Roles of Psychiatric-Mental Health Nurses in Managed Care

Managed care has become a financing reality in healthcare as payers have developed strategies to curtail costs and improve the provision of care. Managed care is defined as "a system of managing and financing health care delivery to ensure that services provided to managed care plan members are necessary, efficiently provided and appropriately priced. Through a variety of techniques, such as pre-admission certification, concurrent review, financial incentives or penalties, managed care attempts to control access to provider sites where services are received, contain costs, manage utilization of services and resources, and ensure favorable patient outcomes. The term covers a broad spectrum of arrangements for health care delivery and financing, including managed indemnity plans (MIP), health maintenance organizations (HMO), preferred provider organizations (PPO), point of service plans (POS), as well as direct contracting arrangements between employers and providers" (Hart, 1995). Assumptions about managed care include:

1. Managed care is based on a health (rather than illness) paradigm.
2. It increases client access to appropriate (mental health) services.
3. It assures cost effectiveness through the development of clear boundaries with regard to targeting, planning and delivering needed (mental health) services.
4. It assures quality control through a utilization review process.
5. It offers availability of a choice of providers based on the type of care required (ANA, 1993).
6. Support for a meaningful participation of consumers and families in the redesign, implementation, evaluation, and monitoring of the managed care system is encouraged (NAMI, 1995).

At the beginning of 1996, it was estimated that more than 124 million Americans, or 44% of the population, were covered by some type of managed care plan. It is predicted that within the next ten years, 90% of the health care in the United States will be provided in a managed care environment. Managed care is also making headlines because it is driving massive changes in professional practice, the definition of mental disorders, the nature of professional accountability, the allocation of professional resources, and the relationship of mental health professionals to one another (Shore & Beigel, 1996). The goal of managed care is not only to lower costs but to ensure that maximum value is received from the resources used in the production and delivery of health care services to the population (Hicks, Stallmeyer, & Coleman, 1993).

The American Psychiatric Nurses Association believes that registered nurses in both the generalist and advanced practice roles utilize culturally competent standards in their practice and bring great value to the managed care arena through their rich blend of knowledge, skills and expertise (WICHE, 1997). It is essential that managed care companies recognize the considerable expertise psychiatric-mental health nurses contribute to the health care setting and maximize the full potential of nursing roles in order to best improve the process and outcomes of behavioral health care provided to consumers and their families across the life span.

Psychiatric mental health nurses at both the generalist and advanced practice level are uniquely qualified to serve in both indirect and direct care roles within managed caresystems. Nurses alone among the various mental health disciplines combine the biopsychosocial knowledge, psychopharmacological competency, physical and psychiatric assessment skills with an intrinsic perspective of patient advocacy and 24-hour accountability. Psychiatric nurses are expert at evaluating complex psychiatric, substance abuse and physical health needs and problems of patients over the life span. Nurses assess and treat psychosocial consequences of physical illness (APNA, 1997). Further, the American Nurses Association "…endorses the utilization of psychiatric-mental health nurses as highly qualified professional participants in both indirect and direct care roles within psychiatric-mental health managed care systems. As the managed care industry evolves, we believe that it will be important for the professional to monitor the operationalization of the managed care concept to assure that its original objectives are fulfilled" (ANA, 1998). While there is great variability of nursing activity based on service setting and geographic location, the advanced practice nurse and generalist nurse may assume a number of roles in managed care systems. These include (Stuart, 1997):

Psychiatric-Mental Health Nurse – Nurses with various levels of preparation serve as direct care providers in contracted facilities and practices. These roles includestaff nurses, managers and administrators, practitioners in psychiatric home health and community mental health settings, primary care providers and independent providers of psychotherapy to individuals, groups and families across the life span. While the advanced practice registered nurse, psychiatric-mental health (APRN-PMH) has prescriptive authority in most states, all registered nurses administer and monitor pharmacologic agents and monitor their effects.

Care Manager
Nurses in this role assess patients and develop treatment plans, coordinate resources and care provided by others. The Care Manager also manages patient needs and resources episodically and is skilled in managing psychiatric rehabilitation as well as relapse prevention.

Assessment, Evaluation, Triage and Referral Nurse
In this role, the nurse evaluates patients in direct encounters or by telephone in order to triage the patient to the most appropriate level of care, including referrals to credentialed providers, contracted facilities and community resources.

Utilization Review Nurse
Many managed care companies employ psychiatric nurses to function as utilization reviewers in which they review aspects of the patient’s care and influence decisions about treatment assignment. In this role they serve as "gatekeepers" to mental health services.

