The state is preparing to turn over to a private company the management and coordination of behavioral health care for more than 150,000 children and adults.

The state Department of Health and Hospitals’ efforts are geared to about 2,500 children and youth at-risk of jail or other institutional placement because of serious mental health issues, addictive disorders or both.

Now, DHH has issued a “request for proposals” for a private firm to handle that population, as well as another 50,000 children and youth and 100,000 adults with behavioral health issues.

Companies have until Aug. 15 to submit their credentials and their recommendations for how to run a “State Management Organization,” called SMO.

The state budget for the fiscal year that began July 1 appropriates $167.5 million for behavioral health programs, including $12 million for transition and training related to the move.

The structure of the program is similar to one DHH is using to shift the health-care needs of some 800,000 Medicaid recipients to private insurance companies and other entities. The companies would enter contracts with physicians, hospitals and other providers that would form “coordinated care networks” to manage the health-care needs of the poor.

In the case of behavioral health, the state would hire one firm that would contract with psychiatrists, psychologists, social workers, mental health and drug abuse clinics and other providers. The contracts would form the basis of the new care networks.

The SMO would be paid an administration fee. It would approve the care delivery plan, services to be paid and designate those in need of services.

The state would still maintain control of the policy and direction of the program, making sure the firm maintains an adequate provider network and meets established outcomes and goals.

“The State Management Organization is the big key to making this work,” said state Department of Health and Hospitals Deputy Secretary Kathy Kliebert. “It’s a single point of entry.”

The program will begin in five regions — Capital, Shreveport, Monroe, Alexandria and Jefferson Parish. Within a year, plans are to have the program up and functioning in all regions of the state.

The state is seeking federal approval of a couple of changes, including expanding Medicaid eligibility for some children.

“The biggest advantage of this is access. We have such a difficult time trying to find psychiatrists, psychologists,” DHH’s Kliebert said.

Medicaid can’t recruit private psychiatrists, psychologists and other providers to participate, which is something a private network would have to do, she said.

“They have to go out there and make this work. They have to have a good provider network,” Kliebert said.

Under the revamp, the firm can use more social workers because they will no longer have to work for a clinic to be eligible for Medicaid reimbursement, Kliebert said. That will be a plus to providing care, she said.

Another advantage is that a good assessment is done of the individual in need and resources are allocated in a more coordinated fashion, said Jody Levison-Johnson, Coordinated System of Care director.

“It’s right services, right time,” said Levison-Johnson. “It’s right intensity, instead of what’s available right now.”

The idea is to identify the strengths and needs, and put together a plan to address those needs that ultimately reduce the risk of the person being admitted for in-patient mental health or substance abuse treatment or showing up in an emergency room or jail.

Five companies have expressed interest in the contract prior to DHH officially issuing its “request for proposals.”

They are PerformCare, a Harrisburg, Pa.-based subsidiary of AmeriHealth Mercy; OptumHealth, based in Golden Valley, Minn; Magellan Health Services, Avon, Conn.; Value Options, Norfolk, Va.; and Comprehensive Behavioral Care, Columbia, S.C.

Kliebert said Louisiana will be able to bring in more federal dollars for behavioral health care. In addition, she said, early and targeted treatment should reduce the high cost of hospital and institutional care, generating savings that can be plowed into services.

Kliebert said state dollars now going for education, family and children, and juvenile justice agency standalone programs for at-risk children can be used to attract federal funds. Today, the spending is ineligible for Medicaid reimbursement.

For programs like those run by the Capital Area Human Services District, there will be changes. Capital Area will enter into a contract with the chosen SMO and be “a preferred provider,” said Jan Kasofsky, the agency’s chief executive officer.

The agency’s “mobile out-reach” program that brings behavioral health experts to people in need will now be a “covered service” and eligible for federal matching funds under the new initiative, Kasofsky said.

In addition, school-based behavioral services will be billable to Medicaid, she said.

“I feel optimistic,” said Kasofsky, noting that other states have moved in a similar direction. But, she said, state monitoring of patient outcomes is essential.