Academic journal article Albany Law Review

Special Needs Plans: Adapting Medicaid Managed Care for Persons with Serious Mental Illness or HIV/AIDS

Academic journal article Albany Law Review

Special Needs Plans: Adapting Medicaid Managed Care for Persons with Serious Mental Illness or HIV/AIDS

Article excerpt


New York State is now in the midst of a massive, complex effort to move most of its huge Medicaid population into private managed care plans (MCPs).(1) As explained below, the lure of Medicaid managed care was irresistible to the State's policymakers; it offered the prospect of significant cost savings for the state while improving access to care and quality of care for the poor.(2) General concerns about Medicaid managed care voiced by many melted before the fiscal, programmatic and political logic of this shift, particularly as responsive safeguards were identified.(3)

Yet from the outset, concerns arose that mainstream, comprehensive MCPs, designed to meet the episodic health care needs of the general population, were ill-suited to the needs of Medicaid clients with chronic, severe illnesses, or disabilities such as mental illness, developmental disabilities, drug or alcohol addiction, HIV infection or AIDS, or long-term illnesses of the elderly.(4) The chief concerns were that mainstream MCPs would: disrupt the existing relationships patients had with specialists or caregivers; over-rely on primary care physicians for the specialized needs of these enrollees; fail to include adequate numbers of specialized providers in their network; unduly restrict access to needed services; not make the latest treatments available; and push enrollees toward accepting less expensive treatment options.(5) Additionally, it was feared that mainstream MCPs would divert public resources, previously earmarked for these subpopulations, and undermine the infrastructure of dedicated providers in these areas.(6)

Accordingly, three broad policy options emerged with respect to Medicaid services for disabled populations:

(1) Maintain the status quo by excluding certain chronically ill or disabled populations from Medicaid MCPs, or by "carving-out" specialized services from the MCP benefit package;

(2) Enroll these groups into comprehensive mainstream MCPs along with other Medicaid clients, perhaps adding special safeguards to address their unique concerns about quality and access; or

(3) Develop separate, special MCPs for select populations and services.

From 1991 through 1995, New York employed the first two approaches, excluding certain chronically-ill or disabled groups from MCPs while allowing others to enroll, and carving out some specialized services while including others in the benefit package.(7) But, as the State became more intent on mandating enrollment on a broad basis, and as advocacy and provider groups became more sophisticated, focused, and active, a consensus emerged in support of the third option--at least as applied to persons with severe mental illness and persons with HIV infection or AIDS.(8) Accordingly, in 1996, when the Legislature reauthorized the State's Medicaid Managed Care Law,(9) it authorized two types of "Special Needs Plans" or "SNPs": (1) Mental Health SNPs;(10) and (2) Comprehensive HIV SNPS.(11)

The SNP concept is simple. A SNP is a MCP that may enroll only those Medicaid clients who have a specific chronic condition, such as severe mental illness or HIV infection.(12) The SNP must meet special qualifications, must be certified by the State, and must abide by rigorous requirements.(13) It can expect to receive a significantly higher capitated rate than a mainstream Medicaid MCP.(14)

As of this writing, mental health providers, HIV care providers, health management organizations (HMOs), and other interested parties are striving to assemble or join networks that can apply to be SNPs.(15) Meanwhile, the responsible State agencies--the Department of Health (DOH) and the Office of Mental Health (OMH)--are scrambling to fulfill their statutory mandate to: (1) develop specific requirements for SNPs; (2) conduct a contracting process; and (3) calculate acceptable capitation rates.(16) All this is occurring while the State struggles to move forward with its broader, parallel task--enrolling the general Medicaid population into mainstream MCPS. …

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