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The NorthSTAR Model. Publicly funded, managed care program in Dallas and surrounding counties that provides mental health and substance abuse services in one integrated service delivery system.

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The northstar model
The NorthSTAR Model

  • Publicly funded, managed care program in Dallas and surrounding counties that provides mental health and substance abuse services in one integrated service delivery system.

  • Combines services/dollars provided by former HHSC agencies TDMHMR, TCADA, traditional Medicaid as well as local dollars

  • A true public-private partnership

  • Eligible individuals include most Medicaid recipients in service area, as well as medically indigent (200% FPL)

    “NorthSTAR promotes better of care….This is especially true for people with mental health and substance abuse coordination and continuity disorders who can now receive care for both categories of conditions in one system with one provider network” -LBJ School of Public Affairs Report-UT, September 2003

The northstar experience

The NorthSTAR Experience

David Wanser, Ph.D.

Texas Department of State Health Services

June 13th, 2006

Organizational design

State (DSHS) contracts with, and oversees managed care organization (ValueOptions).

ValueOptions is responsible for developing a network of qualified, credentialed providers and required to manage care for all eligible individuals.

Local Behavioral Health Authority (DANSA) serves as behavioral health authority for service area, as well as a local problem solving resource for consumers (ombudsman services).

Significant Stakeholder Involvement

Organizational Design

Department of State Health Services

= Contractual Authority



Provider Network



Fy 05 budget for northstar
FY 05 Budget for NorthSTAR organization (ValueOptions).


General Revenue 37,976,798

Medicaid (Fed) 27,773,342

Mental Health Block Grant 3,375,541

Substance Abuse Block Grant 10,632,114

Other Federal 915,559

Local Funds 5,054,585

Interagency Receipts 12,202,045


NorthSTAR FY05 Budget $97,929,984

Pooled purchasing
Pooled Purchasing organization (ValueOptions).

  • Transformed separate, disparate systems of care into one system of care.

  • Reduced State and provider administrative costs

  • Provides comprehensive benefit package for eligible Medicaid and medically indigent individuals

  • Access to services determined by clinical need, not funding source

  • Continuation of services regardless of Medicaid status

Other features of northstar
Other features of NorthSTAR organization (ValueOptions).

  • Open access system- no waiting list for services (wait list for new generation medications)

  • Services are broad and flexible (evidence based)

  • Consumer choice of providers

  • More expansive provider network, with competition among providers

  • Services are regularly reviewed by licensed care management staff to ensure appropriateness

  • High level of accountability-rigorous contractual requirements, managed by routine site reviews and analysis of comprehensive service level data

  • Universal access for crisis/emergency services

  • Stakeholder input is the centerpiece of the program

What has northstar accomplished
What has NorthSTAR Accomplished? organization (ValueOptions).

  • Increase in number served- more clients receive services now than prior to NorthSTAR

    • increase in # served from pre-NorthSTAR to present is approx. 100%

  • The average number of services delivered per enrollee is higher than anywhere else in Texas

  • There are no waiting lists for services (new generation medications)

  • Integration of all levels of care

  • Substantial growth in provider network to serve Medicaid and non-Medicaid populations

  • Jail Diversion Strategies- in calendar year 2003, 10,822 individuals were brought to Green Oaks Hospital by law enforcement.

  • Increase in number served
    Increase in Number Served organization (ValueOptions).

    • Number of enrollees served has increased each year

    Decreased community inpatient utilization
    Decreased Community Inpatient Utilization organization (ValueOptions).

    • Establishment of Acute Care “Front Door” 23 hour Observation has lead to decrease in unnecessary hospital inpatient utilization in community

    Increase choice of providers
    Increase Choice of Providers organization (ValueOptions).

    • Expansion of provider network empowers clients

    • Providers compete with one another, as in private sector.

    System efficiency and accountability
    System Efficiency and Accountability organization (ValueOptions).

    • Electronic billing from providers exceeds 80%

    • Average payments in NorthSTAR occur with 14 days

    • Analysis of billing patterns results in the minimization of inappropriate and/or fraudulent billing practices

    • Managed care methodologies promote clinical and financial efficiency, resulting in quality care and significant savings for State of Texas

    Service expense and funding equity

    Service Expense and Funding Equity organization (ValueOptions).

    The difference between the NorthSTAR and non-NorthSTAR productivity is substantial and NorthSTAR is more productive than each community center and the non-NorthSTAR areas taken together.

    Recognition awards
    Recognition/Awards organization (ValueOptions).

    • 2001 Semifinalist, Innovations in American Government, JFK School of Government- Harvard University

    • 2002 Top 100 Government Programs Innovations in American Government, JFK School of Government- Harvard University

    • Consistently Strong Support from Consumer Advocacy Groups

    • NorthSTAR is well known nationally for its open access and its substantial successes

    Challenges to the northstar program
    Challenges to the NorthSTAR Program organization (ValueOptions).

    • Population increase for NorthSTAR service area is approximately +500,000 since inception

    • Number served and expenditures continue to climb

    • Funding level not commensurate with need.

    • Both ValueOptions and provider network experiencing financial stress due to financial constraints

    • Cost shifting presents significant problem

    Summary organization (ValueOptions).

    • NorthSTAR is a unique approach to delivery of publicly funded mental health and substance abuse services

    • System is highly efficient, efficacious and accountable

    • Competitive environment has resulted in increased quality, client empowerment and a rethinking of “safety net”

    • RFP, application review and contracting strategy and content have been very strong contributors to the success of the program

    • Information technology investments have been crucial.