The impact of managed care on the substance abuse treatment patterns and outcomes of Medicaid beneficiaries: Maryland's HealthChoice program

The introduction of Medicaid managed care raises concern that profit motives lead to the undersupply of substance abuse (SA) services. To test effects of the Maryland Medicaid HealthChoice program on SA treatment patterns and outcomes, Medicaid eligibility files were linked to treatment provider records and two study designs were used to estimate program impact: a quasi-experimental design with matched comparison groups and a natural experiment. Patient sociodemographic and clinical characteristics were adjusted using multiple regression. Under managed care, there was a shift from residential, correctional-only, and detoxification-only treatment toward outpatient-only treatment. Among beneficiaries entering treatment, those enrolled in managed care organizations (MCOs) had similar utilization and outcomes to those in Medicaid fee-for-service; those enrolling in MCOs during treatment had longer and more intensive episodes and, as a result, better outcomes. Thus, the study disclosed no empirical evidence that health plans respond to capitation by reducing SA services.