States Seek Medicaid Dollars for Addiction Treatment Beds

By: - April 5, 2017 12:00 am

Anthony Green writes a letter in his room at Gaudenzia, a drug and alcohol treatment center in Baltimore. Maryland is one of four states with federal permission to use Medicaid dollars to expand residential addiction treatment in response to the opioid epidemic.

© The Pew Charitable Trusts

BALTIMORE — Anthony Green says he woke up one morning in January and decided to quit drinking. “I said to myself, ‘If I want something better, I’ve got to do better.’ ” That’s what landed him at Gaudenzia, a residential drug and alcohol treatment center here in North Baltimore.

Green, 38, went through alcohol withdrawal on his own and two weeks later walked into Gaudenzia’s recently constructed one-story gray and white clapboard building. He was admitted the same day and the city agreed to pay his bill through a limited grant for city residents.

“Anthony was extraordinarily lucky,” said Greg Warren, regional manager of Gaudenzia’s treatment centers in Maryland, Delaware and Washington, D.C. “Walking in and getting admitted the same day almost never happens.

“That motivational moment Anthony had is fleeting,” Warren said. “If you don’t capture that moment, people will disappear.”

But in the throes of an opioid epidemic that killed more than 33,000 people in 2015 alone, the nation’s supply of residential treatment slots falls far short of the number needed to serve everyone who walks in, gets dropped off by police, or is transferred from a hospital or crisis center. Waitlists persist almost everywhere, primarily because of a growing number of people addicted to heroin and prescription painkillers.

To boost the number of beds available for low-income residents, the federal government has granted California, Maryland, Massachusetts and New York a waiver of an obscure Medicaid rule that prohibits the use of federal dollars for addiction treatment provided in facilities with more than 16 beds. Seven other states — Arizona, Indiana, Illinois, Kentucky, Michigan, Utah and Virginia — are seeking similar permission.

In March, the Trump administration’s new Health and Human Services secretary, Tom Price, told governors that the agency would continue the Obama administration’s waiver policies for residential facilities with 16 or more beds.

For Gaudenzia, which has four residential treatment centers in Maryland, the waiver is a game changer, Warren said. “It’s going to explode access.”

An Outdated Rule

The 16-bed provision was originally intended to discourage investment in what the 1965 Medicaid law called “institutions for mental disease,” and to instead promote the expansion of smaller, community-based mental health and substance abuse centers.

But for Gaudenzia and other behavioral health providers struggling to meet the surging demand for addiction services, the rule has curtailed much-needed federal funding to accommodate all the people who needed help.

Sidestepping the 16-bed prohibition means millions in new federal Medicaid dollars will flow to treatment centers that now rely on limited state and local grants.

The federal government is encouraging all states to seek a waiver of Medicaid’s residential treatment rule, but only if the care is offered as part of a comprehensive set of addiction services for low-income people.

In addition to offering inpatient treatment to patients who need it, state Medicaid addiction programs must include all available addiction medications, intensive outpatient therapy, recovery support services such as job training and housing, substance abuse prevention programs, case management and physical health services.

States also must prove that adding more residential treatment slots to the list of Medicaid treatment options will cost no more than continuing to prohibit it.

That should be easy, said Chuck Ingoglia, senior vice president for public policy at the National Council for Behavioral Health, which represents treatment providers. The long-term cost of not treating people with addictions far exceeds the cost of all levels of treatment, including residential care.

According to the National Institute on Drug Abuse, every dollar invested in addiction treatment yields a return of up to $7 in reduced drug-related crime and criminal justice costs. When health care savings are included, the return on investment can exceed $12.

Rising Demand

An estimated 22 million Americans have a drug or alcohol addiction that needs treatment, yet only one in 10 receive it. Because loss of income is a symptom of addiction, inability to pay is among the biggest barriers.

The Affordable Care Act, with its Medicaid expansion to non-elderly low-income adults — a group that is more susceptible to substance abuse than the general population — went a long way to making treatment more available, at least in the 31 states and Washington, D.C., where the option has been adopted.

