What is the basic funding arrangement of a Managed Behavioral Health Organization (MBHO)?

The basic funding arrangement of a Managed Behavioral Health Organization (MBHO) often involves Shared Risk and Administrative Services Only (ASO) arrangements. This approach allows organizations to effectively manage and administer behavioral health benefits while sharing risk with the employer.

In a shared risk model, the MBHO takes on the responsibility of managing costs associated with behavioral health care, which can help employers maintain predictability in their healthcare expenditures. The administrative services provided by the MBHO, such as claims processing, utilization review, and provider network management, are crucial for ensuring that employees receive appropriate care while controlling costs.

This arrangement differs from fully insured plans, where an insurance company assumes the risk entirely, and employers pay a fixed premium. Similarly, self-funded arrangements involve employers assuming the full financial risk of claims, which is not typical for MBHOs. Options involving employers covering all costs without insurance would not be representative of the operational and financial framework of most MBHOs, which utilize shared risk models to provide a balance of cost control and access to care.