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entitled 'Medicaid Managed Care: Use of Limited Benefit Plans to 
Provide Mental Health Services and Efforts to Coordinate Care' which 
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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

September 2013: 

Medicaid Managed Care: 

Use of Limited Benefit Plans to Provide Mental Health Services and 
Efforts to Coordinate Care: 

GAO-13-780: 

GAO Highlights: 

Highlights of GAO-13-780, a report to congressional requesters. 

Why GAO Did This Study: 

Medicaid is the largest payer of mental health services in the United 
States and Medicaid spending on such services is likely to grow. Some 
states provide mental health services to Medicaid beneficiaries 
separately from physical health care services through contracts with 
limited benefit plans, which are paid on a per person basis to provide 
a defined set of services. While using these plans to provide mental 
health services may control costs, it can also increase the risk that 
these services will not be coordinated with physical health care 
services. Coordinated care is important for Medicaid beneficiaries 
with mental illnesses because they are more likely than others to have 
ongoing health conditions. GAO was asked for information on states’ 
use of Medicaid managed care. In this report, GAO examined the (1) 
extent that states provide mental health services through limited 
benefit plans, and (2) steps states and CMS have taken to facilitate 
the coordination of mental and physical health care services for adult 
beneficiaries enrolled in these plans. 

GAO collected information on enrollment, payments, and services from 
the 13 states that contracted with limited benefit plans to provide 
mental health services to adult beneficiaries. GAO also selected 4 
states based on, among other criteria, the number of beneficiaries 
enrolled in limited benefit plans. GAO reviewed documents from the 4 
states and CMS, and interviewed officials to identify steps taken to 
coordinate care. 

The Department of Health and Human Services provided technical 
comments, which GAO incorporated, as appropriate. 

What GAO Found: 

Thirteen states reported that in fiscal year 2012 they paid a total of 
about $5.6 billion to limited benefit plans to provide mental health 
services to about 4.4 million adult Medicaid beneficiaries. States can 
enroll different populations—such as adults who are blind, disabled, 
or have developmental disabilities—in limited benefit plans, which 
could contribute to the variation in the number of adults enrolled and 
level of capitated payments made across the 13 states. 

Figure: Number of Adult Medicaid Beneficiaries Enrolled in Limited 
Benefit Plans Providing Mental Health Services, Fiscal Year 2012: 

[Refer to PDF for image: horizontal bar graph] 

State: Pennsylvania; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 1,140,830; 
Number of adult Medicaid beneficiaries: 1,384,690. 

State: Arizona; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 780,049; 
Number of adult Medicaid beneficiaries: 905,958. 

State: Washington; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 541,225; 
Number of adult Medicaid beneficiaries: 693,719. 

State: Oregon; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 314,825; 
Number of adult Medicaid beneficiaries: 377,905. 

State: North Carolina; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 241,761; 
Number of adult Medicaid beneficiaries: 621,387. 

State: Colorado; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 235,847; 
Number of adult Medicaid beneficiaries: 253,623. 

State: Iowa; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 220,989; 
Number of adult Medicaid beneficiaries: 343,213. 

State: Florida; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 215,303; 
Number of adult Medicaid beneficiaries: 2,021,880. 

State: Massachusetts; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 210,833; 
Number of adult Medicaid beneficiaries: 832,855. 

State: New Mexico; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 155,820; 
Number of adult Medicaid beneficiaries: 235,294. 

State: Michigan; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 131,671; 
Number of adult Medicaid beneficiaries: 1,061,590. 

State: Utah; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 125,619; 
Number of adult Medicaid beneficiaries: 161,865. 

State: Kansas; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 92,938; 
Number of adult Medicaid beneficiaries: 177,449. 

Source: GAO analysis of state reported data. 

[End of figure] 

Four selected states-—Florida, Kansas, Michigan, and Washington—-took 
three steps to facilitate the coordination of mental and physical 
health care services: 

1. incorporating care coordination requirements in limited benefit 
plan contracts; 

2. implementing additional steps to coordinate care, such as policies 
that included incentives to coordinate care; and; 

3. monitoring limited benefit plans’ implementation of care 
coordination. 

GAO found that the Centers for Medicare & Medicaid Services’ (CMS) did 
not take direct steps to facilitate care coordination, because its 
role is to oversee and provide technical assistance. In its oversight 
role, CMS reviewed and approved state submitted documents, such as 
contracts with mental health limited benefit plans, some of which 
contained care coordination requirements. 

View [hyperlink, http://www.gao.gov/products/GAO-13-780]. For more 
information, contact Carolyn L. Yocom at (202) 512-7114 or 
yocomc@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Enrollment, Payment, and Scope of Services Varied Across All 13 States 
Using Limited Benefit Plans for Mental Health Services: 

Selected States Generally Took Three Steps to Facilitate Coordination 
of Care, and CMS Reviewed Waivers and Contracts: 

Agency Comments: 

Appendix I: Summary of Selected States' Use of Limited Benefit Plans 
to Provide Mental Health Services, Fiscal Year 2012: 

Appendix II: Adults Enrolled in Medicaid and Limited Benefit Plans 
Providing Mental Health Services, Fiscal Year 2012: 

Appendix III: Total Medicaid Payments and Capitated Payments to 
Limited Benefit Plans for Adults, Fiscal Year 2012: 

Appendix IVGAO Contact and Staff Acknowledgments: 

Table: 

Table 1: Scope of Services Provided by Limited Benefit Plans by State, 
Fiscal Year 2012: 

Figures: 

Figure 1: Number of Adult Medicaid Beneficiaries and Number of Adult 
Medicaid Beneficiaries Enrolled in Limited Benefit Plans Providing 
Mental Health Services, Fiscal Year 2012: 

Figure 2: Percent of Total Medicaid Payments to Limited Benefit Plans 
Providing Mental Health Services, Fiscal Year 2012: 

Abbreviations: 

CMS: Centers for Medicare & Medicaid Services: 

EQR: External Quality Review: 

EQRO: External Quality Review Organization: 

