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APHA Scientific Session and Event Listing

Marisa Domino, PhD, Department of Health Policy and Administration, University of North Carolina at Chapel Hill, CB #7411, McGavran-Greenberg Building, Chapel Hill, NC 27599-7411, 919-966-3891, mdomino@email.unc.edu

Purpose: Research has shown a relationship between case-rate payments and a decrease in the utilization of mental health services over fee-for-service alternatives; however, the level of case-rate payment may also affect assignment of severity level, which may have independent effects on service use. This has not been previously studied. The purpose of this study is to examine the effect that changes in case-rate payments used to pay for publicly funded mental health care have on severity determination and service use.

Methods: Individual-level data are used to examine how changes in case-rate payments to mental health providers over a 3-year period (1994 – 1996) in King County, Washington affect the probability that consumers of mental health services are classified in one of six severity categories during their first month in the capitated program and the number of services received per month as a function of the monthly case-rate payment.

Results: Increases in case-rate payment both increase the probability of classifying individuals at higher severity levels and increase the number of services used in four of the six severity categories. A one dollar increase in the daily case-rate is associated with between 0.12 and 0.46 more mental health visits per month.

Conclusions: Provider payment mechanisms can influence treatments received and assessment of severity by at-risk providers has the same incentive problems noted decades earlier in the Medicare DRG literature. Further research should examine the welfare implications of the changes in treatment rates as a function of the capitated payment rates.

Learning Objectives:

• At the conclusion of the session, the participant in this session will be able to discuss the effect that changes in case-rate payments used to pay for publicly funded mental health care have on severity determination and service use for persons with severe mental illness.

Keywords: Mental Health Services, Mental Illness

Presenting author's disclosure statement:

Any relevant financial relationships? No