A Primer on Behavioral Health Organizations and Health Homes

August 25, 2011

A Primer on Behavioral Health Organizations and Health Homes

ACL has been getting a lot of questions about Behavioral Health Organizations (BHOs), Health Homes (HHs) and managed care.

This is just a primer to answer some of the most basic, frequently asked questions. If you are new to trying to figure this all out, please take some quiet time to read through this and to explore the Department of Heath website on Health Homes http://www.health.ny.gov/health_care/medicaid/program/medicaid_health_homes/


Health Homes (HHs) are a new program that will provide care coordination to high cost Medicaid enrollees.
• Payment will be on a per member per month basis and TCM (ICM, SCM, BCM) will be integrated into this new system over the next 3 years.
• The highest cost Medicaid enrollees will be auto-enrolled in HHs. They may opt out. DOH will auto-enroll people into HHs where they already have a relationship with the HH or the providers in the HH network, particularly TCM.
• HH applications are due October 3 and will be chosen by November 1. If there are not enough HH applications, new application deadlines will be rolled out. If HH applications overlap geographically or are contiguous, DOH will send them back and ask providers to work together to form fewer, larger HHs.
• There may be many HHs in a region, however, DOH is looking to contract with robust and geographically large health homes.
• The draft rates have been posted on the Health Home website. They are considerably lower than TCM rates. It looks as if they were created with economies of scale in mind.
• All providers of mental health, health and housing are being encouraged to join HH networks. The most robust HHs will have mental health, chemical and substance addiction, medical, general and psychiatric hospital, and social support services, including housing. .
o Providers can be part of more than one health home (unless, of course, there is only one in your area);
o Service in the HH networks are both Medicaid and non-Medicaid services;
o Providers should not enter into exclusive arrangements with one HH. Also, housing providers should not guarantee admission to a bed.
• HHs are really referral sources. For housing, we will see whether or not the HHs will be required to refer through SPOA. If they must, not much will change for most housing providers in the state.

BHOs – Two Phases –
• PHASE I: Two years –Interim BHOs, will monitor and track admissions, discharges, re-admissions, outpatient follow-up and they will evaluate providers on these measures only. The application date has passed – the successful bidders will be announced in the next week or so. They are expected to begin operations by October 1 – a very aggressive time-line.
• PHASE II: Third Year - All Medicaid enrollees that have previously been carved out of Medicaid managed care will be enrolled in some form of managed care, i.e. Phase II Behavioral Health Organizations (Phase II BHO) or Special Needs Plans (SNP) that bear financial risk. The Interim BHOs may become the Phase II BHOs or SNPs – but that is not a given – the Phase II BHOs or SNPs may be other companies. If the interim BHOs do not become the managed care entities, it is not clear what happens to them in Phase II. At this time, housing is expected to be carved out – it is not a typical managed care service, so, housing will continue to be licensed and financed as it is now.

We think that the demand for housing will increase in this new environment as HHs and BHOs and SNPs look to decrease Medicaid costs associated with hospitalizations and emergency rooms – housing is the best solutions to bend that cost curve. So housing providers may deal with managed care entities looking for stable housing.

We also expect that there will be change down the road as OMH continues to explore ways to separate Medicaid service dollars from the sites. This requires agreement with the federal government.

Category: ACL Updates