Purchasing Managed Care Services for Alcohol and Other Drug Treatment
Technical Assistance Publication (TAP) Series 16

Managed Healthcare Organizational Readiness Checklist

Following is a managed care readiness checklist for publicly funded substance abuse treatment service providers, a vital segment of the health services system. The checklist is intended:

1. To identify a program's strengths and weaknesses in specific areas, and

2. To enhance a strategic planning process that will assist your organization to prepare for success in a managed care environment.

Use of the checklist will help treatment providers anticipate the skills that will be needed to prosper in a changing healthcare system.

Use of the checklist cannot substitute for an onsite assessment. However, it is likely to generate productive thought and discussion.

It is not necessary to have a perfect score to secure a contract with a managed care firm for private or public patients. In general, the better prepared your organization, the more likely it is that you will be selected to provide services.

Twelve areas are assessed:

There are survey questions for each area. In addition, there is a summary at the end of the checklist.

Please answer each question using a whole number, i.e. 1, 2, 3, 4, or 5. One is the lowest score, while 5 is the highest score. Use the following scale for your response.

Service Comprehensiveness

No, None, Never Very Limited, Not Often Partially, Frequently Mostly, Regularly Yes, Fully, Always
1 2 3 4 5
For adults, do you deliver: Please circle the answer...
1. Centralized screening, assessment, intake, and crisis intervention services? 1 2 3 4 5
2. Comprehensive outpatient services? 1 2 3 4 5
3. Intensive outpatient services, or do you have strong network relationships with providers of such services? 1 2 3 4 5
4. Partial hospitalization/day treatment services, or do you have strong network relationships with providers of such services? 1 2 3 4 5
5. Short-term residential treatment, or do you have strong network relationships with providers of such services? 1 2 3 4 5
6. Inpatient treatment, or do you have strong network relationships with providers of such services? 1 2 3 4 5
For children and adolescents, do you deliver:
7. Centralized screening, assessment, intake, and crisis intervention services? 1 2 3 4 5
8. Outpatient services? 1 2 3 4 5
9. Intensive outpatient services, or do you have strong network relationships with providers of such services? 1 2 3 4 5
10. Partial hospitalization/day treatment services, or do you have strong network relationships with providers of such services? 1 2 3 4 5
11. Short-term residential treatment, or do you have strong network relationships with providers of such services? 1 2 3 4 5
12. Inpatient treatment, or do you have strong network relationships with providers of such services? 1 2 3 4 5
13. Do you have skilled clinical staff assigned to all aspects of the screening and assessment process, including initial telephone contacts? 1 2 3 4 5
14. Do your services ensure rapid access (1-2 days) to assessment services and initial placement? 1 2 3 4 5
15. Do your services have a brief intervention focus, e.g., six to eight sessions for outpatient care, for most patients? 1 2 3 4 5
16. Do you have internal case management services for focusing on repeating patients and others who have high utilization patterns? 1 2 3 4 5
17. Do you have ensured linkages with primary healthcare providers for needed healthcare? 1 2 3 4 5
18. Do you adapt standard services to meet the needs of special populations, such as mentally ill substance abusers, injecting drug users, and pregnant addicts? 1 2 3 4 5
19. Are service needs constantly reevaluated, and service plans modified, based on patient progress? 1 2 3 4 5
20. Are admission, treatment, and discharge criteria in place and used consistently by staff? 1 2 3 4 5
21. Do your admission, treatment, and discharge criteria take into consideration the practice standards of managed care firms with which you have (or hope to have) contracts? 1 2 3 4 5
22. Do your services ensure rapid linkage to succeeding levels of care? 1 2 3 4 5
23. Do your services emphasize family involvement and use of natural support systems, including self-help groups? 1 2 3 4 5
24. Do your services focus on patient outcomes and satisfaction? 1 2 3 4 5
Quality Assurance (QA) and Utilization Management (UM)
25. Do you have QA and UM procedures that have been shared with clinical staff? 1 2 3 4 5
26. Does the staff you have designated to perform the QA/UM function review clinical activities for consistent use of established admission, treatment, and discharge criteria? 1 2 3 4 5
27. Is the information from the QA/UM function received rapidly enough to assist clinicians during an episode of care? 1 2 3 4 5
28. Does the QA/UM function include maintaining records of managed care appeals, and suggest strategies for improving relationships and/or modifying service delivery to reduce denials? 1 2 3 4 5
29. Do you have sufficient staff assigned to the QA/UM function? 1 2 3 4 5
30. To what extent is the QA/UM function designed to "stay ahead" of staff from managed care firms by anticipating their concerns? 1 2 3 4 5
31. Do clinicians, clinical supervisors, and management all receive and act on regular QA and UM reports? 1 2 3 4 5
32. Is the QA/UM function tied closely to your management information system? 1 2 3 4 5
33. To what extent is the QA/UM function focused on patient outcomes? 1 2 3 4 5
34. Are patient satisfaction surveys a regular function of QA/UM? 1 2 3 4 5
Managed Care and Employee Assistance Program (EAP) Experience
35. Do you have contract(s) with managed care firms or EAPs as a preferred provider? 1 2 3 4 5
36. If yes to #35, are any of your contracts paid on a fee-per-case or a capitation basis? 1 2 3 4 5
37. Do you offer an employee assistance program which includes crisis intervention, assessment and linkage to service, followup to assure receipt of appropriate services, and coordination of benefits? 1 2 3 4 5
38. Does your EAP provide consultation to management on policies and procedures, training to managers and supervisors, assistance with specific cases, employee education and orientation programs, critical incident debriefing, and reporting on utilization and effectiveness? 1 2 3 4 5
39. Has your EAP business increased over the last 2 years? 1 2 3 4 5
Management Information Systems (MIS)
40. Do you have an MIS which can retrieve patient information either online or in less than 1 hour? 1 2 3 4 5
41. Does your MIS have integrated functions for client information; service utilization; financial information, including payer type by client; and client records? 1 2 3 4 5
42. To what extent does your MIS permit single-source response inquiries from managed care organizations? 1 2 3 4 5
43. To what extent does your MIS produce information that is used by clinicians, supervisors, and management? 1 2 3 4 5
44. To what extent does your MIS integrate information from various programs and sites? 1 2 3 4 5
45. Is your MIS designed so that client and service information can be reported to all major payers? 1 2 3 4 5
46. Does your MIS generate patient invoices? 1 2 3 4 5
Staff and Staff Training
47. Do clinical staff accept shared responsibility with case managers from managed care organizations for clinical decisions? 1 2 3 4 5
48. Are staff informed concerning the funding and managed care environment, including managed care criteria for admission and discharge? 1 2 3 4 5
49. Have clinical and supervisory staff resolved concerns about cost, service quality, access, and managed care? 1 2 3 4 5
50. Do you have an ongoing staff training program that includes brief service intervention skills, patient assessment and reassessment, and instructions on how to respond to managed care organizations? 1 2 3 4 5
Organizational Relationships
51. To what extent have you implemented referral and business arrangements with other behavioral healthcare organizations, e.g., mental health and substance abuse programs? 1 2 3 4 5
52. To what extent have you implemented referral and business arrangements with primary or specialty healthcare organizations, e.g., hospital emergency rooms and physician group practices? 1 2 3 4 5
53. To what extent have you been involved in economic arrangements with other healthcare 1 2 3 4 5
Board and Management
54. Do you have significant experience at contract negotiation and management? 1 2 3 4 5
55. To what extent is the board oriented to service effectiveness and business success? 1 2 3 4 5
56. Are you experienced at strategic planning, modifying plans, and developing contingency plans to meet emerging opportunities and challenges? 1 2 3 4 5
57. How well informed are board members and top management concerning healthcare reform, managed care, financing options, and interorganizational arrangements? 1 2 3 4 5
58. Are mechanisms in place which would allow for prompt shifts in response to business opportunities? 1 2 3 4 5
59. To what extent will the board and management be proactive and entrepreneurial in pursuit of managed care initiatives? 1 2 3 4 5
Marketing
60. Do you have marketing plans that target payers, referral sources, and the general public? 1 2 3 4 5
61. Do you have sufficient staff resources assigned to the marketing function? 1 2 3 4 5
62. To what extent does your service line emphasize acute and primary services (rather than long-term, rehabilitative, and wraparound care)? 1 2 3 4 5
63. Have you prepared a managed care capability statement? 1 2 3 4 5
64. To what extent have you made marketing presentations to the large employers in your service area? 1 2 3 4 5
65. Do your costs per episode and lengths of stay compare favorably with the competition? 1 2 3 4 5
Fiscal Analysis
66. To what extent is your revenue diversified? 1 2 3 4 5
67. Do you have adequate liquid reserves for at least 2-3 months operating expenses? 1 2 3 4 5
68. Have you accumulated (or can you access) venture capital sufficient to respond to a major business opportunity? 1 2 3 4 5
69. Have you maximized Medicaid revenue? 1 2 3 4 5
70. Does your fiscal system, in combination with the MIS, allow analysis of cost-per-unit of service, cost-per-episode of care, and cost by disability type and level of functioning? 1 2 3 4 5
71. Can the fiscal staff assist with pricing issues during contract negotiations, especially when capitated contracts are considered? 1 2 3 4 5
72. Can the fiscal staff readily compare actual to anticipated revenue and expense by contract? 1 2 3 4 5
Business Office
73. Is the business office experienced at fee-for-service invoicing for Medicaid, preferred provider organization (PPO) contracts, insurance, patient fees, etc.? 1 2 3 4 5
74. Does the business office conduct internal service audits to ensure that documentation of services in patient records can withstand an external audit? 1 2 3 4 5
75. To what extent is the business office's invoicing function integrated into your MIS? 1 2 3 4 5

