- Associated Press - Tuesday, April 5, 2016

BOISE, Idaho (AP) - Officials with the Idaho Department of Health and Welfare have approved a 15-month contract extension with Optum Idaho, which manages mental-health and substance-abuse treatment for Medicaid recipients.

Optum has been in charge of administering Medicaid outpatient behavioral health services since 2013. The original $300 million contract expired in March. The new extension costs more than $186 million and expires at the end of June 2017.

Optum, a unit of UnitedHealth Group, also manages Medicaid health services for other states.

Spokesman Tom Shanahan said the agency chose to extend the contract to give officials more time to study recent suggestions from state evaluators. The Idaho Office of Performance Evaluations recommended in January that the state consider also having Optum administer inpatient services. However, doing so would mean the state would need to create a new contract rather than just renew the one it has now.

“We are hoping to have the study done at the end of this calendar year so we can report back to the 2017 Legislature,” Shanahan said in an email.

Several years ago, lawmakers and state health officials began raising concerns that providers were overusing costly rehabilitation services in order to receive higher Medicaid reimbursements.

Medicaid spending for community-based rehabilitation, also known as psychosocial rehabilitation, ballooned from $8.3 million in 2001 to $76.1 million in 2012.

Community-based rehabilitation involves trained professional helping people with mental illnesses or substance abuse integrate back into society.

However, less than two years after the state began using Optum, Medicaid spending had dropped to $44.1 million as of 2015. Yet the move sparked complaints from providers who say community-based rehabilitation is a vital tool for treating mental illnesses like ADHD - particularly among children and adolescents.

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