Medicaid Coverage for Opioid Treatment: Benefits for States

1. Medicaid Coverage for Opioid Treatment: Benefits for States Paul N. Samuels, Legal Action Center March 29, 2017

2. The Old Model: Grants and Client Fees • Unlike Rest of Health Care: Federal Block Grant, State Appropriations and Clients Fees • Disadvantages: • Highly Dependent on Political Environment • Highly Dependent on Economic Environment • Static: Doesn’t Grow with Need or Demand • Advantages: • ???????? (Familiarity)

3. The New Model: Medicaid, Commercial Insurance and Parity • Parity required for most commercial insurance (large group and exchange) and Medicaid managed care and expansion • ACA private insurance enrollment: +12.7 million enrollees • Medicaid plus Medicaid expansion: • Most states provide Medicaid reimbursement to OTPs • 28 states and DC have elected to expand their Medicaid population (Federal government pays enhanced match for expansion population—100% through 2016, 90% in 2019 and beyond)

4. The New Model: Medicaid, Commercial Insurance and Parity (cont’d) • Advantages: • Funding flows with rest of health care • Since Medicaid an entitlement, funding increases with need/demand • Increased Medicaid funding frees up block grant and state appropriations for other (hopefully SUD) needs • Parity requires much better coverage for SUD • Disadvantages/Challenges: • Providers need to be able to bill and otherwise comply • Payors have to work with OTPs

5. Mental Health and Substance Use Disorder Parity • Mental Health Parity and Addiction Equity Act requires parity for SUD and MH with other medical conditions in: • Financial requirements • Quantitative treatment limitations • Non-quantitative treatment limitations • Applies to traditional Medicaid if managed care, all Medicaid expansion (managed care and fee-for-service), and most commercial insurance

6. Required Coverage of SUD and MH Services under the Affordable Care Act • The ACA dramatically improves coverage for and access to substance use disorder (SUD) and mental health (MH) services • Under the ACA, SUD and MH services are essential health benefits which must be covered at parity (Mental Health Parity and Addiction Equity Act) with other covered medical benefits • Successful advocacy by Coalition for Whole Health and others

7. Current Health Care Reform Debate • Much of the current structure, but not all, is being debated now, including: • Will Medicaid expansion continue? • Will SUD and MH coverage continue to be an “Essential Health Benefit” that must be covered at parity with other illnesses? • Opioid epidemic a major issue in the discussion • Parity for Medicaid managed care will remain the law • CMS has stated it will provide states more flexibility

8. Using Medicaid to Expand Access to Care for People in the Criminal Justice System • Huge opportunities • Recognition of the potential for cost-savings and improvement of health and criminal justice outcomes • Range of options to improve coverage and access around the country • Coverage for SUD and MH care at parity • Great opportunity for many newly Medicaid-eligible individuals who are justice-involved but also significant work in states not currently expanding their Medicaid population

9. Criminal Justice Opportunities: Seamless Medicaid Coverage • Medicaid can be suspended during incarceration • The federal government (CMS) has encouraged states to suspend not terminate Medicaid • States that suspend Medicaid upon an individual’s incarceration: • CA, CO, FL, IA, MD, MN, NY, NC, OH, OR, TX, WA • The enhanced federal Medicaid share in expansion states presents an even greater opportunity for cost-savings • Reforming state policies to promote seamless Medicaid coverage will significantly help with continuity of care into the community

10. Medicaid, Incarcerated Beneficiaries, and the Inpatient Exclusion • Medicaid can pay for services when the incarcerated individual is a “patient in a medical institution” • When they’ve been admitted as an inpatient in a community-based hospital, nursing facility, juvenile psychiatric facility, or intermediate care facility for at least 24 hours • All medically necessary Medicaid covered services provided to that individual while admitted can be billed to Medicaid • Federal Medicaid dollars can pay for these services if the state’s policies allow for that

11. State Cost-Savings by Billing Medicaid for Inpatient Care • States that bill Medicaid for inpatient care: • AR, CA, CO, DE, LA, MI, MS, NE, NY, NC, OK, PA, VT, WA • A number of states have recognized the huge potential for cost savings when they bill for inpatient care • North Carolina saved $10 million in the first year (2011) • California saved about $31 million in FY 2013 • New York estimated in 2012 that it could save $20 million annually if the state billed Medicaid for eligible inpatient care • CSG Justice Center brief: https://csgjusticecenter.org/wp-content/uploads/2013/12/ACA-Medicaid-Expansion-Policy-Brief.pdf

12. Medicaid Eligibility and Enrollment for Justice-Involved Individuals • Although federal rules prohibit payment for services for incarcerated individuals, this has no effect on Medicaid eligibility or enrollment • There is no federal prohibition against screening for eligibility and enrolling during incarceration • HHS has clarified “corrections department employees…are not precluded from serving as an authorized representative of incarcerated individuals for purposes of submitting a (Medicaid) application on such an individual’s behalf” • Enrollment can and should happen at all stages of justice system involvement

13. Health Homes and the Criminal Justice System • Twenty-six states (and DC) have an approved Health Home State Plan Amendment or are working with CMS toward approval • Includes ten states that are not currently expanding their Medicaid population • New York is working to include justice-involved individuals through their initiative • Rhode Island is focusing on substance use disorders, including opioid use disorders

14. Benefits of Using Medicaid for Opioid Medication-Assisted Treatment • Better Health Outcomes: Reduced drug use • Better Public Safety Outcomes: Reduced recidivism and incarceration • Reduced Health Care Costs: Washington State study findings that costs of SUD treatment offset by health care savings in first year and overall savings in subsequent years

15. Maximizing the Opportunities Before Us • Critical need for payors, regulators and providers to work closely together: State Medicaid agency, the SSAs for SUD and MH, and OTPs • Huge interest in criminal justice system – drug courts and other community courts, jails, prisons, reentry and community supervision programs – in better engaging with the SUD and MH service provider network • Goal: Expand care by learning from early adopters, sharing best practices, and shaping existing models to work for each system

16. We Are Here to Help Legal Action Center www.lac.org (212) 243-1313