The Effect of Medicaid Policies on the Diagnosis and Treatment of Children’s Mental Health Problems in Primary Care

Lesley J. Turner , February 2015.

Poor children and children covered by public health insurance disproportionately suffer from mental health conditions. Even though Medicaid is the largest payer for children’s mental health services, a large body of research suggests that many low-income children suffer from undiagnosed mental health conditions and up to 70 percent of Medicaid children with a mental health diagnosis do not receive treatment. Primary care physicians play an important role in diagnosing mental health conditions and serve as potential avenues for addressing this problem. A concern, however, is that certain Medicaid managed care policies, such as those that require patients to gain approval before seeing a specialist or those that do not reimburse primary care physicians for diagnosing and treating mental health problems, can inhibit primary care physicians from playing this role.

Turner evaluates how Medicaid managed care policies impact primary care physicians’ ability to diagnose and treat children’s mental health conditions by focusing on three specific approaches to the delivery of mental health services – behavioral carve-out organizations (BHCO), traditional health maintenance organizations (HMO), and primary care case management (PCCM) – in Massachusetts, New York, and North Carolina. Using data from the 2001 and 2003 Medicaid Analytic Extract (MAX), which provides information on patient demographics, Medicaid policy, provider services, and filled prescriptions, Turner finds variation in how the different policies affect care providers. Her analysis suggests that PCCM policies led to a shift in diagnosis and treatment rates from within primary care to specialist providers such as psychiatrists. Conversely, HMO enrollment decreases mental health diagnosis rates both within and outside of primary care. Physicians could in principle increase mental health treatment without formally diagnosing mental health problems, but given Medicaid managed care policy restrictions on reimbursement, this does not appear to have happened.   

Over the past two decades many states’ Medicaid programs have shifted a large portion of recipients into managed care. In fact, the number of states with Medicaid managed care tripled between 1996 and 1999 and, as of December 2010, 72 percent of Medicaid recipients receivedmanaged care. Turner’s results suggest that this shift in Medicaid policy may have increased the likelihood that large numbers of low-income children with mental health disorders will remain undiagnosed and untreated.



Turner, L. J. (2015). The Effect of Medicaid Policies on the Diagnosis and Treatment of Children's Mental Health Problems in Primary Care. Health economics, 24(2), 142-157.

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