drug (AOD) treatment as part of behavioral health services. Rigorous research on AOD treatment under managed care, however, is lacking. A manuscript in the March issue of Alcoholism: Clinical & Experimental Research gathers four different study perspectives on managed-care influences on AOD treatment. The four studies were presented during a symposium at the June 2001 Research Society on Alcoholism meeting in Montreal, Quebec.

"Managed care companies seem to be more accepting of mental health treatment than of AOD treatment," noted Stephen Magura, Deputy Executive Director of National Development and Research Institutes (NDRI) and lead author of the manuscript. "This is largely because of the continuing development of effective medications for mental disorders that can be prescribed through the regular medical care system. AOD treatment, however, is not at this time primarily based on medications, with the rare exception such as methadone treatment for opiate addiction. AOD treatment has a greater burden of proof because it is more difficult to demonstrate the effectiveness of the more multifaceted behavioral therapies upon which the field continues to depend."

"For many clients," added Alexandre Laudet, a principal investigator at NDRI, "substance-abuse disorders are chronic, relapsing conditions that cannot be ‘resolved’ by a short-term treatment episode. In order to address this, service providers and researchers are increasingly seeking to identify effective – and cost-effective – modalities for substance-abuse problems. As a result, it can be said that the advent of managed care has contributed greatly to emphasizing evidence-based clinical practices."

Indemnity insurance coverage was the prevalent form of health care in the United States 25 years ago. Today more than half of all Americans with health insurance are enrolled in some kind of managed care plan. The predominant forms of MCOs are health maintenance organizations (HMOs), point-of-service (POS) plans, and preferred provider organizations (PPOs). HMOs are the oldest form of MCOs; members are offered a range of health benefits for a set monthly fee, and primary-care doctors act as care coordinators. Some HMOs offer a POS plan, which is an indemnity-type option that allows members to refer themselves outside of the plan for a negotiated fee. A PPO is a form of MCO that is closest in nature to indemnity coverage; members have more flexibility for self-referral but also tend to have more copayments for doctors and/or prescriptions.

One of the studies (Horgan, et al.) in the Magura manuscript found that, outside of inpatient and residential care, PPOs were less likely than HMOs and POS plans to require prior authorization for AOD treatment.

"This finding implies that requirements for prior authorization can set up a barrier to receiving timely treatment in situations where a fast response is desirable," said Magura. "In addition, when patients and providers do not exactly follow the sometimes involved prior-authorization procedures, reimbursement may be denied. In my opinion, if MCOs establish clear and specific guidelines for covered services, prior authorization for the great majority of AOD patients and treatments should not be necessary."

A second study presented during the symposium (Mertens, et al.) found that analysis of AOD treatment access and utilization needs to distinguish among treatment seeking, entry and completion as there are both similarities and differences among the three steps.

"Distinguishing among these three successive ‘stages’ is important because many treatment seekers do not return to the agency after intake and admission," said Laudet, "and many clients who begin to attend treatment drop out before completing the planned duration of services. As stated by the authors in their study, one in four clients did not return for services; that is, they sought services but never entered treatment. In addition, retention/completion rates vary across treatment modalities, ranging from as low as 35 percent to more than 60 percent. Yet research evidence from AOD treatment populations across modalities indicates that longer retention in treatment is associated with significantly more positive outcomes as measured by subsequent substance use as well as measures of social functioning such as psychological functioning, employment and involvement in criminal activities. Therefore, when assessing penetration and effectiveness, it is important to distinguish among these three concepts."

"It may be necessary for ‘the system’ to reach out more to people with AOD problems," said Magura, "and for employers especially to ‘legitimate’ and encourage treatment seeking, partly by making it clear treatment seekers won't lose their jobs. Treatment programs should also be held accountable not only for the number of patients they admit, but also for the number that stay long enough to get some real therapeutic benefit."

A third study (Shepard, et al.) provided an analysis of the introduction of managed care among the Massachusetts Medicaid population. Researchers found a reduction in payments for AOD treatment without an arbitrary cutting of services or restricting of access for disadvantaged groups.

"The finding is surprising, prior to further examination, in that it goes against the popular belief, or should I say fear, about the effects of managed care on service delivery," said Laudet. "However, closer examination of the data suggests that the findings are in fact quite logical. The authors speak about three kinds of services: 24-hour or emergency services, ambulatory or outpatient substance-abuse services, and methadone maintenance. The most significant decrease in expenditures was observed for the most intensive, and therefore costly, area of 24-hour services." In contrast, expenditures for ambulatory services decreased significantly less, and expenditures for methadone treatment doubled. "As the authors noted," continued Laudet, "expenditures for 24-hr services were reduced without compromising access by moving detoxification from expensive hospital-based settings to lower-cost, non-hospital based settings. That is, they added an intermediate level of services - more intensive than ambulatory care but less so than hospital-based emergency care."

The fourth study presented during the symposium (Magura, et al.) was an examination of the American Society of Addiction Medicine’s (ASAM) Patient Placement Criteria, which found that it held promise for matching alcoholism patients to their appropriate level of care, thereby avoiding less-effective ‘undertreatment’ as well as cost-inefficient ‘overtreatment.’

"Using the ASAM Criteria can help AOD programs give patients the right intensity of treatment," said Magura, "instead of not giving enough or giving more than the patients really need. If patients don't get enough treatment, then their addiction will continue and any money spent on treatment may be wasted. In the same way, if patients get more treatment than they really need, money is also wasted. We hope to continue research on the latest edition of the ASAM Criteria by studying their usefulness for treatment matching in several different types of treatment programs."

Funding for this Addiction Science Made Easy project is provided by the Addiction Technology Transfer Center National Office, under the cooperative agreement from the Center for Substance Abuse Treatment of SAMHSA.

Articles were written based on the following published research:

Magura, S., Horgan, C.M., Mertens, J.R., & Shepard, D.S. (2002, March). Effects of managed care on alcohol and other drug (AOD) treatment. Alcoholism: Clinical and Experimental Research, 26(3), 416-422.