Summary of Answers

This section allows you to generate a score for each area. Add together the individual response scores for the questions in each of the 12 sections. Then divide the total by the number of questions in that section to generate a composite score for the section. Enter the composite score on the 1 to 5 scale at right.

Divide Weakest Strongest
Total by Composite Position Position
Adult Services Comprehensiveness 6 1 2 3 4 5
Adolescent Services Comprehensiveness 6 1 2 3 4 5
Service Characteristics 12 1 2 3 4 5
QA and UM area 10 1 2 3 4 5
Managed Care an EAP area 5 1 2 3 4 5
MIS area 7 1 2 3 4 5
Staff and Training 4 1 2 3 4 5
Organizational Relations 3 1 2 3 4 5
Board and Management 6 1 2 3 4 5
Marketing 6 1 2 3 4 5
Fiscal Analysis 7 1 2 3 4 5
Business Office 3 1 2 3 4 5
All scores 75 1 2 3 4 5

This approach will show you the areas in which your organization is well prepared for managed care participation, the areas in which additional work may be needed, and the areas of relative weakness where immediate remedial activities can be targeted.

It may also be helpful to inspect the variations in the scores among the various persons in your organization who complete the checklist. You may find a range of answers and perceptions on a specific question or within one or two sections. It might be illuminating to note the differences, for instance, between management, board members, and clinical staff.

On the following page you will find a list of Common Questions and Answers

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