PAHP: Prepaid Ambulatory Health Plan: 

PIHP: Prepaid Inpatient Health Plan: 

[End of section] 

GAO:
United States Government Accountability Office: 
441 G St. N.W. 
Washington, DC 20548: 

September 30, 2013: 

The Honorable John D. Rockefeller, IV: 
Chairman: 
Subcommittee on Health Care: 
Committee on Finance: 
United States Senate: 

The Honorable Henry A. Waxman: 
Ranking Member: 
Committee on Energy and Commerce: 
House of Representatives: 

Medicaid, a joint federal-state program that finances health insurance 
coverage for certain categories of low-income individuals, is the 
largest payer of mental health services in the nation. Many of the 67 
million beneficiaries enrolled in Medicaid have mental health care 
needs.[Footnote 1] Between 1998 and 2009, Medicaid spending on mental 
health services increased from about $16.5 billion to $39.1 billion. 
[Footnote 2] Spending for mental health services in Medicaid is likely 
to continue growing as millions of individuals become eligible to 
receive Medicaid coverage under the Patient Protection and Affordable 
Care Act.[Footnote 3] We previously reported that Medicaid 
beneficiaries sometimes experience challenges accessing mental health 
services.[Footnote 4] For some populations, such as individuals with 
complex health care needs, accessing mental health services can be 
especially problematic. 

The Centers for Medicare & Medicaid Services (CMS), within the 
Department of Health & Human Services, is the federal agency 
responsible for overseeing the Medicaid program. Within broad federal 
requirements, states administer the day-to-day operations of their 
Medicaid programs and provide services to Medicaid beneficiaries 
through a variety of health care arrangements. Some states have 
elected to provide mental health services separate from physical 
health care services through limited benefit plans, which are managed 
care arrangements designed to provide a narrowly defined set of 
services. Under limited benefit plans, states make capitation 
payments--a fixed dollar amount per Medicaid beneficiary--for a 
specified set of services.[Footnote 5] Through the use of limited 
benefit plans, states seek to ensure a ready source of providers, 
control costs, and improve quality of care through better management 
of beneficiary needs. Separating mental and physical health care 
services increases the risk that these services will not be 
coordinated; yet, little is known about how states and health care 
providers coordinate care for beneficiaries enrolled in limited 
benefit plans. 

You requested information on states' use of managed care to deliver 
health care services to Medicaid beneficiaries. We previously issued a 
report examining variation in states' use of managed care and reported 
concerns about the availability of information on limited benefit 
plans.[Footnote 6] This report examines (1) the extent to which states 
provide mental health services to adult Medicaid beneficiaries through 
limited benefit plans, and (2) the steps states and CMS have taken to 
facilitate the coordination of mental and physical health care 
services for adult Medicaid beneficiaries enrolled in limited benefit 
plans. 

To determine the extent to which states provide mental health services 
to adult Medicaid beneficiaries through limited benefit plans, we 
collected and analyzed Medicaid enrollment and payment data for fiscal 
year 2012 from all of the 13 states that contracted with limited 
benefit plans to provide mental health services to adult Medicaid 
beneficiaries on a capitated basis.[Footnote 7] We identified these 
states by reviewing CMS's most recent Medicaid managed care enrollment 
report and interviewing CMS officials,[Footnote 8] and sent the 13 
states a data collection instrument we developed. Additionally, we 
obtained information on how these states collected the reported data 
and checks they performed to ensure accuracy. Based upon states' 
responses, we determined that data collected were sufficiently 
reliable for our purposes. 

To determine the steps that states and CMS have taken to facilitate 
the coordination of mental and physical health care services, we 
interviewed officials and reviewed relevant documents from selected 
states and CMS. To obtain information on state actions, we selected 
four states--Florida, Kansas, Michigan, and Washington--that varied in 
terms of (1) the percentage of Medicaid beneficiaries enrolled in 
limited benefit plans providing mental health services, (2) the size 
of their Medicaid programs, and (3) geographic location. (See appendix 
I for more information on program characteristics of the selected 
states.) For these states, we collected and reviewed relevant 
documents for fiscal years 2011 and 2012, including state contracts 
with limited benefit plans, and findings from reviews conducted on 
limited benefit plans. We also interviewed officials from the selected 
states and external stakeholders, including the National Quality Forum 
and the National Association for Mental Illness, to collect 
information on the steps states have taken to facilitate the 
coordination of mental and physical health care services. To determine 
the steps CMS has taken to facilitate the coordination of mental and 
physical health care services for adult Medicaid beneficiaries 
enrolled in limited benefit plans, we reviewed relevant federal waiver 
applications,[Footnote 9] state contract review results, and regional 
monitoring guidance. We also interviewed officials from CMS's central 
office and the four regional offices responsible for overseeing the 
four selected states. 

We conducted this performance audit from October 2012 to September 
2013 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

CMS and states jointly administer the Medicaid program. States have 
flexibility within broad federal parameters for designing and 
implementing their Medicaid programs. For example, state Medicaid 
programs must cover certain populations and benefits--known as 
mandatory populations and benefits--but may choose to also cover other 
populations and benefits--known as optional populations and benefits. 
[Footnote 10] Also, states may choose different payment and delivery 
systems to provide benefits to Medicaid beneficiaries, such as fee-for-
service or managed care. Under a fee-for-service system, health care 
providers claim reimbursement from state Medicaid programs for 
services rendered to Medicaid beneficiaries. Under a Medicaid managed 
care system, states contract with managed care organizations to 
provide or arrange for medical services, and prospectively pay the 
organizations a per person, or capitated, payment. In turn, the 
managed care organizations pay providers, such as hospitals and 
physicians, for services provided to Medicaid enrollees. States 
contract with managed care organizations to provide a comprehensive 
set of services to Medicaid beneficiaries; states may also contract 
with limited benefit plans to provide a defined set of services, such 
as mental health services. CMS reviews and approves states' plans to 
implement their Medicaid programs. 

