Feds, states seek to end Medicaid's limits on substance abuse care

States and some federal officials are working harder to end some limits on Medicaid reimbursements for behavioral health and substance abuse treatment in the face of the nationwide opioid addiction crisis.

Earlier this month, a bipartisan group of senators introduced legislation that eases federal restrictions on Medicaid reimbursement for substance use disorder treatment centers. The bill would allow centers with up to 40 beds to receive reimbursement from Medicaid for stays of up to 60 consecutive days.

Medicaid has refused to pay for care from so-called institutions of mental disease for beneficiaries 21 years old and older since its inception. Most residential treatment facilities for mental health and substance-use disorders that have more than 16 beds did not qualify for Medicaid reimbursement.

"It's no exaggeration to say that an available bed at a treatment facility could mean the difference between life and death. In fact, one of the most tragic circumstances is when someone is ready to seek help and they're turned away because of a lack of resources," Sen. Angus King (I-Maine) said in a statement.

King is one of the co-sponsors of the bill known as the Medicaid Coverage for Addiction Recovery Expansion Act, or Medicaid CARE Act. It's unclear if the law will ever be enacted, despite its bipartisan support, as Republican lawmakers and President Donald Trump are actively seeking ways to reduce Medicaid spending.

The lawmakers' proposal comes after several states have successfully lobbied the CMS to lift these restrictions for their Medicaid programs. California, Maryland, Massachusetts and Virginia have succeeded in getting waivers to remove the bed-limit restriction for Medicaid funding.

A federal solution could eliminate inefficiencies and differences in state requests and create a single standard for behavioral and substance abuse treatment reimbursement, according to Dr. Jonathan Chen, an instructor at Stanford University School of Medicine who has researched opioid abuse.

"Likely, inefficiencies will arise from redundant or conflicting efforts, and potential inequity when different states come up with different approaches that are not equally effective," Chen said.

Last year, the CMS finalized a policy allowing Medicaid managed-care plans to pay the facilities for short-term stays lasting 15 or fewer days in a month. States such as Arizona and Wisconsin now have, or are planning to submit, waivers to remove the day limit and expand the new policy to their fee-for-service populations.

The CMS has estimated that 13.8% of adults ages 21 to 64 on Medicaid experience serious substance abuse disorders. The Kaiser Family Foundation has found that 3 in 10 people who are addicted to opioids are in the Medicaid program.

National data also shows that Medicaid members are prescribed opioids at twice the rate of non-Medicaid members and are at three-to-six times the risk of prescription opioid overdose as those not covered by Medicaid.

"The increased effort at the state and congressional level is essential to address opioid addiction among the Medicaid population," said Dr. Katherine Neuhausen, chief medical officer for Virginia's Medicaid agency.

State and federal efforts to expand care to mental health facilities may be rendered moot in the coming weeks if the American Health Care Act becomes law, according to Brendan Saloner, an addiction researcher and assistant professor at the Johns Hopkins Bloomberg School of Public Health.

The bill, which passed the House last month, calls for more than $800 billion in cuts to the Medicaid program over a 10-year period. Those cuts would make it impossible for states to pay for additional mental health and substance abuse care, he said.

"AHCA creates a lot of uncertainty for states and could seriously hamper progress in using Medicaid to improve access to opioid use disorder treatment," Saloner said.

With cuts of that size, it's unlikely that states could continue to afford to have their beneficiaries treated in these facilities, according to MaryBeth Musumeci, an associate director at the Kaiser Family Foundation's program on Medicaid and the uninsured. An average inpatient weekly stay can range from $4,000 to $6,000 or even more.

"States are unlikely to come up with the money lost with the passage of that legislation," Musumeci said.