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Oregon's transition to a managed care model for medicaid-funded substance abuse treatment: steamrolling the glass menagerie.

In 1993 Oregon became one of the first states to apply for and receive a Health Care Financing Administration (HCFA; now called Centers for Medicare and Medicaid Services) 1115 Medicaid waiver from the U. S. Department of Health and Human Services. Policymakers in Oregon, after the passage of a series of legislative bills (Rutledge, 1997), restructured the state's publicly funded health care services and implemented the landmark Oregon Health Plan (OHP) in February 1994, which included outpatient substance abuse treatment as a benefit.

Before OHP, only a minority of clients seeking publicly funded substance abuse treatment services were eligible for Medicaid. Treatment services delivered to Medicaid clients were paid for by the state using a fee-for-service model. Substance abuse treatment for low-income people not eligible for Medicaid, who accounted for the majority of clients obtaining publicly funded substance abuse treatment, was provided through a "slot" model funded through Oregon's general fund. These outpatient treatment slots were akin to "beds," in that a single person filled each slot. This service delivery model had pervaded the publicly funded outpatient substance abuse treatment system for more than 50 years, influencing the philosophy and the delivery of publicly funded treatment.

The 1115 Medicaid waiver expanded the eligibility criteria for Medicaid, which almost doubled the Medicaid population in the state (Deck, McFarland, Titus, Laws, & Gabriel, 2000). The result of this was that the majority of clients seeking or in publicly funded substance abuse treatment were transferred from the state slot model with a capped capacity to the Medicaid fee-for-service model. The Medicaid model placed no limit on the number of clients providers could serve and reimbursed them for each service provided regardless of the number of clients treated at any one time. The transfer of the majority of state-funded clients to the Medicaid fee-for-service model allowed providers to increase the number of clients they served without adding new treatment agencies or counselors--at least to the extent that treatment providers were willing and able to increase their client load at the individual agency level.

The Oregon Department of Human Services (DHS) allocated most of the general funds it had used to pay for outpatient treatment slots as matching dollars for the federal Medicaid funds. DHS retained some of those general funds (called "directed purpose" funds) to pay for outpatient treatment slots for people ineligible for OHP whose incomes were between 100 percent and 200 percent of the federal poverty level. These people, referred to as the "working poor," had no health insurance and could not pay for treatment. Thus, in 1994 the publicly funded outpatient substance abuse treatment system was primarily funded by Medicaid's fee-for-service system, with some state-funded slots available for clients ineligible for OHP.

In spring 1995 OHP changed the administrative system for outpatient substance abuse treatment services, including methadone maintenance, from a fee-for-service model to a managed care model. The state legislature believed that the integration of substance abuse treatment into the OHP physical health benefit would reduce the inappropriate use and cost of medical and surgical services (Office of Medical Assistance Programs, 1997). Funds continued to be available to certain low-income populations through a limited directed-purpose outpatient treatment (DPOT) slot model, and the distribution of these slots was based on historical use--that is, DHS only allocated these DPOT slots to certain established treatment providers. Despite preparation at the state and provider levels, the transition to a managed care service delivery model created more chaos and problems in a three-year period than had occurred in Oregon's substance abuse treatment system in decades. As one treatment provider remarked, "It was like steamr olling the glass menagerie. When it was all done, there was nothing left but powder."

Forty-eight other states have placed their Medicaid programs under some form of managed care (Iglehart, 1999). In fact, Medicaid has shifted from an essentially fee-for-service government insurer to one of the nation's largest purchasers of managed care, with an estimated 40 percent of the nation's Medicaid recipients enrolled in a managed care plan (Moss, 1998; Rosenbaum et al., 1997). The use of managed care models is expected to result in cost containment, increased treatment availability, and higher quality services (Alexander & Lemak, 1997). These managed care strategies have raised many concerns, including--but not limited to--the denial of treatment, lower quality of care, and cost shifting (Alexander & Lemak; Mechanic, Schlesinger, & McAlpine, 1995). In addition, the social costs and stigma associated with substance abuse and its chronic nature often make substance abuse more difficult to treat than other medical problems (Mechanic et al.). Yet, McLellan, Lewis, O'Brien, and Kieber (2000) pointed out that its severity, chronicity, treatability, and relapse potential parallel medical illnesses such as asthma, diabetes, and hypertension.