Medicaid is an important source of mental health services for millions 
of vulnerable individuals. In 2009, an estimated 5.8 million adult 
Medicaid beneficiaries, or 30 percent of all adult Medicaid 
beneficiaries, were diagnosed with some type of mental illness. 
[Footnote 11] States that provide mental health services through 
limited benefit plans establish these delivery systems under Medicaid 
waivers. Sections 1115 and 1915(b) of the Social Security Act allow 
the Secretary of Health and Human Services to waive certain federal 
requirements, such as limitations on a state's ability to require 
certain beneficiaries to enroll in managed care.[Footnote 12] States 
that provide Medicaid benefits through managed care arrangements, 
including limited benefit plans, must comply with certain 
requirements, including those requiring states to establish procedures 
to monitor managed care program operations.[Footnote 13] Federal 
regulations require states to ensure that managed care organizations 
coordinate mental and physical health care services; however, states 
have the option to exempt limited benefit plans from these 
requirements.[Footnote 14] States seeking to provide Medicaid services 
through managed care waivers must submit an application to CMS and 
obtain approval. Medicaid managed care waivers approved under section 
1915(b) of the Social Security Act--the most common type of waiver 
states use to establish limited benefit plans to provide mental health 
services to beneficiaries--are typically authorized for a period of 
two years. At the end of the waiver period, the state can request an 
extension of the waiver or submit an application for a new waiver. 

Care coordination is broadly defined as the integration of patient 
care activities between two or more providers involved in a patient's 
care with the goal of facilitating the appropriate delivery of 
services. Activities to coordinate mental and physical health care 
services include sharing information--such as medical records, test 
and lab results, and prescribed medications--across providers and care 
delivery sites. States and limited benefit plans can implement 
specific care practices with the purpose of facilitating 
communications and the sharing of information. Care coordination is 
particularly important for Medicaid beneficiaries with mental 
illnesses because they are more likely to have other medical 
conditions requiring ongoing physical health care services than 
beneficiaries without mental illnesses. For example, in 2003, 14 
percent of all Medicaid beneficiaries had a costly medical condition, 
such as diabetes and heart disease; however, among adults who were 
receiving mental health services, 21 percent had such medical 
conditions.[Footnote 15] 

Enrollment, Payment, and Scope of Services Varied Across All 13 States 
Using Limited Benefit Plans for Mental Health Services: 

Across the 13 states that contracted with limited benefit plans to 
provide mental health services to adult Medicaid beneficiaries, the 
enrollment levels, total payments, and services provided varied. 
[Footnote 16] States can enroll different adult populations--such as 
individuals who are blind, disabled, or have developmental 
disabilities--in limited benefit plans, which could contribute to 
variation in the number of adults enrolled, as well as the level of 
capitated payments states made to these plans.[Footnote 17] State 
officials reported that about 4.4 million adult Medicaid beneficiaries 
were enrolled in limited benefit plans, about 48.6 percent of all 
adult Medicaid beneficiaries in the 13 states. The number of adults 
enrolled in these plans ranged from about 93,000 beneficiaries in 
Kansas to over 1.1 million beneficiaries in Pennsylvania. (See figure 
1.) Across these 13 states, the percentage of adult Medicaid 
beneficiaries enrolled in limited benefit plans ranged from about 10.7 
percent in Florida to about 93.0 percent in Colorado. (See appendix II 
for more information on enrollment in Medicaid and limited benefit 
plans in the 13 states.) 

Figure 1: Number of Adult Medicaid Beneficiaries and Number of Adult 
Medicaid Beneficiaries Enrolled in Limited Benefit Plans Providing 
Mental Health Services, Fiscal Year 2012: 

[Refer to PDF for image: horizontal bar graph] 

State: Pennsylvania; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 1,140,830; 
Number of adult Medicaid beneficiaries: 1,384,690. 

State: Arizona; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 780,049; 
Number of adult Medicaid beneficiaries: 905,958. 

State: Washington; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 541,225; 
Number of adult Medicaid beneficiaries: 693,719. 

State: Oregon; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 314,825; 
Number of adult Medicaid beneficiaries: 377,905. 

State: North Carolina; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 241,761; 
Number of adult Medicaid beneficiaries: 621,387. 

State: Colorado; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 235,847; 
Number of adult Medicaid beneficiaries: 253,623. 

State: Iowa; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 220,989; 
Number of adult Medicaid beneficiaries: 343,213. 

State: Florida; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 215,303; 
Number of adult Medicaid beneficiaries: 2,021,880. 

State: Massachusetts; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 210,833; 
Number of adult Medicaid beneficiaries: 832,855. 

State: New Mexico; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 155,820; 
Number of adult Medicaid beneficiaries: 235,294. 

State: Michigan; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 131,671; 
Number of adult Medicaid beneficiaries: 1,061,590. 

State: Utah; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 125,619; 
Number of adult Medicaid beneficiaries: 161,865. 

State: Kansas; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans: 92,938; 
Number of adult Medicaid beneficiaries: 177,449. 

Source: GAO analysis of state reported data. 

Note: Enrollment data are for unduplicated adult Medicaid 
beneficiaries--individuals 18 years and older--in fiscal year 2012. 
Beneficiaries who enrolled more than one time during the year are 
reported only once in the unduplicated total. 

[End of figure] 

Capitated payments to limited benefit plans providing mental health 
services to adult Medicaid beneficiaries also varied across the 13 
states in fiscal year 2012. State officials reported that capitated 
payments to these plans totaled about $5.6 billion, or about 9.0 
percent of total Medicaid payments for all adult beneficiaries in 
these 13 states. Capitated payments to these plans ranged from about 
$86.5 million in New Mexico to almost $2.0 billion in Michigan. As a 
share of total Medicaid payments for adult Medicaid beneficiaries, 
capitated payments to limited benefit plans providing mental health 
services ranged across the 13 states from 1.3 percent in Florida to 
21.9 percent in Michigan (see figure 2). (See appendix III for more 
information on Medicaid payments in the 13 states) 

Figure 2: Percent of Total Medicaid Payments to Limited Benefit Plans 
Providing Mental Health Services, Fiscal Year 2012: 

[Refer to PDF for image: horizontal bar graph] 

State: Michigan: 21.9%. 

