Children's mental health services in fee-for-service Medicaid

Health Care Financing Review, Fall, 2004 by Mary Jo Larson, Kay Miller, Shyamal Sharma, Ronald Manderscheid

INTRODUCTION

Mental health conditions, over the span of a lifetime, can be very disabling--the combined burden of mental health and substance use disease, measured in terms of disability-adjusted life years, is reported to be higher than that from all cardiovascular conditions in 1990 (Murray and Lopez, 1996). An examination of costs of chronic conditions in a Medicaid population found costs related to certain mental illnesses to be the highest (Garis and Farmer, 2002). While the importance of mental health disorders is established, the impact of these disorders on health services utilization, particularly among children, is understudied (New Freedom Commission on Mental Health, 2003; National Institute of Mental Health, 1998; U.S. Department of Health and Human Services, 2001; U.S. Public Health Service, 2000). National expenditure data in 1997 found 13 percent of all MH/SA expenditures were for children (age 0-17), and the distribution of spending on children, compared to other age groups, was more likely to be on specialty mental health providers (Harwood et al., 2003). Medicaid is one important source of payment for MH/SA care for children in low income families; an estimated 24 percent of total mental health costs for all U.S. children were covered by Medicaid in 1998 (Sturm et al., 2000). Medicaid also pays for more supportive, home-based services than other types of insurance (Ringel and Sturm, 2001; Stroul et al., 1998).

Mental health problems among children and adolescents affect an estimated 10 to 20 percent of children age 9-13, and rates of treatment appear to be increasing, even among very young children age 2-4 (Friedman et al., 1998; Howell et al., 2000; Kelleher et al., 2000; Pastor and Reuben, 2002; Perrin et al., 1999, Rappley et al., 1999; Zito et al., 2000; 2002). Evidence suggests that the overall rate of diagnosable MH/SA disorders is comparable across racial/ethnic subgroups, although the distribution of diagnoses may differ. Yet, numerous studies document that unmet treatment need is greater among black, Hispanic, and other racial/ethnic groups than white children (Chow, Jaffee, and Snowden, 2003; Kataoka, Zang, and Wells, 2002; Ringel and Sturm, 2001; Sturm et al., 2003; U.S. Department of Health and Human Services, 2001; Wells et al., 2001). Zito and colleagues (1997; 1998; and 2003) have consistently found differences in prescribing patterns across geographic areas and racial/ethnic groups, with black youth distinctly less likely to receive psychotropic medication as a part of treatment than white youth. Sturm and colleagues (2003) observe that national averages on unmet MH/SA needs obscure large variation between States.

Children in foster care, a small portion of all Medicaid children, but a particularly vulnerable group, are more likely than other children to receive MH/SA care (DosReis, et al., 2001; Halfon et al., 1992; Harman, Childs, and Kelleher, 2000; Leslie at al., 2000). A three-State study found MH/SA treatment rates for this high-risk group varied substantially across States, from 23 to 38 percent, exceeding even the high utilization rates among disabled children (Rosenbach, Lewis, and Quinn, 2000). This is consistent with another study of Medicaid children where the majority of the MH/SA high-cost group was eligible for Medicaid through child-related categories rather than disability (Buck, Teich, and Miller, 2003). These disparities in utilization trends by geographic area, race/ethnicity, and reason for enrollment may portend differences in all types of mental health service utilization, demonstrating the importance of studying additional individual State patterns (Buck, 1997; Buck, Teich, and Miller, 2003; Dougherty Management Associates, 2003; Rosenbach, Lewis, and Quinn, 2000).

In this article, we present updated analyses of annual Medicaid service use and payments for two groups of children and adolescents in all eligibility categories: those with treated MH/SA conditions during the year (MH/SA claimants), and a comparison group without such conditions. We compare use and costs of selected MH/SA services for racial/ethnic subgroups for four States. These data pre-date many of the State health care reform initiatives, and thus provide important data for a baseline period.

METHODS

Data Sources

This study presents analysis from data files constructed by the Medicare, Medicaid, and Managed Care Analysis (MMMCA) study funded by the CMHS (Larson et al., 1998; Medstat Group, 2001). Medicaid analysis files were derived from the State Medicaid Research Files (SMRF). SMRF data provide paid claims for all Medicaid paid services as well as eligibility and demographic information.

During this period encounter data from managed care plans were incomplete in virtually all States, a limitation affecting all Medicaid claims studies in the 1990s. Thus, analysis is limited to enrollees in the fee-for-service (FFS) Medicaid Programs. To increase the robustness of the Medicaid estimates, we analyzed four States from SMRF (1993 data from Michigan, New Jersey, and Washington, and 1994 data from Pennsylvania). Data from all Medicaid enrolled children age 2-19 at the end of the year were selected for analysis.