Many professionals in the substance abuse treatment field believe that managed care organizations (MCOs) have neither the expertise nor the desire to deal with substance abuse, which may result in undertreatment of people who have substance abuse problems (American Society of Addiction Medicine, 1999; Mechanic et al., 1995). Moreover, MCOs use a variety of organizational structures, payment mechanisms, and utilization-management approaches that can adversely affect the delivery of substance abuse services (Mihalik & Scherer, 1998).

We examined Oregon's transition from a relatively straightforward state-run system to a highly complex managed care system. We used qualitative research data to describe the transition process, identify the barriers that emerged during the transition, discuss the pros and cons of the transition, and examine the outcomes from multiple stakeholders' perspectives.

METHOD

Conceptual Framework

We used grounded theory to examine Oregon's substance abuse treatment system in transition. A key tenet of grounded theory is that theory emerges in the process of observation and data analysis (Glaser, 1998). The study design included a multitiered process of data collection and analysis that resulted in multiple stages of interviewing key informants in the substance abuse treatment system (that is, treatment agency staff, managed care providers, and professionals in state administrative offices), analyzing the data for emerging themes and new avenues of inquiry, and iteratively building a foundation of understanding.

Three system domains of substance abuse treatment circumscribed this study. The first systemic domain was the organization of publicly funded substance abuse treatment; the focal point was the Office of Alcohol and Drug Abuse Programs (OADAP), the state substance abuse authority and organizer of publicly funded substance abuse treatment. The second domain was the administration of publicly funded substance abuse treatment; the focal point was the managed care organization (MCO) with the largest client base in Oregon as the administrator of Medicaid-funded substance abuse treatment. The third domain was the delivery of publicly funded substance abuse treatment; the focal point of this domain was treatment delivery under this MCO by 20 treatment providers across the state.

Data Collection and Sampling

Data were obtained through in-person interviews with key informants. We used a purposive sampling technique to select the key informants. Purposive sampling often is preferred in qualitative research because the most "information-rich" cases are selected (Patton, 1990). To elicit the richest information, we selected agency staff with knowledge of the publicly funded substance abuse treatment system and experience working under slot, fee-for-service, and managed care models during the OHP transition period. The interviewees represented all three system domains: organization (four interviewees), administration (four interviewees), and service delivery (24 interviewees). All interviews were audiotaped, transcribed, coded, and entered into the AnSWR qualitative data analysis program (Centers for Disease Control and Prevention, 1999).

Analysis

Grounded theory emphasizes the inductive nature of the analytic process, allowing the data to inform and direct further inquiry and analysis (Creswell, 1998). Inductive analysis involves the ongoing reduction, convergence, and coding of data as they are collected (Patton, 1990). Miles and Huberman (1994) described data reduction as the process of selecting, focusing, simplifying, abstracting, and transforming the data into a manageable and meaningful whole. As reduction takes place data must be converged which, according to Guba (1978), is the problem of figuring out what and how data elements fit together. Coding is a finer process of organizing and categorizing data into meaningful "chunks" or typologies (Miles & Huberman, 1994) and is the final analytic stage from which themes and categories emerge.

Interviews were conducted in two waves. We interviewed treatment providers (n = 18) in wave 1, investigating concepts and issues found in the literature and through document review. After completing wave 1 interviews, we conducted an interim analysis to explore, summarize, and identify areas of inquiry. A key finding at this early stage was the need to expand the data collection to include the other key stakeholders in the substance abuse treatment system. Wave 2 interviews (n = 14) included key stakeholders from the organization domain (n = 4), the administration domain (n 4), and additional stakeholders from the delivery domain (n 6) and focused on the new incisive lines of inquiry, investigating the concepts that emerged in wave one.

In the second wave of data analysis we refined the original codes to solidify understanding of the important themes revealed by the interviews. As the picture of the transition became increasingly clearer, pervasive qualities (Eisner, 1975) of the system transition emerged. Lincoln and Guba (1985) reported that pervasive qualities are the salient features that have been studied sufficiently such that either the initial assessment is considered erroneous or the issues are understood in a nonsuperficial way. In fact, the inquiry had reached a saturation point at which identified salient features persisted under continued observation. At this point of saturation we concluded that all of the cogent issues had been identified and further data collection was unnecessary.

