HCO is a disease management approach for Medicaid recipients diagnosed with Mental illness, who are at highest risk for adverse medical and behavioral outcomes. These complicated patients commonly have combined behavioral and medical care expenditures can be significantly higher than other Medicaid recipients.


  • Medication adherence improves
  • ER and acute care events decrease
  • Medical misadventures decrease
  • High cost service events decline


In 2004, the Missouri Department of Mental Health (DMH) and the Division of Medical Services (DMS) implemented a new program called Medical Risk Management (MRM) an ambitious program to transform its state Medicaid program from a payer for services to a model program for the provision of high-quality health care focused on wellness.

The MRM program identified 2000 Medicaid Recipients diagnosed with Schizophrenia and co-occurring medical disorders. Schizophrenia, a severe mental illness, affects 1% of the population and is also associated with high rates of medical illness and early death. Persons diagnosed with schizophrenia are twice as likely to have chronic, life threatening physical disorders. Through collaboration Missouri DMH/DMS worked to improve the health outcomes and reduce the costs of the targeted patients in this project through sharing patient medical information and by providing clinical consideration alerts to both behavioral health and physical health clinicians and mental health case managers. Through its patient focused design MRM keeps providers and case managers informed of medical and psychiatric issues arising in their patient’s care. During the course of the MRM intervention, inpatient costs for patients diagnosed with schizophrenia were reduced by 6.15 million.

Current Status

The Health Care Optimization (HCO) is an enhanced version of that program which combines both the above MRM program with pharmacy management technologies allowing existing provider systems to proactively focus appropriate clinical interventions. Targeting Missouri HealthNet program patients with chronic behavioral and physical health co-morbidities the HCO service is designed to coordinate the physical health and behavioral health care of adults by identifying complex patients who have serious and persistent behavioral health disorders co-morbid with serious chronic physical health diseases. This complex population is at increased risk for poor health outcomes and high services cost.

HCO technology creates an integrated health profile (IHP) for each patient to:1) communicate with behavioral health and physical health providers, as well as case managers and other essential care providers, 2) the IHP includes comprehensive and current information across medical, behavioral, and pharmacy treatment and provides information to healthcare providers regarding these complex patients’ services utilization history, acute care history, pharmacy history and poor treatment adherence history, 3) the IHP also includes best practice prescribing guidance and timely medication adherence updates based on pharmacy claims.

The expected outcomes of the HCO program include:

  • Greater patient adherence to medication plans (physical and behavioral);
  • Fewer unplanned urgent, emergent and inpatient hospitalization events;
  • Lower overall health care costs per patient when compared to costs of comparable patients not involved in the HCO program; and,
  • A healthier patient with a better quality of life.