Lessons From Medicaid’s Divergent Paths On Mental Health And Addiction Services

Abstract

Over the past fifty years Medicaid has taken divergent paths in financing mental health and addiction treatment. In mental health, Medicaid became the dominant source of funding and had a profound impact on the organization and delivery of services. But it played a much more modest role in addiction treatment. This is poised to change, as the Affordable Care Act is expected to dramatically expand Medicaid’s role in financing addiction services. In this article we consider the different paths these two treatment systems have taken since 1965 and identify strategic lessons that the addiction treatment system might take from mental health’s experience under Medicaid. These lessons include leveraging optional coverage categories to tailor Medicaid to the unique needs of the addiction treatment system, providing incentives to addiction treatment programs to create and deliver high-quality alternatives to inpatient treatment, and using targeted Medicaid licensure standards to increase the quality of addiction services.

Achieving Mental Health Care Parity Might Require Changes In Payments And Competition

“…Targeted case management and the rehabilitation option in Medicaid gave states a way to include medication management, assertive case management, and other services for people with mental health disorders. 14 States prefer Medicaid instead of direct state funding to take advantage of federal financial participation.…”

“…Because Medicaid has had a less generous definition of disability attributable to addiction and less generous coverage of addiction services, it has played a smaller role in funding treatment for addiction and substance use disorders compared to its role in mental health. 14 The ACA might be changing this through Medicaid expansion for US citizens with income up to 138 percent of the federal poverty level and extension of federal parity rules to Medicaid managed care plans. 15 Medicaid spending for substance use disorders is projected to grow to $12 billion by 2020, making Medicaid the largest US payer for addiction services.…”

Substance Use Treatment Provider Behavior and Healthcare Reform: Evidence from Massachusetts

“…1 Thus, relative to general healthcare (for which public payers provide 49% of the financing), SUD treatment is heavily reliant on public funding. The financial responsibility of public payers is predicted to rise with full implementation of the ACA (Andrews et al, 2015b).…”

Survey Highlights Differences In Medicaid Coverage For Substance Use Treatment And Opioid Use Disorder Medications

“…5,6 Yet little is known about the specific services state Medicaid programs cover. The essential health benefits (ten categories of services health plans must cover under the ACA) require state Medicaid expansion programs to include coverage for treating substance use disorders in their alternative benefit plans, but the ACA does not specify which services must be included.…”

“…9,10 As Medicaid is poised to become the largest payer of substance use disorder treatment in the United States, 11,12 such decisions are also likely to influence whether treatment providers decide to offer particular services. 5,13 Given the importance of Medicaid substance use disorder benefit policies, our study compared state decisions for such coverage against American Society of Addiction Medicine (ASAM) clinical guidelines for substance use disorder services.…”