DMHAS: MRO Home Page

Medicaid Rehab Option
Overview and Linkages

What is the Medicaid Rehabilitation Option?

Medicaid is a federal-state health insurance program for persons with limited income and/or disabilities. Medicaid allows states to use federal dollars to match state dollars for defined services. One category of Medicaid services incorporates rehabilitative, community-based services to persons with psychiatric and co-occurring psychiatric-substance abuse diagnosis. This category is known as the Medicaid Rehabilitation Option or MRO. Medicaid also pays for behavioral health services through the Clinic Option and through Targeted Case Management (TCM).  

The MRO services have the advantages of being reimbursed for delivery in clients’ natural settings as well as in offices. They focus specifically on assisting clients with gaining skills and resources that allow them to live and function as independently as possible.  

In Connecticut, the Department of Social Services (DSS) is the Medicaid agency that manages all Medicaid services, including MRO services. DSS is working with the Department of Mental Health and Addiction Services (DMHAS) in planning and overseeing MRO services. Currently in Connecticut the State uses the Clinic Option and Targeted Case Management for federal reimbursement and the future goal is the extension of the Medicaid Rehabilitative Option. 

How does Connecticut use the Medicaid Rehabilitation Option?

Connecticut currently has one MRO service: Residential Rehabilitation in Mental Health Group Homes. This service, which focuses on building skills and independence, began January 1, 2005. 

Connecticut is currently working to implement two more MRO services: Assertive Community Treatment and Community Psychiatric Support. These services are expected to be available in 2007.   

These two services have currently been available through a variety of program contracts through DMHAS that have been paid on a grant basis. With the switch to the MRO, services will be defined consistently across the state, rather than on a program-by-program basis, allowing clients to access similar services regardless of their geography.  The MRO services will be paid for on a fee-for-service basis depending on how many services are delivered to clients. One implication of the switch to the fee-for-service payment is that this method of reimbursement is more closely related to the needs of the clients at any given time. 

How does the MRO integrate with the DMHAS Recovery Initiative?

In September, 2002, DMHAS formally designated the concept of recovery as an overarching goal of the service system. Recovery is defined as: “a process of restoring or developing a positive and meaningful sense of identity apart from one’s condition and then rebuilding one’s life despite, or within the limitations imposed by that condition.”  This definition talks about an approach to care and the rebuilding of a self that is individualized and involved. Together; the DMHAS initiatives, a changing provider system and the client will bring about the changes that will be structured, long term and individually focused.  

DMHAS has supported this initiative through:

  • development of a Recovery Institute with many educational offerings,
  • rewarding of recovery best practices, and
  • encouraging the development of evidenced-based practices throughout the state. 

These recovery activities and events have served to underscore the commitment to changing the process of care and the move to a more person-centered approach.

(Follow the link to Recovery Initiative for more information.)

DMHAS has made a commitment to implement the MRO to support and reinforce the Recovery Initiative. Key areas of congruence include:

  • Treatment planning that incorporates client goals and strengths as key components
  • An emphasis on assisting clients to reach their highest level of functioning and independence
  • Client participation in the planning and delivery of services
  • An emphasis on providing services in settings and schedules of the client’s choice
  • Assisting the client to develop and use natural supports and support systems apart from the health care system
  • A focus on developing skills and strengths to succeed in natural environments, including school, work and home.
  • Services are delivered based on client need rather than program requirements. 

Because Medicaid is a health insurance program, certain requirements must be met for MRO services to be billed to Medicaid. Clients will participate with providers in developing treatment plans that focus on overcoming the effects of the psychiatric or co-occurring disorders, and billable Medicaid services must focus on the goals and objectives developed by the client and provider in the treatment plan. Not all services that a client desires or needs will be found within the MRO. DMHAS, and other community resources, will continue to offer an array of other services to meet needs beyond the MRO. 

Guiding Principles for MRO Implementation

To promote clear communication and guide consistent decisions and actions across implementation tasks, DMHAS articulated the following principles that will guide the operational implementation process for the MRO. 

Client  & Recovery

  • Rehabilitation focus will enhance recovery efforts.