State: Arizona: 15.6%. 

State: Pennsylvania: 9.9%. 

State: Utah: 9.4%. 

State: Oregon: 8.4%. 

State: Colorado: 5.7%. 

State: North Carolina: 5%. 

State: New Mexico: 4.9%. 

State: Kansas: 4.7%. 

State: Massachusetts: 4.6%. 

State: Iowa: 3.6%. 

State: Washington: 3.4%. 

State: Florida: 1.3%. 

Source: GAO analysis of state reported data. 

Note: Total Medicaid payments are for adult Medicaid beneficiaries--
individuals 18 years and older. Payments to limited benefit plans are 
capitation payments--a fixed dollar amount per adult Medicaid 
beneficiary per month. 

[End of figure] 

States also reported variations in the scope of services provided by 
limited benefit plans to adult Medicaid beneficiaries in fiscal year 
2012. Specifically, 3 states contracted with limited benefit plans to 
provide only mental health services, while 10 states contracted with 
limited benefit plans to provide both mental health services and 
services for substance use disorder. Two of these 10 states--Oregon 
and Utah--contracted with some plans to provide only mental health 
services and contracted with other plans to provide both mental health 
services and services for substance use disorders. (See table 1.) 

Table 1: Scope of Services Provided by Limited Benefit Plans by State, 
Fiscal Year 2012: 

State: Arizona; 
Contracted with plans to provide both mental health services and 
services for substance use disorders. 

State: Colorado; 
Contracted with plans to provide both mental health services and 
services for substance use disorders. 

State: Florida; 
Contracted with plans that provide only mental health services. 

State: Iowa; 
Contracted with plans to provide both mental health services and 
services for substance use disorders. 

State: Kansas; 
Contracted with plans that provide only mental health services. 

State: Massachusetts; 
Contracted with plans to provide both mental health services and 
services for substance use disorders. 

State: Michigan; 
Contracted with plans to provide both mental health services and 
services for substance use disorders. 

State: New Mexico; 
Contracted with plans to provide both mental health services and 
services for substance use disorders. 

State: North Carolina; 
Contracted with plans to provide both mental health services and 
services for substance use disorders. 

State: Oregon; 
Contracted with plans that provide only mental health services; 
Contracted with plans to provide both mental health services and 
services for substance use disorders. 

State: Pennsylvania; 
Contracted with plans to provide both mental health services and 
services for substance use disorders. 

State: Utah; 
Contracted with plans that provide only mental health services; 
Contracted with plans to provide both mental health services and 
services for substance use disorders. 

State: Washington; 
Contracted with plans that provide only mental health services. 

Source: GAO analysis of state reported data. 

Note: Scope of services limited benefit plans were contracted to 
provide care for adult beneficiaries--individuals 18 years and older. 

[End of table] 

Selected States Generally Took Three Steps to Facilitate Coordination 
of Care, and CMS Reviewed Waivers and Contracts: 

The four selected states we studied generally took three steps to 
facilitate the coordination of mental and physical health care 
services, but specific activities varied. CMS's efforts to facilitate 
the coordination of mental and physical health care services focused 
primarily on reviewing states' federal waiver documents and contracts 
with limited benefit plans. 

Four Selected States Took Steps to Facilitate the Coordination of 
Mental and Physical Health Care Services: 

The steps that selected states--Florida, Kansas, Michigan, and 
Washington--generally took to facilitate the coordination of mental 
and physical health care included (1) incorporating care coordination 
requirements in the contracts with limited benefit plans; (2) 
implementing additional steps to coordinate care; and (3) monitoring 
limited benefit plans' implementation of care coordination. 

Care Coordination Requirements in State Contracts with Plans: 

The four states' contracts with limited benefit plans included general 
provisions regarding the types of entities that health plans are 
required to coordinate with in order to manage beneficiaries' health 
care needs. Additionally, each state's contracts specified the 
particular coordination activities the limited benefit plans were 
required to perform. 

General Contractual Provisions on Coordination: 

All four states required limited benefit plans to coordinate mental 
and physical health services with a broad range of providers and other 
entities. Each state required its limited benefit plans to coordinate 
with physical health care providers and community organizations, 
mental health providers, and the state's Medicaid agency. 

* All four states required some coordination with physical health care 
providers and community organizations. For example, in Michigan, in 
addition to coordinating with beneficiaries' primary care providers, 
limited benefit plans were required to coordinate with public and 
private community agencies that provide social support and other non-
health care services to individuals with mental illnesses. 

* States' contracts also required limited benefit plans to coordinate 
with a wide range of mental health providers that were part of the 
plans' network of providers, including mental health providers and 
case managers that provide ancillary services. For example, Washington 
required its limited benefit plans to coordinate with social workers 
to ensure that they shared information on health care needs and 
services. 

* States also required health plans to coordinate with other state 
departments and agencies whose clients include Medicaid beneficiaries. 
For example, Florida required its limited benefit plans to have 
agreements with state agencies responsible for serving the homeless to 
ensure coordination and avoid duplication of services. In Kansas, the 
state required limited benefit plans to coordinate with other state 
agencies, along with local and regional agencies whose clients 
included Medicaid beneficiaries. Michigan required its limited benefit 
plans to coordinate with the criminal justice system, including 
police/sheriffs, court personnel, and attorneys. 

Specific Contractual Requirements for Coordination: 

All four states' contracts with limited benefit plans required the 
plans to undertake specific activities to facilitate coordination of 
mental and physical health care services. These required activities 
generally fell into the following categories: sharing information and 
establishing communications between providers and across care 
settings; identifying patients' mental and physical health care needs 
and creating individual care plans; and developing measures and 
collecting data on coordination of care. 

* All four states required limited benefit plans to implement 
mechanisms to share information or standardize communications between 
providers and across care settings. For example, contracts in Florida, 
Michigan, and Washington required limited benefit plans to develop 
written plans or agreements outlining when, and in some cases how, 
care will be coordinated between mental health, primary care, and 
other providers. Kansas' contract required all limited benefit plan 
network providers to request a standardized release of information 
form from each beneficiary to allow providers to coordinate with 
primary care physicians and other treatment team members. 