Considerations for Interpretation

First, the majority of the key informant sample (75 percent) for this inquiry were substance abuse treatment providers. This emphasis on treatment providers' experiences reflects the distribution of key stakeholders across the system domains: one state substance abuse authority one MCO, and 20 community treatment providers. A possible limit to this sampling strategy is that the results may be biased toward the treatment provider perspective. The results presented, however, have given equal weight to each key informant group, because all three perspectives are important and compelling. Second, the sampling strategy used for selecting key informants was not intended to identify professional social workers; however, professionals in the substance abuse treatment field commonly are trained in diverse fields including social work, education, psychology, nursing, and counseling (Center for Substance Abuse Treatment, 2000). Hence, the social work perspective was likely captured through the interviews with treatment providers. Third, the publicly funded substance abuse treatment system in Oregon, as in other states, is a dynamic system under internal and external pressures, and the time-limited nature of Oregon's transition to managed care represented an opportunity to examine systemic change on the basis of a single pervasive influence. Fourth, the dependability of qualitative data often is determined by the extent to which the inquiry process is "tracked and trackable" (Guba & Lincoln, 1989). Dependability also relates to the consistency, predictability, and stability of the qualitative data collected. Because Oregon's treatment system is dynamic, the most consistent, predictable, and stable information about this system transition was situated in the experiences of enduring stakeholders. Thus, stakeholders with experience in publicly funded substance abuse treatment delivery in Oregon before and during the transition were interviewed to ensure the dependability and reliability of findings. Fifth, qualitative inquiry ( as with much quantitative inquiry) often collects retrospective accounts of past events, and it is important to keep in mind that the data for this study were not collected during all phases of the transition, however, this alone should not invalidate the perspectives of the key informants. Furthermore, we used several techniques to establish the credibility (that is, internal validity) of the inquiry (Lincoln & Guba, 1985), including two years of prolonged engagement in and persistent observation of this changing system.

RESULTS

As a reflection of the iterative nature of the research design, the following description interweaves findings and interpretation into a story about the experiences of treatment providers, state administrators, and MCO administrators in surviving the transition of Oregon's substance abuse treatment system. An organizing framework emerged through data analysis, which revealed that the transition to a managed care model of Medicaid funded substance abuse treatment m Oregon occurred in three phases: pretransition, ramp-up, and response. Several themes were associated with these three phases.

Pretransition Phase

The pretransition, or preparation, phase began as early as two years before implementation of OHP. Findings show that preparations by the primary stakeholders in the substance abuse treatment system (OADAP and the Office of Medical Assistance Programs [OMAP], the outpatient treatment provider community, and the MCOs) were isolated and focused on a limited set of issues. The three stakeholder groups did not coordinate their preparations for the transition and did not fully anticipate potential problems.

State Agency Preparations. Approval of Oregon's Medicaid waiver cleared the way for the implementation of managed care through OHP, first for Medicaid-funded physical health benefits and later for chemical dependency benefits. State agencies affected by the changes quickly began preparing to implement OHP.

OADAP, the agency in closest contact with substance abuse treatment providers and MCOs interested in managing the Medicaid chemical dependency benefit, took the lead in preparing for the transition to treatment services delivery under OHP. Of primary concern were state administrative rules related to implementing uniform client placement and discharge criteria (American Society of Addictions Medicine [ASAM] and Oregon's version, referred to as OSAM), which were meant to standardize the assessment and placement of clients into appropriate levels of care for both treatment providers and MCOs. To initiate a dialogue about the impact of OHP on Medicaid-funded outpatient substance abuse treatment, OADAP conducted several meetings throughout the state with treatment agency staff and MCO administrators and informed participants about the new OSAM criteria. Participants had an opportunity to express their concerns about the transition to a managed care model.

Another preparatory move by OADAP was to designate "essential community providers." According to the interviewees, OADAP had concerns (based partly on input from treatment agency staff and MCOs) that managed care might result in some outpatient substance abuse treatment providers going out of business. OADAP created the concept of essential community providers to protect agencies that had been providing publicly funded outpatient substance abuse services in local communities before the transition to managed care. In addition, OMAP included in all contracts with MCOs a requirement that a minimum of 50 percent of their OHP members obtaining substance abuse treatment must do so through essential community providers.

