Use of performance standards in behavioral health carve-out contracts among Fortune 500 firms

Objective: To determine the prevalence and nature of performance standards in specialty managed behavioral healthcare contracts among Fortune 500 comp anies. Study Design: This was a cross-sectional survey of all companies listed on the Fortune 500 during 1994, 1995, or both. Methods: From April 1997 to May 1998 we conducted a mailed survey with phon e follow-up. Of the 68% of firms that responded, over one third reported ca rve-out contracts. The survey focused on whether companies had behavioral h ealth carve-out contracts with specialty vendors and characteristics of the se contracts, including the use of performance standards. Results: More than three quarters of the Fortune 500 companies reporting sp ecialty behavioral healthcare contracts used at least one performance stand ard. Most common were administrative standards (70.2%) and customer service standards (69.4%). About half of the companies used quality standards, whe reas only a third used provider-related standards. Most (58.8%) companies u sing performance standards also specified financial consequences. Larger Fo rtune 500 firms were significantly more likely to use performance standards . Risk contracts and contracts that included all covered employees were als o more likely to include some categories of standards. Conclusions: Administrative and customer service standards may be most comm on because companies find it easier to specify those standards, especially compared with clinical quality measures. To the extent that employers want to obtain the most value from their behavioral healthcare purchasing, we ex pect that more will begin to adopt quality standards in their contracts, es pecially as performance measures become more refined. Reliance on accredita tion, however, is an alternative approach for employers.