Integrated Managed Care Organizations Fail to Outperform Carve-Outs in Behavioral Health Access

Access to and utilization of services was not better at integrated managed care organizations – Medicaid plans that do not carve out behavioral health services – compared to other models.

That’s according to a new study published in JAMA, which analyzed claims-based measures of utilization, health-related outcomes, rates of arrests, employment and homelessness.

Historically, Medicaid managed care organizations (MCOs) have carved out behavioral health services. This meant patients would get behavioral health benefits coverage through a different plan. However, in recent years, states have pushed to integrate behavioral and physical health coverage.


In the study, which used a cohort of 145,185 individuals ages 13 to 64, researchers did not find an association with “changes in claims-based measures of utilization and quality” between integrated financial and carve-out models.

For individuals with serious mental illness (SMI) the number of outpatient behavioral health visits averaged 805.6 visits per 1000 member months in carve-out programs. After the integrated managed care model, that number fell by 33.9 days. However, that number was not statistically significant.

This could mean state Medicaid programs need additional measures to boost behavioral health access and quality rather than just integrated financial models.


“States aiming for clinical integration may need to combine financial integration with investments in workforce recruitment and training and strengthen contracting and data analytics expertise for performance monitoring and oversight,” researchers wrote.

Still, moving away from a carve-out system has been a top priority for states and payers over the last few years as stakeholders move towards more value-based care models.

“We can eliminate the carve-outs,” Dr. Katherine Knutson, former senior vice president at UnitedHealth Group Inc. (NYSE: UNH) and CEO of Optum Behavioral Care, said at the BHB’s 2022 event VALUE. “That is the work that we’re doing. We’re pushing very hard at [UnitedHealth] with a lot of promising models to really move forward with a total cost of care approach.”

While the health care industry as a whole is increasingly moving towards financially integrated models, some states are holding out. For example, in Pennsylvania, behavioral health is a carve-out benefit.

The model has had some recent success with a more localized approach. In Pennsylvania, Medicaid behavioral health benefits are funded through and managed via counties that contract with behavioral health managed care organizations. These counties also manage social support programs, like housing services.

“There was a recognition early on that people with serious mental illness and substance use disorders … are often overly represented in the human service systems like housing, criminal justice, child welfare,”  Dr. Matthew Hurford, president of Community Care Behavioral Health Organization and vice president of behavioral health for UPMC Insurance Services, previously BHB. “Since many of those services are managed at the county level in Pennsylvania, it made sense for the behavioral health Medicaid funding also to be managed at the county level.”

UPMC Insurance Services is owned and operated by the University of Pittsburgh Medical Center. It covers 4.5 million members and provides commercial products for groups and individuals.

Companies featured in this article: