Children’s Mental Health System in Oregon – Past, Present and Future

Summary by Mark McKechnie, MSW
Juvenile Rights Project, Inc.
June 11, 2004

The Oregon Health Plan covers over 20% of Oregon’s children (i). Children living in poverty or near poverty, children with a disability and children in foster care are eligible. Most are now enrolled in managed mental health care organizations (MHOs). 28,356 children received OHP-covered mental health services in 2002-03. The Oregon Department of Human Services provides an overview on their web site of the development of the Oregon Health Plan, managed care and the children’s mental health system. Key passages are quoted here in brief:

“Beginning February 1994, Oregon's Medicaid Authority began contracting physical health service delivery to managed care organizations and paying for services on a prepaid, capitated basis. Administered in this manner, providers no longer have the incentive to increase revenues by delivering costly and inappropriate services… In July 1995, mental health services were added to the Oregon Health Plan benefit package for contractors providing coverage in 20 of Oregon's 36 counties. In January 1997, the Division released a Request for Proposals to provide capitated mental health services on a statewide basis under the Oregon Health Plan. As of July 1, 1997, the Oregon Health Plan will include an expanded mental health benefit that will cover all Oregon Health Plan eligibles. Beginning October 1997, services will be provided [sic] through managed mental health organizations statewide…. From 1987 to 1992, Oregon received funds through the federal Child and Adolescent Service System Program (CASSP) to design and implement a system of care for children with mental health treatment needs. The program provided a set of values and principles, including early intervention, family involvement, and minimal restriction of freedom, to guide system development.” (ii)

While the intent in 1995-1997 was to fund both adult and children’s mental health services through capitated managed mental health plans which would be responsible for delivering medically appropriate and cost-effective services to their enrolled members, the children’s mental health system has not yet made that transition.

Due to a fear by providers, legislators and others that managed care companies would try to cut costs at the expense of appropriate care, the state mental health office, now OMHAS, divided the children’s system and children’s mental health expenditures between the managed care plans and “carved out” funds to pay for the most expensive services: day treatment, residential treatment and state hospital care. The carved out funds pay for state hospital care and are also contracted with private, non-profit day and residential treatment providers; funds for these three services account for 48% of all OHP children’s mental health expenditures (iii). In the 2001-2003 biennium, these three services were provided to 5.29% of the children receiving OHP mental health services. (iv).

While this carving up of expenditures was originally intended to be a transitional phase as the children’s mental health services moved into a capitated managed mental health system, the transition has lasted for nine years so far. And the carve out from managed care may have produced as many problems as it was intended to prevent. Since only 45% of the OHP funds for children (v) are spent on outpatient services, which serve 94% of the consumers (26,654 children in 2003-04), the resources are too limited to provide sufficient incentives to develop the kind of individualized, strengths-based, family-centered and community-based services that the state envisioned during the 1987-1992 CASSP project.

Evidence-based children’s mental health practices, which are consistent with the CASSP values, have shown that children with significant mental, emotional and behavioral disorders and their families can often be served more effectively and at a lower cost with intensive community based services, which allow children to live in their own homes, in specialized foster homes or in other community settings, rather than in restrictive (vi) therapeutic school or inpatient residential or hospital settings. Evidence-based and promising practices include: continuous care coordination, family-driven plans of care, intensive home and community based mental health interventions (vii), treatment foster care (viii), , use of natural community supports and other intensive, community-based mental health services (ix).

These types of services are largely unavailable to Oregon’s children. With the funding carve-out and the split in responsibility between the managed care plans, the state and private providers, there is little incentive or accountability to provide intensive community-based services when appropriate. The result is that children who might be able to stay at home (x) often have to enter restrictive facility-based day or residential treatment programs because their needs exceed the scope of traditional outpatient services. The Oregon Medical Professional Review Organization (OMPRO) reported on the levels of service indicated for children admitted to and discharged from inpatient psychiatric residential facilities. Of the children admitted to residential facilities, the appropriate level of care was:

• Outpatient services for 4% of children admitted to inpatient care.
  
• Intensive outpatient services for 20% of children admitted to inpatient care.
  
• Specialized foster care for 34% of children admitted to inpatient care. (xi)

  
  

Thus, only 43% of children admitted to inpatient psychiatric residential treatment programs in 2002 actually needed that level of care or a more restrictive level of care (i.e., hospital care), according to the OMPRO review.