Treatment Provider Preparations. Although outpatient substance abuse treatment providers attended the OADAP information meetings and made appropriate preparations to implement the OSAM system, the information collected through this inquiry indicates that most of them did little with the information they received to prepare for the transition to managed care. The treatment providers who prepared for the transition appeared to have focused on the delivery of treatment services. One treatment provider made these comments about the preparation process: "We began to investigate.... briefer methods of therapy and utilization management approaches.... [We] developed group programs... [and] de-emphasized individual therapy. [We] became far more goal oriented and, I think, instituted a lot of things that are beneficial to the client."

The lack of preparation for the transition by treatment providers might be related to the historically collaborative relationship the treatment providers had enjoyed with staff of OADAP and OMAP in the slot and fee-for-service models. The treatment providers exercised some influence over these state agencies in terms of the creation and administration of policies related to substance abuse treatment. Thus, preparing for the advent of managed care might have seemed superfluous in a system in which the treatment providers were accustomed to influencing policy decisions. Furthermore, treatment providers would have had to spend considerable time and resources to determine the impact of managed care on the Medicaid-funded treatment system. One interviewee remarked, "I think people were not willing to spend the money [to prepare] if they didn't have to." A third possible reason for this lack of preparation was that many treatment providers already had been dealing with managed care companies in their practices for some time and may have expected that their experiences with Medicaid managed care would be similar.

Notable exceptions to this lack of preparation by treatment providers were local efforts, primarily in rural areas across the state, in which groups of treatment providers formed behavioral health networks to collaboratively address the issues involved with the transition to managed care.

MCO Preparations. After it became clear that the chemical dependency benefit under OHP would be integrated with the physical health benefit, instead of being a separate benefit (that is, a carve-out), MCOs sought to clarify expectations for penetration rates. OADAP defined penetration rates as the percentage of OHP enrollees who gained access to substance abuse treatment. OADAP has consistently advocated for increased referrals to and use of substance abuse treatment services among the publicly funded population, citing research indicating that early detection and treatment of substance abuse problems yield significant savings in health and social costs (for example, French, Mauskopf, Teague, & Roland, 1996). These penetration rates are of major importance to the MCOs because penetration is integrally tied to the level of financial risk the MCOs incur (that is, a higher penetration rate results in a greater payout for treatment).

As did the treatment providers, the MCOs focused their preparations in specific areas and seemingly gave little consideration to the broader impact of moving to a managed care model. Their lack of preparation might have been related to their reluctance to take on the management of the chemical dependency benefit under OHP. The reasons for this reluctance included the costliness of methadone maintenance treatment and the MCOs' lack of knowledge about and experience with substance abuse treatment. One MCO administrator commented, "We didn't ask for chemical dependency... it's not something we fought ferociously for." OADAP, however, wanted the chemical dependency and physical health benefits under OHP integrated. OADAP administrators maintained that the point of associating substance abuse treatment with physical health under OHP was to demonstrate the benefit of substance abuse treatment on overall health outcomes and cost containment.

Notwithstanding the isolated issue-focused efforts that the key informants undertook to prepare for the transition to managed care, the pretransition period was characterized by few systematic efforts to explore the operational aspects (such as preauthorization procedures, reimbursement methods and criteria, and new paperwork requirements) of this transition. In addition, little collaboration appears to have occurred among the three stakeholder groups, especially between the MCOs and treatment providers. Treatment providers needed more training on the consequences of the transition on their day-to-day operating procedures and paperwork requirements. MCOs needed more training on working with publicly funded treatment providers and a Medicaid population with multiple medical needs, including a high rate of substance abuse. Early cross-training of the treatment provider community and MCOs could have established relationships and opened a preimplementation dialogue for exploring possible issues. Several MCO admin istrators reported having worked to bring treatment providers together to encourage coordination and the sharing of resources, but the evidence suggests that MCOs and treatment providers did not communicate effectively before the transition. After the transition, one MCO administrator remarked, "I didn't realize how anxious the agencies really were [about managed care]."

Ramp-Up Phase

Issues that cut across the three stakeholder groups, including problems with reimbursement, speed and magnitude of changes, and administrative burden, characterized the ramp-up phase. As the outpatient substance abuse treatment system "ramped up" for managed care, treatment providers, MCOs, and state administrators began to experience the full effect of the transition to a managed care model. The lack of effective, productive communication during the pretransition phase and the lack of systemwide preparedness led to immediate and often overwhelming struggles for stakeholders. As a result, the state substance abuse and Medicaid agencies (that is, OADAP and OMAP) spent considerable time and resources reacting to problems and were less able to provide the collaborative support and leadership characteristic of the slot and fee-for-service systems. The problems that quickly beset the Medicaid-funded substance abuse treatment system included difficulties with reimbursement procedures and the additional administrati ve burden experienced by treatment providers and MCOs. The speed with which the system changed and the magnitude of those changes exacerbated these problems.

Reimbursement Problems. Treatment providers and MCO administrators expressed concern about the reimbursement process during the ramp-up phase. Treatment providers complained that MCOs did not pay claims in a timely manner, and MCO administrators complained that treatment providers were not compliant with their billing procedures. One state administrator explained, "One big problem was that MCOs were unfamiliar with the waiver forms used to submit claims ... [that] providers bad been using for years and ... there were denied claims and dramatic delays in payment?' Another interviewee conveyed the treatment providers' frustration with the reimbursement process and the resulting financial strain: "[MCOs] denied claims and denied claims and made us rebill and rebill and rebill because we weren't doing it just the way they wanted it."

Administrative Burden. The administrative burden experienced by the treatment providers, and to some extent the MCOs, was one of the major problems that emerged during the ramp-up phase. The interviewees largely described this burden in terms of increased paperwork, but the scope of the problem was much broader. The justification, accountability, quality assurance, and reauthorization procedures required by the MCOs either did not exist or had not been enforced under prior arrangements with the state. One state agency staff member explained, "There were no authorization requirements, and there were really no checks and balances [under slot and fee-for-service]. All they had to do was show... a diagnosable need."

Many treatment agencies worked with multiple MCOs that maintained their own set of procedures for doing business. These procedures could, and often did, vary substantially among the MCOs, and these variations presented a costly paperwork burden for the treatment providers. Many of the treatment providers believed that meeting these multiple paperwork requirements diverted too large a proportion of their time and money from their primary purpose of providing treatment. The problem was compounded by the fact that direct treatment services were the only billable services for treatment providers. One frustrated treatment provider commented, "Dollars [are] wasted by having to hire two and three more billing clerks when I could be hiring another therapist." Another treatment provider reported, "Because no one was prepared for the administrative costs associated with the change [to managed care] ... we used much more of our resources [on costly computer systems and training in new administrative procedures]."

Speed and Magnitude of Changes. The speed with which elements of the outpatient substance abuse treatment delivery system changed as managed care went into effect and the magnitude of those changes exceeded expectations. Long-standing associations and the means of conducting business that treatment providers had become habituated to were suddenly changed by an unfamiliar and comparatively unresponsive system. The nature of the relationships among treatment providers and between treatment providers and OADAP changed immediately and comprehensively. Managed care injected competition for clientele into a system that had been relatively cooperative. One treatment provider remarked, "Treatment providers no longer received support from their peers. The risk now is that you are on your own as a treatment provider?' In addition, the treatment providers' political influence in the treatment system diminished significantly as the contractual relationship changed from a state--treatment provider arrangement to a MCO--t reatment provider arrangement. One state administrator commented that in this new situation, "Treatment providers went from having some influence over the treatment delivery system to having almost none."

Managed care also brought new and far-reaching changes to how substance abuse treatment was to be conducted, and many treatment providers had difficulty adapting to the transition. One treatment provider commented, "What came was not only a change in payer but also a change in some concepts about how we provided services, how long we provided services, and who we provided services to?' Hindsight suggests that the three stakeholder groups could have better anticipated and more fully discussed these issues during the pretransition phase.

Response Phase

The response phase was largely characterized by reactions to the problems that emerged during the ramp-up phase. The data indicate that the response phase was more fluid than the other phases.

During the transition to managed care, QADAP used several strategies to respond to the emerging issues. The office sponsored regional meetings of treatment providers across the state to provide information about the transition and to allow treatment providers to share their experiences, troubleshoot, and share data (for example, claims and encounter submissions and reports to the state's Client Process Monitoring System). QADAP used the meetings as an opportunity to discuss such important issues as cost offsets, system integration (with the physical health benefit), and the uniform patient placement and discharge criteria. These meetings generated discussion about the changing treatment delivery system. To disseminate this information OADAP developed the Alcohol and Drug Clarifier, or Green Paper, a periodic mailing to treatment providers and MCOs. The Green Paper provided information on finances, access, and other issues. In addition, OADAP sponsored a hotline to answer treatment providers' questions about t he transition. The hotline also provided prerecorded information about the status of managed care in. Oregon.

