By Kamala Allen and Taylor Hendricks, Center for Health Care Strategies

“Eleven-year-old Angel has moved from one foster home to another since age six. His mother struggles with heroin addiction, his father is deceased, and he rarely sees his three siblings who live in separate foster homes. Angel has a hard time concentrating in school and worries incessantly about whether he will see his family again or if he’ll end up in another foster home. Sometimes, he feels so depressed that he wants to die, but he doesn’t tell anyone about his feelings, fearing they will put him in a hospital.”

Angel is a fictional character but the challenges he faces are very real. His story was developed by Katherine E. Grimes, MD, MPH, to represent a composite of what a Medicaid-enrolled child with behavioral health needs may experience. The story helps illustrate the behavioral health challenges faced by many children throughout the U.S. who often receive fragmented care from multiple public systems, leading to poor health outcomes and costly utilization. As a major payor for children’s behavioral health care, Medicaid can advance improvements in care that increase the likelihood of positive outcomes for children facing the issues depicted in Angel’s story.

To help identify ways to improve behavioral health care, the Center for Health Care Strategies conducted a national analysis of children’s behavioral health care use in Medicaid. The  50-state study, funded by the Annie E. Casey Foundation, with support from the Substance Abuse and Mental Health Services Administration and The Commonwealth Fund, examines: (1) behavioral and physical health service use and expense; (2) psychotropic medication use; and (3) patterns of use among children in foster care and those with developmental disabilities.

Key Findings

Among many significant findings, Dr. Grimes along with researchers Sheila A. Pires, MPA, Human Service Collaborative; and Todd Gilmer, PhD, University of California, San Diego, discovered:

• Less than 10 percent of children in Medicaid use behavioral health care, accounting for roughly 38 percent of expenditures for children.
• Under four percent of children in Medicaid using behavioral health services use residential treatment/therapeutic group care, but this service accounts for 19 percent of total behavioral health expenses.
• Children in foster care and those on SSI/disability together represent one-third of the Medicaid child population using behavioral health care, but 56 percent of total behavioral health expenses.
• Almost 50 percent of children in Medicaid prescribed psychotropic medications receive no accompanying identifiable behavioral health services, like medication management or counseling.

Opportunities for Improvement

These findings point to specific opportunities for states to improve the quality and cost-effectiveness of children’s behavioral health care, including:

1. Expand access to appropriate and effective behavioral health services, beyond psychotropic medications;
2. Invest in care coordination models, particularly those using a wraparound approach; and
3. Enhance collaboration between child-serving systems, especially the child welfare, behavioral health, and primary care systems.

Many states are already exploring these opportunities, including Georgia, Maryland, and Wyoming, where stakeholders are working to better coordinate care for children with serious behavioral health needs through a Care Management Entity approach. Several Affordable Care Act provisions—including health homes funding and increased support for home- and community-based services—also present pathways for pursuing improvements.

An issue brief highlighting key findings as well as the full report are available on CHCS’ website.