Medicaid, as the largest payer of addiction treatment benefits, is in a unique position to address the growing opioid addiction crisis (see As Opioid Epidemic Continues, Steps to Curb It Multiply, ‘You Want A Description Of Hell?’ Oxycontin’s 12-Hour Problem, and House, Senate Hope To Craft Quick Anti-Drug Abuse Compromise). As a result, OPEN MINDS conducted a survey of all state Medicaid programs to figure out what addiction treatment benefits are actually covered. What we found out – two states do not cover any addiction treatment, 48 states offer outpatient benefits, and only 22 states cover residential treatment. The question – why do so few states cover residential treatment?
The variation in the provision of residential treatment for addiction is largely due to IMD exclusion. States cannot be federally reimbursed for services provided to individuals between the ages of 21-64 in a facility with more than 16 beds and where more than half of individuals are being treated for a mental health or addiction disorder. To comply with federal regulations, residential treatment must be provided in a facility with less than 16 beds or states must use non-federal funds to cover services (see Medicaid & Children’s Health Insurance Program (CHIP) Programs; Medicaid Managed Care, CHIP Delivered in Managed Care, & Revisions Related to Third Party Liability).
In July 2015, CMS gave states the option to submit a 1115 waiver to improve the care and outcome of consumers with addiction disorders. The waiver includes a number of provisions, but most importantly allows states to include services previously not covered under Medicaid, such as residential treatment, in a facility with no bed limit. Thus far one state, California, has elected this option (California Expands Medicaid Addiction Treatment Benefit).
The other option is in the new partial repeal of IMD exclusion. Under the new Medicaid managed care final rule, MCOs may receive reimbursement for individuals ages 21-64 who receive services in an IMD. The service will be covered by state Medicaid programs and MCOs as an in lieu of service, meaning the MCO can deny treatment in an IMD to any individual, and individuals may refuse treatment in an IMD with no repercussions. This benefit will not be available for individuals enrolled in the FFS delivery system (see Medicaid Finalizes Managed Care Rules, Including Qualified End To IMD Exclusion).
What does the future hold? With more Medicaid managed care and the much-discussed opioid epidemic, we’re likely to see states use these options to expand coverage of residential treatment under these rule changes. However, utilization of residential is unlikely to expand dramatically. The majority of Medicaid spending for addiction treatment is used to provide outpatient services (see The U.S. Addictions Treatment Market: 22.2 Million With Addiction Issues & $24 Billion In Annual Spending). And studies have shown that the increase of managed care has resulted in more individuals receiving outpatient treatment rather than residential or detoxification-only treatment (see The Impact Of Managed Care On The Substance Abuse Treatment Patterns And Outcomes Of Medicaid Beneficiaries: Maryland’s Health Choice Program).
What addiction treatment is covered in your state Medicaid plan? For a state-by-state chart on the addiction benefits offered in each state be sure to check out: What Addiction Treatment Services Are Covered By State Medicaid Programs?: An OPEN MINDS Market Intelligence Report. This report answers a number of questions including:
- What Are The Addiction Treatment Coverage Requirements For State Medicaid Plans?
- What Is The Continuum Of Addiction Services Covered By State Medicaid Programs & How Are They Defined?
- What Addiction Services Are Covered By State Medicaid Programs?
- What Are The New Options For Providing Residential Treatment Services?
- What MAT Benefits Are Covered By State Medicaid Programs?
As the need for solutions to the growing addiction crisis grows, I expect we’ll see state Medicaid programs evaluate their addiction treatment benefit and we’ll see a fuller continuum of services offered. For more on the challenges of providing addiction treatment services for complex consumers, join us next month in New Orleans for The 2016 OPEN MINDS Strategy & Innovation Institute, where OPEN MINDS senior associate Steve Ramsland, Ed.D., will lead the session, “Addiction Treatment Transition? A Review Of The Emerging Models Replacing Residential Treatment,” featuring Linda Grove-Paul, LCSW, MPA, Vice President, Adult & Family Services, Centerstone of Indiana; and Maks Danilin, Strategic Account Executive, Aware Recovery Care, Inc.