Get access

Two-Year Outcomes of Fee-for-Service and Capitated Medicaid Programs for People with Severe Mental Illness


  • Brian J. Cuffel,

  • Joan R. Bloom,

  • Neal Wallace,

  • Jaclyn W. Hausman,

  • Teh-wei Hu

This project was supported by the National Institute of Mental Health Grant R01 MH54136. We would like to acknowledge members of the data collection team, including Donna Bass, Nick Butler, Sylvia Garcia, Robin Levin, Cindy Lurie, Trish Neveils, Ira Slotkin, and Deb Sprague. We would also like to acknowledge the contributions of Dale Peterson, CEO of Weld CMHC, Bill Bush, Richard Ellis, Gary Toerber, Tom Barrett, and Nancy Wilson of Colorado's Mental Health Services.

Address correspondence to Brian J. Cuffel, Ph.D., Vice President of Research, United Behavioral Health, 425 Market Street, 27th Floor, San Francisco, CA 94105. Joan R. Bloom, Ph.D., is a Professor, and Teh-wei Hu, Ph.D., is a Professor, School of Public Health at UC Berkeley. Neil Wallace, Ph.D., is Assistant Professor in Public Administration at Portland State University. Jackie Hausman, M.P.P., M.P.H., was Project Coordinator, Colorado Medicaid Demonstration Project Evaluation. This article, submitted to Health Services Research on April 17, 2000, was revised and accepted for publication on December 5, 2000.


Objective. To examine the effects of two models of capitation on the clinical outcomes of Medicaid beneficiaries in the state of Colorado.

Data Source. A large sample of adult, Medicaid beneficiaries with severe mental illness drawn from regions where capitation contracts were (1) awarded to local community mental health agencies (direct capitation), (2) awarded to a joint venture between local community mental health agencies and a large, private managed behavioral health organization, and (3) not awarded and care continued to be reimbursed on a fee-for-service basis.

Study Design. The three samples were compared on treatment outcomes assessed over 2 years (total n=591).

Data Collection Methods. Study participants were interviewed by trained, clinical interviewers using a standardized protocol consisting of the GAF, BPRS, QOLI, and CAGE.

Principal Findings. Outcomes were comparable across most outcome measures. When outcome differences were evident, they tended to favor the capitation samples.

Conclusions. Medicaid capitation in Colorado does not appear to have negatively affected the outcomes of people with severe mental illness during the first 2 years of the program. Furthermore, the type of capitation model was unrelated to outcomes in this study.