OADAP also established a coordinating committee made up of representatives from treatment agencies, MCOs, and the state agencies OADAP and OMAP. The bimonthly committee meetings allowed members to air their concerns and report problems associated with the transition to the managed care model. One state administrator remarked, "It was during these sessions that [OADAP] began to learn about the high costs that treatment providers were experiencing with the transition to managed care." In addition, in an attempt to help agencies complete the transition, OADAP developed fiscal fitness sessions, the content for which was drawn from the information collected during the committee meetings, regional treatment provider meetings, and the hotline.

Perceived Impact of the Transition to Managed Care

The interviewees reported that in general the transition to managed care resulted in higher treatment access rates, shorter waiting lists, increased professionalism in the treatment provider community, reductions in costs of providing outpatient substance abuse treatment, and a lack of commitment to serving rural areas.

Higher Treatment Access Rates. The interviewees suggested that access to substance abuse treatment had improved under OHP and that managed care had promoted higher treatment penetration rates. Statewide data confirm this perception. Not only did the HGFA waiver almost double the Medicaid-eligible population; but the penetration rate also doubled from 1994 to 1998, resulting in an almost fourfold increase in the number of Medicaid clients in treatment (Deck et al., 2000).A state agency staff member commented, "There is more universal access to treatment now. That's mostly because of expanded eligibility, more so than I think managed care itself. But managed care has provided more solid networks of doctors to people than fee-for-service alone did?' In addition, an MCO administrator stated, "I see twice as many people in treatment [now] as were in treatment before [managed care] started."

In terms of treatment access and utilization, some treatment providers believe that expanded access to health services under OHP had actually reduced the stigmatization associated with publicly funded treatment. Others, however, reported that the number of clients served in substance abuse treatment programs increased during the initial stages of the transition to managed care. Most of that increase resulted from the shorter wait time for treatment that resulted from increased capacity under OHP and the Medicaid fee-for-service model, which removed the cap on client flow inherent in the slot model. An important perception among these interviewees was that the actual number of clients seeking treatment had not increased and that the problems with managed care's reimbursement procedures had in fact curtailed treatment providers' ability to expand staff or facilities to meet the existing need. One treatment provider commented, "We walk this very tight rope between capacity and reimbursement. We can never get ahe ad of that. We have no margin for error here."

FewerPeople on Wait Lists. The shorter waitlists for treatment began with the transition of the majority of clients from the state-funded slot model to the Medicaid-funded fee-for-service model, which allowed treatment providers more flexibility in billing for services and created opportunities to increase service capacity. According to interviewees, expanded Medicaid eligibility and the implementation of fee-for-service and managed care models changed the way treatment providers thought about service provision, which in turn contributed to shorter wait lists. In other words, under the fee-for-service and managed care models, treatment providers focused on engaging clients in treatment and moving them through the treatment process because the revenue the treatment providers received was based on the services they provided.

An unanswered question is the extent to which the managed care model, as opposed to the fee-for-service model, could sustain shorter wait lists. One concern among the treatment providers was their diminishing ability to increase capacity under the managed care model to meet the need for treatment. Increased administrative costs and uncertainties regarding the reimbursement process curtailed treatment providers' ability to expand services or increase capacity. In contrast, under the fee-for-service model, administrative costs were relatively low and reimbursement from the state was stable, which allowed treatment providers to plan for future treatment needs by increasing capacity or expanding services. Nevertheless, managed care has sustained the trends of increased access and shorter wait lists.

Increased Professionalism in the Treatment Provider Community

Another finding of this inquiry is the perception that professionalism among treatment providers increased under managed care. One treatment agency director said, "[Managed care] has made good counselors in much higher demand." According to the interviewees, this increased professionalism was evidenced by increased goal orientation and clinical skill required under a managed care model. Specifically, setting treatment goals (that is, by standardized assessment and uniform placement criteria) and documenting progress toward achieving those goals (that is, accountability) are required elements of the managed care reimbursement system. Furthermore, managed care mandated higher coursework and degree requirements for counselors, increased client monitoring requirements, and placed a greater emphasis on quality assurance and treatment outcomes.