Medicaid expansion, plus the federal health law’s requirement that all insurance carriers reimburse for addiction services, along with the Mental Health Parity and Addiction Equity Act’s requirement that addiction treatment be paid for at the same level as medical and surgical services, together hold out the potential that billions of dollars for addiction treatment will be available in the years ahead.

Lifting the 16-bed limit will free even more federal money, making it possible for addiction treatment providers to expand their capacity, Ingoglia said. But, he said, it’s not likely to result in treatment on demand overnight.

California was the first state to receive a federal Medicaid waiver, in December 2015. More than two years later, California’s counties, which operate separate Medicaid programs, are still ironing out details on reimbursement rates and quality standards.

Maryland’s waiver program, approved in December, is slated to take effect July 1. In the meantime, the state will set licensing and staffing requirements, and develop reimbursement rates and billing rules.

Gaudenzia’s Warren said it’s uncertain whether the rates Maryland adopts will adequately cover new staffing requirements. But he already has plans to triple the number of beds available for people who want to withdraw from the substances they are addicted to.

That’s a critical first step in the path to recovery that has been a bottleneck here in Baltimore and in many other places. Next, he said, Gaudenzia plans to double the number of slots for 28-day residential therapy following withdrawal.

In Massachusetts, the new waiver program is projected to increase the number of residential treatment beds by 20 percent in the first three years, said Vic DiGravio, CEO of the state Association for Behavioral Healthcare, which represents treatment providers. Unlike Maryland, Massachusetts has an adequate number of detox beds for people who want to withdraw from drugs or alcohol, but not enough beds for intensive 28-day treatment after that.

“We have a four-lane highway leading into detox,” DiGravio said. “But it quickly turns into a one-lane gravel road into lower levels of residential care.” As a result, too many people cycle through detox, he said. Adding more follow-up residential treatment slots will lower patient relapse rates, which ultimately will save the state money.

Not for Everyone

In Baltimore, Green voluntarily committed himself to six months of residential care to beat his alcohol addiction. He said he was drinking a fifth of vodka and at least two 40-ounce beers every day, and his life was going downhill fast.

He tried to stay sober after a three-year stint in prison that ended in 2008. But the frustration of repeatedly being rejected for jobs because of his criminal record led him to drink again, he said.

“This is the first time in my life I’ve been so sincere about anything. I want to get back on track and move my life forward,” Green said. Staying at Gaudenzia and attending motivational classes six hours every day feels right, he said.

“They push you to want better and achieve your best even if you don’t believe you can do it. Outside these doors, that doesn’t happen.”

But not everyone with a drug or alcohol addiction wants or needs residential treatment. Unlike other addictive substances, including cocaine and amphetamines, opioid addiction can be kept at bay with medications and outpatient therapy. Medications also can successfully treat alcohol addiction, but depending on a patient’s home environment and support system, medications alone may not work.

For Green, staying away from his community made the most sense. “I don’t want anyone to distract me,” he said. “I have to distance myself away from friends because a lot of my friends don’t want what I want, and I know that road all too well.”

Although greater use of addiction medications, including methadone, buprenorphine and Vivitrol, has been advocated at the federal and state level, residential care is still considered an essential treatment option for many.

It can be the only effective option for people with addictions to alcohol, cocaine, amphetamines or marijuana, for example. And it is often needed for people with opioid addictions who are also hooked on other substances, according to treatment guidelines set by the American Society of Addiction Medicine.

In general, publicly funded residential care is recommended for people at high risk of harm from their addictions, including those who have recently been released from jail or prison, pregnant women, people who have mental health conditions and the homeless.

In public hearings on the Medicaid waiver in Maryland, state Medicaid Director Shannon McMahon said, “We heard no objections, only screaming loud supportive voices.”

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Christine Vestal

Christine Vestal covers mental health and drug addiction for Stateline. Previously, she covered health care for McGraw-Hill and the Financial Times.