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In July 2015, the Centers for Medicare & Medicaid Services (CMS) released a new Medicaid 1115 demonstration waiver opportunity for states, generally known as substance use disorder (SUD) delivery system transformation. Under the delivery system, transformation states are encouraged to better identify consumers with substance use disorder, improve access to treatment, provide a comprehensive and effective array of services, and use quality metrics to evaluate the success of demonstrations. As part of the demonstration for participating states, CMS will waive the Institutions for Mental Diseases (IMD) exclusion rule that does not allow coverage of services for consumers aged 21-64 in facilities with 16 or more beds.

This report provides a comprehensive analysis of the financing and delivery systems of all states that have adopted or are considering adopting an 1115 SUD demonstration waiver. The analysis includes a review of the new addiction treatment benefits that have been added to state Medicaid plans, a look at the geographic availability of the new services, an evaluation of how states are using the ASAM criteria, and an exploration of the quality measures to be used to evaluate the demonstration.

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