Medicaid Managed Care:

Use of Limited Benefit Plans to Provide Mental Health Services and Efforts to Coordinate Care

GAO-13-780: Published: Sep 30, 2013. Publicly Released: Sep 30, 2013.

Additional Materials:


Carolyn L. Yocom
(202) 512-7114


Office of Public Affairs
(202) 512-4800

What GAO Found

Thirteen states reported that in fiscal year 2012 they paid a total of about $5.6 billion to limited benefit plans to provide mental health services to about 4.4 million adult Medicaid beneficiaries. States can enroll different populations--such as adults who are blind, disabled, or have developmental disabilities--in limited benefit plans, which could contribute to the variation in the number of adults enrolled and level of capitated payments made across the 13 states.

Four selected states--Florida, Kansas, Michigan, and Washington--took three steps to facilitate the coordination of mental and physical health care services:

1. incorporating care coordination requirements in limited benefit plan contracts;

2. implementing additional steps to coordinate care, such as policies that included incentives to coordinate care; and

3. monitoring limited benefit plans' implementation of care coordination.

GAO found that the Centers for Medicare & Medicaid Services' (CMS) did not take direct steps to facilitate care coordination, because its role is to oversee and provide technical assistance. In its oversight role, CMS reviewed and approved state submitted documents, such as contracts with mental health limited benefit plans, some of which contained care coordination requirements.

Why GAO Did This Study

Medicaid is the largest payer of mental health services in the United States and Medicaid spending on such services is likely to grow. Some states provide mental health services to Medicaid beneficiaries separately from physical health care services through contracts with limited benefit plans, which are paid on a per person basis to provide a defined set of services. While using these plans to provide mental health services may control costs, it can also increase the risk that these services will not be coordinated with physical health care services. Coordinated care is important for Medicaid beneficiaries with mental illnesses because they are more likely than others to have ongoing health conditions. GAO was asked for information on states' use of Medicaid managed care. In this report, GAO examined the (1) extent that states provide mental health services through limited benefit plans, and (2) steps states and CMS have taken to facilitate the coordination of mental and physical health care services for adult beneficiaries enrolled in these plans.

GAO collected information on enrollment, payments, and services from the 13 states that contracted with limited benefit plans to provide mental health services to adult beneficiaries. GAO also selected 4 states based on, among other criteria, the number of beneficiaries enrolled in limited benefit plans. GAO reviewed documents from the 4 states and CMS, and interviewed officials to identify steps taken to coordinate care.

The Department of Health and Human Services provided technical comments, which GAO incorporated, as appropriate.

For more information, contact Carolyn L. Yocom at (202) 512-7114 or

Jan 17, 2018

Jan 16, 2018

Jan 8, 2018

Dec 14, 2017

Dec 5, 2017

Nov 29, 2017

Nov 15, 2017

Nov 14, 2017

Looking for more? Browse all our products here