Position Statements

AACP Position Paper on Standards of Quality Management in Implementing Public Sector Managed Care Systems Introduction

The introduction of managed care into mental health delivery systems has represented a dramatic transformation of the organization and payment methodology for mental health services. In the private sector, managed care initiatives have offered the promise of controlling escalating costs without compromising quality. The perception of success in the private sector has led to increasing pressure to develop managed care initiatives in the public sector.

The emergence of public sector managed care (PSMC) offers the opportunity for creativity and flexibility in program and system design, as well as the potential for more efficient utilization of scarce public funds. At the same time, PSMC may pose great dangers. Unlike the private sector, public mental health and substance abuse expenditures, while at times inefficient, have never been excessive. Unfortunately, public payers, struggling with diminishing budgets, may view PSMC as an opportunity to reduce already inadequate funding without sufficient guarantees of quality. This can seriously jeopardize clinical outcomes for public patients, who are relatively powerless to voice their concerns or have much influence on policy or funding decisions. This can be compounded by the willingness of managed care organizations, (MCOs), seeking new markets, to accept and implement underfunded contracts. In some states and regions these negative outcomes have already occurred or are beginning to be realized.

The AACP supports the development of PSMC, but only as a method for more efficient utilization of scarce resources to improve the quality and outcome of care. However, currently available methodologies for measuring performance of managed behavioral health systems (e.g. PSMC, HEDIS, JCAHO-ORYX) are woefully inadequate. We believe more comprehensive quality management systems are a necessity (e.g. ACMHA 1997 Final Report, Santa Fe Summit on Behavioral Health, "Preserving Quality and Value in the Managed Care Equation"). We have carefully examined numerous PSMC initiatives and have identified key variables that contribute to or detract from quality outcomes. Based on this analysis, we have developed the following standards for quality management in PSMC systems. These standards are not simply statements of principle. They are intended to be measurable indicators by which any individual or entity can determine whether an adequate structure for quality management is in place prior to the implementation of any PSMC contract.

PSMC Quality Standards

  1. Consistency of Funding. In order to ensure that fiscal constraints do not jeopardize quality during the implementation of a new PSMC system, service funds must be maintained constant during the first year and until quality adherence in the new system is demonstrated.
  2. Measurable Indicators. All PSMC initiatives must define a set of measurable quality indicators to define program objectives.
  3. Comprehensive Quality Monitoring. These indicators must cover, at minimum, the following areas that relate to the structure, process, and outcome of care in the PSMC system:
  1. Access to Care:
  • Size, availability, and composition of provider network
  • Caseload sizes and waiting fists
  • Availability of crisis services
  1. Continuity of Care:
  • Preservation of existing community treatment relationships and support systems
  • Availability of case management services for high-risk, high-utilizer children and adults
  • Linkages between outpatient and inpatient services
  1. Comprehensivness and Appropriateness of Care:
  • Comprehensive continuity of services for all ages, diagnoses, and levels of complexity
  • Flexible benefit design to encourage utilization of alternative service models including a comprehensive array of psychotherapeutic and psychopharmacology modalities
  • Treatment in the least restrictive and most therapeutic setting
  • Adequacy of formulary and laboratory services and resources
  1. Responsiveness of Care:
  • Documentation of consumer and family involvement in treatment planning
  • Adherence to appropriate consumer rights policies
  • Monitoring use of restraint, seclusion, and involuntary treatment
  • Cultural competence in services as defined by ethnically and culturally specific indicators
  1. Integration of Care: Mental health and addictions services
  • Mental health and primary care services, including health promotion and disease prevention
  • Child/family mental health and child/family social and educational services
  • Mental health and community support and rehabilitation services, including psychosocial rehabilitation, housing, and vocational supports
  • Mental health and corrections services
  1. Outcomes of Care: Measure of clinical outcomes, including quality of life
  • Relapse and rehospitalization rates
  • Adverse incidents monitoring
  • Consumer and family satisfaction surveys
  1. Adherence to National Standards. The program design and quality measures must reference one or more existing standards for PSMC and clarify and demonstrate adherence to those standards (see references).
  2. Inclusive Governance. All systems must have inclusive governance, through a structured and empowered accountability system in the form of an oversight board or similar entity, with representation of consumers, families, providers, and other advocacy groups.
  3. Empowered Quality Monitoring. The oversight group should have the authority to approve the quality standards for monitoring quality data and to require corrective action to address identified quality deficiencies.
  4. Grievance and Appeals Process. There must be a well-defined grievance and appeals process which can promptly and effectively evaluate adverse incidents and resolve disagreements that occur between the managed care organizations and consumers and/or providers. There must be an independent ombudsman's office to act as final arbiter of appeals, as only an independent agency can equitably rule on quality care issues without conflict of interest.
  5. Effective Management Information Systems. The information system should effectively capture clinical data to utilize for quality and outcomes monitoring, while preserving client confidentiality.
  6. Independent Program Evaluation. In addition to the internal QM system, there should be a funded independent program evaluator to conduct an external audit of the program at least annually in order to ensure the likelihood that the PSMC system change is successfully maintaining or improving quality.


  1. AACP, 1995. "Guidelines for psychiatric leadership in organized delivery system for treatment of psychiatric and substance disorders".
  2. AACP, 1996. Principles for Formulary Management in Public Managed Care Systems.
  3. 3. American Academy of Child and Adolescent Psychiatry, 1996. Best Principles for Managed Medicaid RFPs.
  4. American Managed Behavioral Healthcare Association: Performance Measures for Managed Behavioral Healthcare Programs (PERMS 1.0). AMBHA Quality Improvement and Clinical Services Committee, Washington, DC, August 1995
  5. Bazelon Center for Mental Health Law, 1996, Managing Managed Care. (Online Summary)
  6. Center for Mental Health Services, 1995. The MHSEP Consumer-Oriented Mental Health Report Card: The Final Report of the Mental Health Statistics Improvement Program (MHSIP) Task Force on a Consumer-Oriented Mental Health Report Card, April 1996. (To Order)
  7. Center for Mental Health Services Managed Care Initiatives, 1998. Report of the panel on co-occurring disorders. Standards for managed care systems.
  8. Healthy People 2000 Review, 1995-96. Mental Health and Mental Disorders Objectives, pages 72 - 76.
  9. Institute of Medicine, Committee on Quality Assurance and Accreditation Guidelines for Managed Behavioral Health Care. Managing Managed Care. Quality Improvement in Behavioral Health. National Academy Press, Washington, DC, 1997.
  10. Malloy, M, 1995. Mental Illness and Managed Care: a Primer for Families and Consumers. Arlington, VA; National Alliance for the Mentally Ill.
  11. National Alliance for the Mentally Ill, 1997. Managed Care Report Card.
  12. National Community Behavioral Healthcare Council, 1997. Principles for Behavioral Healthcare Delivery.
  13. National Association of State Mental Health Program Directors. Document on managed care in public systems.
  14. National Latino Behavioral Health Workgroup, WICHE, 1996. Cultural Competence Guidelines in Managed Care Mental Health Services for Latino Populations.