Increased professionalism appears to be intertwined with another systemic change that occurred during the transition to managed care. About the time OHP went into effect, new administrative rules required treatment providers in Oregon to implement uniform client placement and discharge criteria. OADAP based these criteria on the placement and discharge criteria developed by ASAM (Hoffmann, Halikas, Mee-Lee, & Weedman, 1991). One state administrator commented, "We wanted [the OSAM criteria] to be user friendly for the treatment community and for the MGOs that didn't have a clue about substance abuse and dependence [disorders]."

An important point about the relationship of the implementation of uniform placement and discharge criteria to the perception of increased professionalism is that treatment providers, MCO administrators, and state administrators believed that the change forced an individualized focus on the treatment process. The interviewees expressed a sense that treatment providers needed to think more in terms of individual treatment planning and develop greater skill at assessing the problems related to substance abuse to be able to effectively use the new placement criteria-data collected through client interviews and treatment agency chart reviews corroborates this notion (Deck, Brown, & Gabriel, 1999; Gabriel, Deck, Mondeaux, & Brown, 1999).

Thus, this inquiry raises the question of whether these perceptions about changes in professionalism stem from the model of managed care or whether managed care contributed to an increase in professionalism that was already underway as a result of other administrative changes, such as the use of uniform client placement criteria. One stakeholder provided a possible explanation: "I think managed care has made people think more in terms of goal orientation than before, but I think the field was moving in that direction anyway. So managed care was really a reinforcer in that way."

Reduced Costs of Providing Outpatient Substance Abuse Treatment

Another perception that emerged is that managed care helped reduce the costs associated with substance abuse treatment. One treatment provider remarked, "We are spending a whole lot less than I thought we were when I look at the bottom lines. That funds are limited on a global sense has kind of sunk in all the way through, and everybody's a little bit more careful and purposeful about what they do."

The interviews revealed, however, a powerful sense--particularly among treatment providers--that these cost savings have not benefited substance abuse treatment as a whole. The entire cost issue is exacerbated, in fact, by the knowledge that one of the largest MCOs in the state offset losses in physical health services in OHP with savings realized in substance abuse treatment in the first two years of the transition. According to an administrator in another MCO, " [This MCO] has pretty steadily fed its bottom lines since [OHP's] inception." A common sentiment expressed by treatment providers was that money allocated for substance abuse treatment through OHP should be used to address clients' substance abuse needs and not to offset MCO losses in physical health services. MCO administrators countered with the argument that providing integrated health services to treat the whole person often requires making the decision to use additional resources for medical or surgical care when medical necessity dictates.

Little Commitment to Serving Rural Areas

Under OHP and the contracts with OMAP, MCOs have the flexibility to move out of counties when their two-year contracts expire. One MCO administrator remarked, "Now that costs have stabilized, we're more or less breaking even. But ... we've steadily retrenched from counties where we just couldn't make a go of it financially--primarily rural counties." In fact, the largest MCO under OHP drastically reduced the number of counties it served from 31 of Oregon's 36 counties in 1996 to 12 in 1998 (Laws, Gabriel, & McFarland, 2002). Another reason for the exodus of MCOs from rural counties was physicians' unwillingness to participate on the MCO physical health provider panels; without physical health providers MCOs could not maintain physical or behavioral health services in those counties.

When MCOs made the decision to retrench--that is, to cease providing service to a particular county--treatment providers reported that the cost and burden of providing substance abuse treatment in those counties increased. The interviewees affected by retrenchment suggested that it disrupted the structure and continuity of substance abuse treatment, because their clients either enrolled in other MCOs still operating in that county or became "op en card" with the state (that is, returned to the fee-for-service system) if no MCOs were left.

CONCLUSION

Recent research (Weisner, Mertens, Parthasarathy, Moore, & Lu, 2001) indicates that, for at least some substance abuse treatment clients, there is value in devising service systems that integrate substance abuse treatment with general medical care. Oregon took the first step down that road in its Medicaid managed care program in 1995. Cultures clashed, as public sector providers had been insulated from managed behavioral health care tactics, including credentialing, preauthorization and reauthorization requirements for services, and utilization review, and managed care organizations were happily ignorant of the complex bureaucracy associated with the public system. Yet, when these two worlds collided, the results seem to have been beneficial, or at least not harmful, for clients in terms of increased access and shorter wait lists for treatment. Moreover, the universe did not implode for either the public sector providers or the managed care organizations. The capitated payment rates seemed to have been adequa te for the MCOs; and public sector providers learned to survive in the new world of managed care, as had their private sector counterparts some years earlier.