Patient Educator
Some settings hire nurses with responsibility assigned to them for patient and family education. This role has grown with the growing emphasis that is being placed on patient compliance and disease management programs. In public sector programs, this role could include prevention, education and outreach.

Risk Manager
Nurses who work as risk managers are charged with the task of decreasing the probability of adverse outcomes related to patient care. They engage in identifying risk factors, individual and system-wide problems, corrective actions and the implementation of strategies to reduce risk and prevent loss.

Chief Quality Officer
Nurses have assumed primary responsibility for formulating and implementing comprehensive quality management and improvement programs for managed care companies. They engage in training other staff on-site and synthesize data related to performance improvement, outcomes management and other health services research activities.

Marketing and Development Specialist
Some psychiatric nurses work in the managed care growth areas of sales (proposal writing), marketing and program development. In these roles, they interface with consumers, employers, providers and regulators and they make recommendations for furthering the mission and goals of the managed care organization.

Corporate Managers and Executives
Psychiatric nurses are also present in middle management positions, as well as senior management positions where they participate in the development of corporate policy and strategic planning. Nurses hold positions in various departments including: Provider Relations, Quality Management, Care Management/Clinical Operations, Service Operations and Clinical/Medical Affairs.


American Nurses Association. (1993) Position Statement: Psychiatric Mental Health Nursing and Managed Care. Internet:

American Nurses Association. (1998) ANA board adopts nursing’s principles for managed care environment. The American Nurse. January/ February, page 19.

American Psychiatric Nurses Association Brochure (1997) Advanced Practice Registered Nurses in Psychiatric and Mental Health Care. Washington, DC: American Psychiatric Nurses Association.

Hart, S. (1995) ANA Managed Care Curriculum for Baccalaureate Nursing Programs. Washington, DC: American Nurses Association Publishing.

Hicks, LL, Stallmeyer, JM, Coleman, JR. (1993) Role of the nurse in managed care. Washington, DC: American Nurses Association.

National Alliance for the Mentally Ill. (1995) NAMI’s principles for managed care. [Brochure]. Arlington, VA: Author

Shore, M., Beigel, A. (1996) Sounding board: the challenges posed by managed behavioral healthcare. New England Journal of Medicine, 334:116.

Stuart, G.W. (1997) Professional associations and managed care: How four provider groups are helping their members. Behavioral Healthcare Tomorrow, August, pp. 41-44, 85.

WICHE. (1997) Cultural competence standards in managed mental health care for underserved/ underrepresented racial/ ethnic groups. (WICHE no. 97MO4762401D). Boulder, CO: Author.

Internet Resources

Agency for Health Care Policy and Research (AHCPR) (

American Association of Health Plans (

American Nurses Association (

American Psychiatric Nurses Association (

Institute for Behavioral Healthcare (

National Committee for Quality Assurance (NCQA) (

Psychotherapy Finances and Managed Care Strategies (

American Managed Behavioral Healthcare Association (AMBHA) (

August 9, 1998


Chisholm, M. Howard, Boyd, M., Clement, J., Hendrix M., & Reiss-Brennan, B. (1997). Quality indicators for primary mental health within managed care: A public health focus. Archives of Psychiatric Nursing, 11 (40), 167-181.

Goodman, M., Brown, J.A., Deitz, P.M. (1996) Managing Managed Care II: A Handbook for Mental Health Professionals (Second Edition). Washington, DC: American Psychiatric Press.

Haber, J. & Billings, C. (1995) Primary mental health care: A model for psychiatric-mental health nursing. Journal of the American Psychiatric Nurses Association, 1, 154-163.

Mason, D.J., Cohen, S.S., O’Donnell, J.P., Baxter, K. and Chase, A.B. (1997) Managed care organizations’ arrangements with nurse practitioners. Nursing Economic$, 15 (6), 306-314.

Novartis. (1997) A Thru Z: Managed Care Terms. Bronxville, NY: Medicom International.

Your mental health rights: A joint initiative of mental health professional organizations (1997). [Brochure] American Association for Marriage and Family Therapy, American Counseling Association, American Family Therapy Academy, American Nurses Association, American Psychiatric Nurses Association, American Psychological Association, Clinical Social Work Federation, & National Association of Social Workers.

Authors: Michele Zimmerman, MA, RNCS, Luc R. Pelletier, MSN, RN, CS, CPHQ, Gail Stuart, PhD, RN, CS, FAAN

Managed Care Task Force Reviewed