* All four states required limited benefit plans to identify 
beneficiaries' health care needs, including mental and physical health 
care needs; develop individual care plans for beneficiaries' to 
address all needs identified; and update these care plans on a regular 
basis. One part of the individual care plan development and updating 
process included coordinating with primary care and other providers as 
needed, and making appropriate referrals. For example, Washington's 
contract required limited benefit plans to create and then update 
these plans every 180 days, identify patient mental and physical 
health care needs, ensure coordination between systems that are 
meeting patients' needs, and require providers to make appropriate 
referrals to health care providers when medical concerns are 
identified. 

* Two of the four states required limited benefit plans to collect and 
submit data to monitor care coordination. For example, Kansas required 
limited benefit plans to collect data from network providers and 
enrollees to monitor care coordination; and Florida required limited 
benefit plans to collect information on follow-up services enrollees 
received within seven days of discharge from all inpatient facilities 
for a mental health diagnosis. 

Additional State Steps to Encourage Care Coordination: 

Officials from all four states reported taking additional steps beyond 
contract requirements to encourage coordination and further 
integration of mental and physical health care. For example, in 2012, 
officials from all four states reported that their state implemented 
Medicaid policies allowing providers to bill for two services, such as 
mental and physical health care services, in one day for the same 
beneficiary. In doing so, limited benefit plans can work to integrate 
and improve access to care by providing mental and physical health 
services at the same location and allowing both providers to receive 
reimbursement for services furnished on the same day. Since 2012, 
officials from two of the four states reported that they have taken 
steps to further integrate mental and physical health care services. 
Officials from Kansas reported that in January 2013 the state stopped 
providing mental health services through a limited benefit plan and 
implemented a comprehensive managed care arrangement providing both 
mental and physical health care services to Medicaid beneficiaries, 
and officials from Florida reported that the state is taking steps to 
implement similar arrangements in 2014. 

State Monitoring of Limited Benefit Plan Performance: 

During 2011 and 2012, all four states we studied conducted a variety 
of reviews that were either directly focused on the coordination of 
mental and physical health care services or assessed such coordination 
as part of broader reviews. States conducted monitoring through five 
different types of reviews, the use of which varied by state. 

* Desk reviews are state Medicaid agency evaluations of documents and 
reports that plans, including limited benefit plans, submit. States 
generally conduct these types of reviews at their Medicaid offices. 
All four states reported that they conduct some form of desk review of 
reports and data related to the coordination of mental and physical 
health care services received under limited benefit plans. The states 
did not issue reports on the findings of these desk reviews. 

* External quality reviews (EQR) are federally required reviews 
conducted by independent organizations, called External Quality Review 
Organizations (EQROs), with expertise in assessing the quality of and 
access to care provided by managed care plans. Federal law requires 
EQROs to annually review Medicaid managed care plans, including 
limited benefit plans that provide inpatient services.[Footnote 18] 
These reviews assess limited benefit plans' strengths and weaknesses 
with respect to quality, timeliness, and access to health care 
services provided to Medicaid beneficiaries. All three states in which 
limited benefit plans were subject to these reviews--Florida, 
Michigan, and Washington--had EQRs conducted that included an 
assessment, in either 2011 or 2012, of limited benefit plans' 
compliance with care coordination contract requirements.[Footnote 19] 
In Michigan, the EQR findings did not include any specific results on 
care coordination in 2011, but found that the state and limited 
benefit health plans were in compliance with managed care requirements 
and contractual agreements.[Footnote 20] In Washington, the EQR 
findings in 2011 questioned the effectiveness of one limited benefit 
plan's intervention to increase the quality of care coordination, 
including the validity of the methods used to assess care 
coordination. In Florida, officials reported that the EQR is conducted 
annually in conjunction with two process improvement projects. One 
limited benefit plan in this state participated in a project that 
examined the documentation of services in an effort to improve 
communication and coordination of services between physical and mental 
health providers in limited benefit plans. This project is still 
ongoing. 

* Internal onsite reviews are reviews conducted by the state Medicaid 
agency at providers or managed care plan offices, or at locations 
where Medicaid beneficiaries receive services. Three of the four 
states--Florida, Michigan, and Kansas--conducted onsite reviews during 
the 2011 through 2012 time period. Florida officials reported that the 
state conducted onsite reviews annually to evaluate limited benefit 
plans' administrative and clinical compliance, including care 
coordination. Some of these reviews identified needed improvements; 
for example, in a 2012 review of one limited benefit plan in Florida, 
the state found that the plan needed to establish a process for 
providing Medicaid beneficiaries immediate access to psychiatric 
services upon their release from a jail or juvenile detention facility 
to ensure prescribed medications were available. Michigan officials 
reported that their reviews occurred biennially and, in part, assessed 
limited benefit plans' capacity to coordinate physical and mental 
health services for Medicaid beneficiaries. Some of these reviews 
identified needed improvements; for example, in a 2011 review of one 
limited benefit plan, the state was unable to find evidence of 
communication and coordination between a psychiatric hospital and a 
Medicaid beneficiary's primary care physician or health plan and 
recommended that the limited benefit plan devise a coordination plan. 
In 2011 and 2012, Kansas conducted an onsite review of the one limited 
benefit plan that state contracted with to examine plan guidelines 
used to identify and authorize the coordination of care for 
beneficiaries with high needs, including those with certain mental 
health diagnoses. In regard to care coordination, the state found that 
the limited benefit plan met its contractual requirements and had an 
acceptable process to identify Medicaid beneficiaries with high 
physical and mental health needs, and provided these beneficiaries 
with ongoing care coordination between their mental health providers 
and other providers and entities delivering treatment and service. 
State reviewers also found that the plan had coordinated its 
activities with other social service, disability, and welfare systems, 
including the state's criminal justice and disability agencies. 