Many lessons can be learned, however, from this systemic transition in Oregon. Three stand out from our inquiry. First, the early facilitation of communication and relationship building among state, MCO, and local provider stakeholders would likely have initiated the identification, discussion, and resolution of a broader array of issues that caused problems later. Second, the establishment of uniform reporting and paperwork requirements would have substantially reduced the confusion and burden that befell the public providers. Third, systematic enforcement of contractual requirements and procedural guidelines may have led to more consistent operating procedures by the MCOs and enhanced the realization of other visions of the Oregon Health Plan (for example, increased referrals to behavioral health services by primary care physicians).

Implications for social workers becoming oriented to managed care in the public sector are many. At the local service delivery level, case management has become increasingly important, because most publicly funded clients manifest multiple physical and behavioral health care needs. These individuals will have little chance of navigating by themselves the bureaucracy and "cost containment" mentality of managed care organizations. Furthermore, in geographic areas in which multiple MCOs compete for clients, social workers need to become familiar with different preauthorization and monitoring requirements among MCOs, as well as which treatment agencies belong to which MCO provider panels. The latter is particularly significant when services for special populations (defined by either clinical or cultural characteristics) are under contract to only one MCO and clients needing those services are members of other MCOs.

Social workers could also consider their roles among different stakeholder groups and use the lessons learned from Oregon's transition to help guide them through similar transitional events. Social workers at all levels (state agencies, managed care organizations, and treatment provider agencies) would serve their organizations and clients well by proactively planning for these types of systemic changes. Social workers could take the lead in advocating for clients and ensuring that clients' needs and equal access to treatment for all special needs populations become part of the planning and decision-making process. This may be most important at the state agency and MCO levels, but, as learned from Oregon's case, treatment provider agencies also need to plan proactively for these types of systemic changes, both within their agencies and with other system stakeholders. Social workers may be in the best position to develop structures to support client needs, build communication links with MCOs and state agencie s, and form provider networks to strengthen their voice and standing in the system. Moreover, social workers are uniquely capable of advocating for clients before they enter treatment (ensuring access), while they are in treatment (quality assurance), and after treatment is completed (that is, providing aftercare and recovery and relapse support). Social workers are in the ideal situation of spanning the boundaries between advocating for the best interest of their clients and actively planning for a transition that may not be able to meet the needs of their clients. But because social workers also span the boundaries between stakeholder groups they can ensure that systemwide planning and implementation processes are designed to best meet the needs of publicly funded clients.

Through this inquiry, we began to build an understanding of Oregon's transitioning substance abuse treatment system that moved beyond a "good or bad" judgment. The sometimes chaotic and stressful process was not without its successes. Costs were reduced and public providers began to take on an increased sense of professionalism. These successes suggest a larger message. Before OHP, the state operated a segregated system in which chemical dependency clients were relegated to social welfare agencies. Oregon's new approach is based on the notion that substance abuse disorders are health problems that are properly addressed by the health care system. States wishing to adopt this evidence-based philosophy might look to lessons learned in Oregon.

Original manuscript received June 4, 2001

Final revision received December 4, 2002

Accepted December 23, 2002

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ABOUT THE AUTHORS

Ryan D'Ambrosio, MA, is research associate, RMC Research Corporation, 522 SW 5th Avenue, Suite 1407, Portland, OR 97204-2131; e-mail: ryan_dambrosio@rmccorp.com. Frank Mondeaux, MSW, PhD, is director, Research and Evaluation, Bridges Learning Systems, Lake Oswego, OR. Roy M. Gabriel, PhD, is senior research associate and principal investigator, and Katherine E. Laws, BA, is research associate, RMC Research Corporation, Portland, OR. This research was supported in part by Substance Abuse and Mental Health Services Administration Cooperative Agreements 1 UR7T11129401 and 1 KD1T11204501 (Dr. Gabriel).
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Author:D'Ambrosio, Ryan; Mondeaux, Frank; Gabriel, Roy M.; Laws, Katherine B.
Publication:Health and Social Work
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Date:May 1, 2003
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