DRUG ABUSE TREATMENT COSTS OF MEDICAID CLIENTS IN AN HMO

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The dramatic growth in health maintenance organizations (HMO) enrollment has heightened concern about the adequacy of treatment available for persons with substance abuse problems. This topic is of particular interest to the growing number of states that are now replacing fee-for- service with capitated health care systems for Medicaid clients, many of whom have severe substance abuse problems. If true, this could disrupt continuity of care and lead to poorer outcomes for Medicaid clients with substance abuse problems. The broad purpose of this study is to provide a better understanding of substance abuse treatment for Medicaid clients in HMOs in order to improve care for Medicaid enrollees. The specific aims are: 1. To describe enrollment duration, service use, and cost care of Medicaid funded enrollees seeking treatment of chemical dependency; 2. To compare enrollment duration, service use, and cost of care of chemically dependent Medicaid clients with hose of non-Medicaid HMO enrollees; and 3. To develop a risk adjustment model designed to improve the prediction of chemical dependency treatment costs for the Medicaid population. Decision makers could use information from this study to set policies to improve the retention of Medicaid clients in HMOs and for setting per member per month payment rates for capitated Medicaid programs. Policy makers especially need cost data on sub-groups of the Medicaid population such as children and youth.