* Independent assessments are federally required reviews through which 
states operating Medicaid managed care programs under section 1915(b) 
waivers must evaluate and maintain data regarding the cost-
effectiveness of their programs, the effect of the programs on 
beneficiaries' access to services, and the quality of services 
provided under the program.[Footnote 21] At a minimum, a state is 
required to conduct an independent assessment for its first two waiver 
periods. Of the four states, Kansas was the only state required to 
conduct an independent assessment during the time period of our review 
because it began providing mental health services through a contract 
with a limited benefit plan under a waiver in 2007. Kansas' 2009 
assessment found that a small percentage of Medicaid beneficiaries 
enrolled in the limited benefit plan received care coordination, and 
recommended that the state should increase the share of beneficiaries 
receiving these services.[Footnote 22] The 2011 assessment found 
improvement in the state's care coordination. Specifically, the report 
noted that the state expanded and enhanced its care coordination 
activities in an effort to increase the share of Medicaid 
beneficiaries in the limited benefit plan whose care was coordinated. 

* Focused care coordination studies examine a state's coordination of 
mental health and physical health care services. Michigan was the only 
state to conduct a focused care coordination study of limited benefit 
plans during the time period of our review. The study, which was 
conducted by an independent organization under contract, examined 
Medicaid utilization patterns to assess whether care coordination 
occurred. While the report did not draw specific conclusions on 
whether care coordination occurred or make recommendations to the 
state, it did indicate that Medicaid beneficiaries with serious mental 
health diagnoses had more emergency room, ambulatory visits, and 
inpatient admissions than other groups. 

CMS Reviewed State Waiver Applications and Contracts with Limited 
Benefit Plans: 

GAO found that CMS did not take direct steps to facilitate the 
coordination of mental and physical health care services for adult 
Medicaid beneficiaries enrolled in limited benefit plans because its 
role is to provide oversight of, and technical assistance to, the 
states in carrying out their Medicaid programs. In its oversight role, 
the agency reviewed and approved state-submitted managed care waiver 
applications and contracts with limited benefit plans providing mental 
health services, some of which contain care coordination provisions. 
Federal regulations require managed care plans to coordinate mental 
and physical health care services and identify persons with special 
health care needs. However, states providing health care services 
through limited benefit plans may exempt these plans from these 
requirements.[Footnote 23] States requiring limited benefit plans to 
comply with these requirements must include these details in their 
waiver applications and assure that plans comply with these rules. CMS 
officials told us that the agency reviews the waiver application's 
care coordination provisions as part of its broader review of states' 
waiver applications. The officials added that CMS also reviews the 
results of EQRs of states' programs, and provides final agency 
approval for contracts between states and limited benefit plans. 
Beyond these activities, CMS officials indicated that their role was 
to provide technical assistance to states, as needed; for example, 
when states are designing their programs. 

CMS's regional offices also provided oversight of states' contracting 
with limited benefit plans; however, none of their activities directly 
assessed care coordination provided by limited benefit plans. In the 
four regional offices we studied, we found that the number and 
frequency of regional office reviews of limited benefit plans 
varied.[Footnote 24] Regional officials we spoke to cited several 
activities ranging from periodic managed care calls with states, to 
comprehensive and focused onsite and desk reviews to ensure limited 
benefit plans met all federal managed care requirements. Officials in 
one region explained that CMS generally conducted additional regional 
office reviews on limited benefit plans that were newer or raised 
special concerns. 

Agency Comments: 

The Department of Health and Human Services reviewed a draft of this 
report and provided technical comments, which we incorporated as 
appropriate. 

We are sending copies of this report to the Secretary of Health Human 
Services and other interested parties. In addition, the report is 
available at no charge on the GAO website at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-7114 or yocomc@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made major contributions 
to this report are listed in appendix IV. 

Signed by: 

Carolyn L. Yocom: 
Director, Health Care: 

[End of section] 

Appendix I: Summary of Selected States' Use of Limited Benefit Plans 
to Provide Mental Health Services, Fiscal Year 2012: 

Program characteristic: Year limited benefit plan was first 
implemented; 
Florida: 1996; 
Kansas: 2007; 
Michigan: 1998; 
Washington: 1993. 

Program characteristic: Number of contracts with limited benefit plans; 
Florida: 10; 
Kansas: 1; 
Michigan: 18; 
Washington: 13. 

Program characteristic: Scope of services that limited benefit plans 
were contracted to provide to adult Medicaid beneficiaries[A]; 
Florida: Mental health services; 
Kansas: Mental health services; 
Michigan: Mental health services and services for substance use 
disorder; 
Washington: Mental health services. 

Program characteristic: Number of adult Medicaid beneficiaries; 
Florida: 2,021,882; 
Kansas: 177,449; 
Michigan: 1,061,587; 
Washington: 693,719. 

Program characteristic: Number of adult Medicaid beneficiaries 
enrolled in limited benefit plans providing mental health services[B]; 
Florida: 215,303; 
Kansas: 92,938; 
Michigan: 131,671; 
Washington: 541,225. 

Program characteristic: Percent of adult Medicaid beneficiaries 
enrolled in limited benefit plans; 
Florida: 10.65%; 
Kansas: 52.37%; 
Michigan: 12.40%; 
Washington: 78.02%. 

Program characteristic: Number of adult Medicaid beneficiaries 
enrolled in limited benefit plans that received at least one service; 
Florida: 1996: 32,098; 
Kansas: 29,588; 
Michigan: 126,778; 
Washington: 70,060. 

Source: GAO analysis of CMS and state reported data. 

[A] Adult Medicaid beneficiaries are individuals 18 years and older. 

[B] States have flexibility in setting eligibility criteria for 
limited benefit plans providing mental health services. States can 
choose to enroll all Medicaid beneficiaries in limited benefit plans, 
or establish enrollment criteria for limited benefit plans and enroll 
those beneficiaries that meet such criteria. For example, in Michigan 
Medicaid beneficiaries seeking more than 20 outpatient visits to 
address their mental health needs are enrolled in limited benefit 
plans. 

