The Early Effects of Medicaid Reform and Care Integration among People with Serious Mental Illness

Background: People with severe mental illness (SMI) are of particular concern for Medicaid programs due to their high prevalence and associated cost of care. Medicaid patients with SMI also often have co-occurring medical conditions. The prevalence of these chronic conditions is higher among people with SMI than people without SMI and the impact of medical conditions on people with SMI is greater, contributing to a 13-30 year shorter lifespan among people with SMI.

To improve health care quality and slow healthcare spending, state Medicaid programs have promoted the integration of physical and behavioral health care−efforts that could be of particular benefit to people with SMI. Most patients with SMI visit behavioral health specialists at community mental health centers regularly, but they are less likely to receive primary care that focuses on their physical health needs. Without adequate primary care, however, patients with SMI often end up receiving more expensive care in emergency departments or hospitals. Therefore, care integration, particularly as a form of integrating primary care to behavioral health clinics, has a potential to improve care for patients with SMI.

Objective: In July 2012, Oregon launched a new approach to Medicaid coverage, dubbed Coordinated Care Organizations, or CCOs. CCOs are a type of Accountable Care Organization but place unusual emphasis on the integration of physical and behavioral health care. The goal of this study was to assess the impact of first two years of the CCO transformation on health service use and quality of care among Medicaid beneficiaries with SMI.

Method: We used a mixed-methods approach. Using 2011-2014 Medicaid and commercial insurance claims in Oregon, we conducted a difference-in-differences analysis and assessed changes in care among Medicaid patients with SMI under CCO implementation, compared to changes among commercially insured patients with SMI. To provide context on steps taken by CCOs to integrate care, we also conducted semi-structured interviews with 33 CCO key stakeholders.

Results: Our results indicate that CCO implementation had only minimal effects. CCOs were associated with no changes in emergency department visits (any visits and number of visits). Both quarterly inpatient admission rates and number of admissions increased, but the sizes of the increases were minimal. CCO implementation was also associated with no changes in quality measures, with exceptions of a small increase in high-density lipoprotein cholesterol screening rates for people on second generation antipsychotic drug therapy.

Our qualitative findings indicate that in the early years of CCO implementation, care integration occurred mostly in primary care practices. However, integrating care in primary care settings tends to benefit patients with less severe mental health issues, as most patients with SMI seek care from community mental health centers. While integrating primary care in community mental health centers could have been more beneficial to patients with SMI, such integration was rare in Oregon’s CCO by 2014, due to financial, infrastructure, and staffing recruitment difficulties.

Conclusion: Despite strong support by the state, CCO implementation had minimal early impact on care for Medicaid SMI patients.