The average length of stay for all children in residential treatment in 2002-2003 was 283.33 days. The average length of stay, broken out by provider, ranged from 152.39 days to 526.73 days. 283 children were discharged during that time. The OMPRO review found that most children discharged from these psychiatric residential treatment programs would still require significant support and treatment for their mental and emotional disorders post-discharge. The indicated levels of after-care for children discharged from psychiatric residential treatment in 2002 were:

• Outpatient services for 32%.
  
• Intensive outpatient services for 51%
  
• Specialized foster care for 10%.
  
• The assessments indicated that further residential or hospital services were indicated upon discharge for the remaining 17%.
  

A budget note which would mandate the development of intensive community-based mental health services was drafted with substantial input from child advocates, family advocates, mental health providers and government officials. The Children’s Mental Health Budget Note passed by the Oregon Legislature in 2003 was intended to fundamentally change and substantially improve the way that Oregon Health Plan mental health services are delivered throughout the state. Advocates for children and their families agree that the current system is fundamentally flawed and has failed to produce flexible, individualized, culturally appropriate and responsive mental health services.

Starting in October 2003, the Office of Mental Health and Addictions Services convened a group of stakeholders to plan the transition of to a new system which integrates funding into the local and regional managed care organizations and requires a substantial increase in the availability of individualized, intensive community-based services for children with significant emotional and mental disorders and their families and, consequently, a decrease the use of institutional care.

This work continues today, and implementation of these significant system changes are scheduled to begin January 1, 2005. The ultimate goal of the advocacy effort is to establish a more comprehensive continuum of services in which the local and regional MHOs will have the resources and the incentive to provide appropriate care for their members, and they will be the entities accountable to meet children’s needs and their families’ needs. The stakeholder group is working on clear, specific contract requirements and performance benchmarks to help ensure that needed services are developed and that they are available in a timely manner to children and families throughout the state of Oregon. These contracts will allow the State, consumers and the public to hold managed care plans accountable for delivering adequate and appropriate services to meet the needs of children covered by the Oregon Health Plan.

Helpful Links

Office of Mental Health and Addictions Services, Oregon DHS

http://www.oregon.gov/DHS/mentalhealth/index.shtml

Oregon's Children's Mental Health System Change Initiative

http://www.oregon.gov/DHS/mentalhealth/child-mh-soc-in-plan-grp/main.shtml

OMHAS Publications and Reports

http://www.oregon.gov/DHS/mentalhealth/publications/main.shtml

Community Mental Health Programs in Oregon

http://www.oregon.gov/DHS/mentalhealth/cmh-programs.shtm

Oregon Health Plan’s Managed Mental Health Organizations (MHO)

http://www.oregon.gov/DHS/mentalhealth/mho/mho.list.shtml

Mental Health: A Report of the Surgeon General (1999) Chapter 3, Children and Mental Health

http://www.surgeongeneral.gov/library/mentalhealth/chapter3/sec7.html#newer

Evidence-Based Practices in Mental Health Services for Foster Youth

http://www.cimh.org/downloads/Fostercaremanual.pdf

Bazelon Center for Mental Health Law

http://www.bazelon.org/

Bazelon Center -- Olmstead v. L.C. On-Line Resource Center

http://www.bazelon.org/issues/disabilityrights/resources/olmstead/index.htm

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(i). 196,626 Oregon children in October 2003.
(ii). Office of Mental Health and Addictions Services, Oregon Department of Human Services, “History of Public Mental Health in Oregon,” http://www.dhs.state.or.us/mentalhealth/publications/history.htm.
(iii). $97,600,000 in the 2001-2003 biennium.
(iv). Approximately 1,500 children received residential, day and/or state hospital treatment services in 2002-2003.
(v). $88,000,000 in the 2001-2003 biennium.
(vi). “Restrictiveness” of mental health services means that services are delivered in a setting that removes the child from the home and/or community and restricts the child’s freedom and participation in normative home and community life. Additionally, “restrictive” school placements, according to the Individuals with Disabilities Education Act are those where a student’s contact with non-disabled peers is limited. Thus, the most restrictive school placements involve no contact between children with disabilities and those without disabilities.
(vii). E.g., the now-defunct Multnomah Partners Project, Indiana’s DAWN Project, Wisconsin’s Wraparound Milwaukee, Catholic Community Services of Western Washington’s Family Preservation System, etc.
(viii). E.g., Eugene’s Oregon Social Learning Center.
(ix).Other evidence based practices involving intensive home-based intervention and case management for youth with more serious behavior problems include Multi-Systemic Therapy and Functional Family Therapy
(x). Including parents’ or relatives’ homes, as well as foster or adoptive homes.
(xi). Oregon Medical Professional Review Organization, 2002 Annual Report.

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