[End of table] 

[End of section] 

Appendix II: Adults Enrolled in Medicaid and Limited Benefit Plans 
Providing Mental Health Services, Fiscal Year 2012: 

State: Arizona; 
Number of adult beneficiaries enrolled in Medicaid: 905,958; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 780,049; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 86.10%. 

State: Colorado; 
Number of adult beneficiaries enrolled in Medicaid: 253,623; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 235,847; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 92.99%. 

State: Florida; 
Number of adult beneficiaries enrolled in Medicaid: 2,021,882; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 215,303; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 10.65%. 

State: Iowa; 
Number of adult beneficiaries enrolled in Medicaid: 343,213; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 220,989; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 64.39%. 

State: Kansas; 
Number of adult beneficiaries enrolled in Medicaid: 177,449; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 92,938; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 52.37%. 

State: Massachusetts; 
Number of adult beneficiaries enrolled in Medicaid: 832,855; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 210,833; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 25.31%. 

State: Michigan; 
Number of adult beneficiaries enrolled in Medicaid: 1,061,587; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 131,671; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 12.40%. 

State: New Mexico; 
Number of adult beneficiaries enrolled in Medicaid: 235,294; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 155,820; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 66.22%. 

State: North Carolina; 
Number of adult beneficiaries enrolled in Medicaid: 621,387; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 241,761; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 38.91%. 

State: Oregon; 
Number of adult beneficiaries enrolled in Medicaid: 337,905; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 314,825; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 83.31%. 

State: Pennsylvania; 
Number of adult beneficiaries enrolled in Medicaid: 1,384,689; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 1,140,832; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 82.39%. 

State: Utah; 
Number of adult beneficiaries enrolled in Medicaid: 161,865; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 125,619; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 77.61%. 

State: Washington; 
Number of adult beneficiaries enrolled in Medicaid: 693,719; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 541,225; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 78.02%. 

State: Total; 
Number of adult beneficiaries enrolled in Medicaid: 9,071,426; 
Number of adult Medicaid beneficiaries enrolled in limited benefit 
plans providing mental health services: 4,407,712; 
Beneficiaries enrolled in limited benefit plans providing mental 
health services as a share of total adult beneficiaries enrolled in 
Medicaid (percent): 48.59%. 

Source: GAO analysis of state reported data. 

Note: Enrollment data are for unduplicated adult Medicaid 
beneficiaries--individuals 18 years and older--in fiscal year 2012. 
Beneficiaries who enrolled more than one time during the year are 
reported only once in the unduplicated total. States can enroll 
different adult populations--such as individuals who are blind, 
disabled, or have developmental disabilities--in limited benefit 
plans, which could contribute to variation in the number of adults 
enrolled in these plans. 

[End of table] 

[End of section] 

Appendix III: Total Medicaid Payments and Capitated Payments to 
Limited Benefit Plans for Adults, Fiscal Year 2012: 

State: Arizona; 
Total Medicaid payments: $5,247,777,549; 
Total capitated payments to limited benefit plans providing mental 
health services: $818,480,488; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 
15.60%. 

State: Colorado; 
Total Medicaid payments: $2,639,786,248; 
Total capitated payments to limited benefit plans providing mental 
health services: $151,333,340; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 5.73%. 

State: Florida; 
Total Medicaid payments: $6,885,414,675; 
Total capitated payments to limited benefit plans providing mental 
health services: $90,850,448; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 1.32%. 

State: Iowa; 
Total Medicaid payments: $2,519,319,401; 
Total capitated payments to limited benefit plans providing mental 
health services: $90,332,042; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 3.59%. 

State: Kansas; 
Total Medicaid payments: $1,830,720,329; 
Total capitated payments to limited benefit plans providing mental 
health services: $86,756,599; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 4.74%. 

State: Massachusetts; 
Total Medicaid payments: $6,645,146,452; 
Total capitated payments to limited benefit plans providing mental 
health services: $308,656,503; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 4.64%. 

State: Michigan; 
Total Medicaid payments: $9,017,361,836; 
Total capitated payments to limited benefit plans providing mental 
health services: $1,975,853,600; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 
21.91%. 

State: New Mexico; 
Total Medicaid payments: $1,771,298,790; 
Total capitated payments to limited benefit plans providing mental 
health services: $86,483,081; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 4.88%. 

State: North Carolina; 
Total Medicaid payments: $6,071,247,483; 
Total capitated payments to limited benefit plans providing mental 
health services: $302,281,898; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 4.98%. 

State: Oregon; 
Total Medicaid payments: $1,818,946,739; 
Total capitated payments to limited benefit plans providing mental 
health services: $152,034,715; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 8.36%. 

State: Pennsylvania; 
Total Medicaid payments: $13,145,125,395; 
Total capitated payments to limited benefit plans providing mental 
health services: $1,295,669,270; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 9.86%. 

State: Utah; 
Total Medicaid payments: $1,134,377,096; 
Total capitated payments to limited benefit plans providing mental 
health services: $106,341,638; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 9.37%. 

State: Washington; 
Total Medicaid payments: $3,020,009,857; 
Total capitated payments to limited benefit plans providing mental 
health services: $103,594,864; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 3.43%. 

State: Total; 
Total Medicaid payments: $61,746,531,849; 
Total capitated payments to limited benefit plans providing mental 
health services: $5,568,668,486; 
Total capitated payments to limited benefit plans providing mental 
health services as a share of total Medicaid payments (percent): 9.02%. 

Source: GAO analysis of state reported data. 

Note: Total Medicaid payments and capitated payments to limited 
benefit plans are for adult beneficiaries--individuals 18 years and 
older. States can enroll different adult populations--such as 
individuals who are blind, disabled, or have developmental 
disabilities--in limited benefit plans, which could contribute to 
variation in the level of capitated payments made to these plans. 

[End of table] 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Carolyn L. Yocom, (202) 512-7114 or yocomc@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Tim Bushfield, Assistant 
Director; Shaunessye Curry; Kristin Ekelund; Sandra George; and Drew 
Long made key contributions to this report. 

[End of section] 

Footnotes: 

[1] Medicaid enrollment is for 2010, see Centers for Medicare & 
Medicaid Services, Medicaid Enrollments and Payments, USA, FY 2006-
2010, Medicaid Statistical Information System and Medicaid Financial 
Management Report, accessed June 19, 2013, [hyperlink, 
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/By-
State.html]. 

[2] The Patient Protection and Affordable Care Act required all states 
to expand eligibility for Medicaid to nonelderly individuals whose 
income does not exceed 138 percent of the federal poverty level by 
January 1, 2014; however, the Supreme Court has ruled that this 
expansion is optional. Pub. L. No. 111-148, § 2001(a)(1),124 Stat. 
119, 271 (Mar. 23, 2010); National Federation of Independent Business 
v. Sebelius, 132 S. Ct. 2566 (2012). See Substance Abuse and Mental 
Health Services Administration, National Expenditures for Mental 
health Services & Substance Abuse Treatment, 1986-2009, HHS 
Publication No. SMA-13-4740 (Rockville, Md.: 2013). 

[3] See Congressional Budget Office, Estimates for Insurance Coverage 
Provisions of the Affordable Care Act Updated for the Recent Supreme 
Court Decision (Washington, D.C.: July 2012). 

[4] We found that states frequently reported having difficulty 
ensuring a sufficient number of Medicaid providers for psychiatric 
services. See GAO, Medicaid: States Made Multiple Program Changes, and 
Beneficiaries Generally Reported Access Comparable to Private 
Insurance, [hyperlink, http://www.gao.gov/products/GAO-13-55] 
(Washington, D.C.: Nov. 15, 2012). 

[5] For purposes of this report, we define "limited benefit plans" as 
health plans that contract with states on a capitated basis to provide 
mental health services to adult Medicaid beneficiaries, which we 
define as individuals 18 years and older. 

[6] See GAO, Medicaid: States Use of Managed Care, [hyperlink, 
http://www.gao.gov/products/GAO-12-872R] (Washington, D.C.: Aug. 17, 
2012). 

[7] We asked the 13 states to provide enrollment and payment data for 
adult beneficiaries in limited benefit health plans providing mental 
health services. We did not request enrollment and payment data 
separately for the different adult population groups enrolled in these 
plans, such as individuals who are aged, blind, disabled, or have 
developmental disabilities. 

[8] Centers for Medicare & Medicaid Services, Medicaid Managed Care 
Enrollment Report: Summary Statistics As of July 1, 2011 (Baltimore, 
Maryland). 

[9] States seeking to provide mental health services through limited 
benefit plans may do so by obtaining a waiver of certain Medicaid 
requirements under sections 1915(b) or 1115 of the Social Security 
Act. States seeking to provide such services under a waiver must 
submit an application to CMS for approval. 

[10] Mandatory Medicaid benefits include, for example, inpatient 
hospital and physician services which can encompass the delivery of 
mental health services. Federal law does not contain explicit 
provisions concerning the exact types of mental health services that 
can be provided, but all state Medicaid programs provide some mental 
health services to beneficiaries. 

[11] Estimates based on special tabulation from the 2009 National 
Survey on Drug Use and Health provided by Substance Abuse and Mental 
Health Services Administration, September 2013. 

[12] 42 U.S.C. §§ 1315(a), 1396n(b). 

[13] Federal requirements describe two types of limited benefit plans: 
prepaid inpatient health plans (PIHPs) and prepaid ambulatory health 
plans (PAHPs). In general, PIHPs provide inpatient and outpatient 
services, whereas PAHPs provide ambulatory services. See 42 CFR pt. 
438. 

[14] 42 C.F.R. § 438.208(a)(2). None of the four states we reviewed 
exempted limited benefit plans from this requirement. 

[15] See Substance Abuse and Mental Health Services Administration, 
Mental Health and Substance Abuse Services in Medicaid, 2003: Charts 
and State Tables, HHS Publication No. (SMA) 10-4608 (Rockville, Md.: 
2010). 

[16] We collected data from the 13 states--Arizona, Colorado, Florida, 
Iowa, Kansas, Massachusetts, Michigan, New Mexico, North Carolina, 
Oregon, Pennsylvania, Utah, and Washington--that contracted with 
limited benefit plans to provide mental health services to adult 
Medicaid beneficiaries--individuals 18 years and older. 

[17] States also have flexibility in setting eligibility criteria for 
limited benefit plans providing mental health services. For example, a 
state can choose to enroll all Medicaid beneficiaries in limited 
benefit plans, or establish enrollment criteria for limited benefit 
plans and enroll those beneficiaries that meet such criteria. 

[18] Federal law requires states contracting with managed care 
organizations and PIHPs to ensure these entities undergo an annual EQR 
to monitor compliance with certain managed care standards and 
requirements. PAHPs are exempt from this requirement. 42 U.S.C. § 
1396u-2(c)(2); 42 C.F.R. § 438.350. 

[19] Kansas provided mental health services through a PAHP and was 
exempt from EQR requirements. 

[20] Michigan's contractor did not conduct any compliance monitoring 
activities during the 2010-2011 reporting period. This report 
presented a summary of previously reported results for 2009-2010 
compliance monitoring reviews. 

[21] 42 C.F.R. § 431.55. Centers for Medicare & Medicaid Services, 
Independent Assessment Requirement for Section 1915(b) Waiver 
Programs: Guidance to States (Dec. 22, 1998). 

[22] The scope of our study included fiscal years 2011 and 2012. 
However, we collected and reviewed Kansas' 2009 assessment, because 
the 2011 assessment followed-up on findings from the earlier 
assessment. 

[23] See 42 U.S.C. § 438.208(a)(2). None of the four states we 
reviewed exempted limited benefit plans from this requirement. 

[24] The number and frequency of regional office reviews varied based 
upon the number of limited benefit plan contracts in each state and 
whether the states utilized a standard contract across plans, in which 
case a regional office may have only reviewed the standard contract 
once. 

[End of section] 

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