Through the Serious Mental Illness (SMI) Innovations Project, Pennsylvania’s Department of Public Welfare sought to improve the integration of physical and behavioral health services and reduce unnecessary utilization for Medicaid beneficiaries with both mental illness and chronic medical conditions. The two-year initiative, which began in 2009, included two pilots in the Southeastern and Southwestern regions of the state. It was part of the Rethinking Care Program, a national initiative coordinated by the Center for Health Care Strategies (CHCS) and supported by Kaiser Permanente Community Benefit to test new care management approaches for Medicaid’s highest-need, highest-cost beneficiaries.

Although outcomes varied across the two regions, the evaluation conducted by Mathematica Policy Research identified that one or both pilots were successful at reducing the rate of mental health hospitalizations, all-cause readmissions, and emergency department visits. Compared with projected trends in these outcomes without the interventions:

  • The rate of mental health hospitalizations was an estimated 12 percent lower (Southwest);
  • The all-cause readmission rate was an estimated 10 percent lower (Southwest); and
  • The rate of emergency department (ED) use was an estimated 9 percent lower (Southeast).

Individuals with both serious mental illness and chronic medical conditions are among Medicaid’s highest-cost populations. As states across the nation explore ways to curb costs and improve quality for Medicaid’s highest-need, highest-cost populations, the Pennsylvania pilot findings offer tangible strategies for doing so.

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