  • Money follows the client and assists with aligning resources with client needs

  • Sufficient time and support will be provided to assist clients in transitioning to new services.

Provider Impact

  • Supports (technical assistance, systems, resources, and financial) will be offered to providers to transition and succeed, but organizations/management will need to make changes to align services with new requirements.

  • Efficient & effective providers will succeed and grow.

  • Some providers may shrink or change.

  • Changes in services will impact providers and staff; time and support (technical assistance, systems, resources, and financial) will assist providers in transitioning staff and finances.

Continuity of Care

  • Amount of services will vary based on client need.

  • Client need drives services rather than programs and program funding.

  • Minimizing disruption to client care is a priority.

  • Supporting providers prior to and through the immediate transition is important in minimizing disruption to clients.


  • Existing network of agencies will be grandfathered for a period of time. While agencies will be grandfathered, they may be providing different services than currently depending on client need.

  • Competition will promote client choice and quality

  • The best providers for these services will have a comprehensive array of services. Providers of a single-service must be aligned through contract with a more comprehensive provider.

  • Provider success will depend on performance, not history.


  • Existing state dollars can be used to provide additional services that cannot be funded by Medicaid

  • The priorities for the clinical management process are clinical need, managing access to care, and improving practice.


  • Build a data-driven system.

  • Build increased capacity to use client, provider and system data for decision making and performance monitoring.

How is the Implementation Being Planned?

DSS and DMHAS are working together to plan and manage an implementation process that will be as smooth as possible for clients and providers. The overall process is being guided by a Steering Committee co-chaired by Michael Starkowsky, Deputy Commissioner of DSS and Pat Rehmer, Deputy Commission of DMHAS. DMHAS has established an internal Implementation Team that focuses on coordinating the various activities and tasks. Additional workgroups include:

  • Client Profile Workgroup, focusing on outlining the needs of current system clients in order to:
    • To be able to understand how to define needed services
    • To be able to begin to put together a utilization plan
    • To be able to begin the process of estimating use and cost
    • To look at what affect these services and clients will have on the rest of the continuum.
    • To assist in the development and implementation plans for clients to transition into the newly defined services.
  • A Service Definition Workgroup that is reviewing and developing the descriptions of the ACT and Community Psychiatric Support services that can be reimbursed under the MRO.

  • Provider Readiness and Impact Workgroup that focuses on assessing provider readiness, and developing technical assistance and training to assist providers with being successful under the new definitions and reimbursement methodologies. This workgroup will look at operational, transitional, and clinical aspects of provider readiness.

  • Clinical Management Workgroup, focusing on tools to ensure that MRO services are available statewide and are consistent in quality and approach with approved definitions.

  • DMHAS is also assembling some internal work teams to focus on financial strategies for supporting the system’s rehabilitation and recovery goals, and paying for services for non-Medicaid clients. A specialty team will focus on how state-operated providers will bill under the MRO. Another team will focus on data needs to support the implementation and the ongoing operations of the changed system.

Major change is slow, rarely linear and requires patience and perseverance by all participants.  This change will also need structure and information. DMHAS will offer open forums and trainings as this process continues and build a communication system that helps to increase the skills of all. 

DMHAS is committing to continue to foster recovery growth and will use the Rehab Option to do this;  this will also take a commitment from the providers and the clients to work with the issues that specifically affect them.  Together; the DMHAS initiatives, a changing provider system and the client will bring about the changes that will be structured, long term and individually focused.  

Proposed MRO Agency List for ACT and CS

The Department has concluded an initial analysis of private not-for-profit agencies and programs that are eligible for inclusion in the second phase of the Medicaid Rehabilitation Option (MRO) implementation. The list below represents our current assessment of DMHAS-contracted programs that meet the criteria for inclusion in the ACT/CSP Phase of the Medicaid Rehabilitation Option. The list continues to be updated and reviewed as new information is received. If you believe one of your organization’s programs should be included or excluded from this list, please contact Jim Siemianowski at DMHAS, (860) 418-6810.  

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Content Last Modified on 5/5/2016 2:32:31 PM