By: Loren Anthes, Adam White
The opiate crisis in Ohio has precipitated many policy conversations about how to curb opiate-based mortality, provide better treatment and encourage recovery. Providers, lawmakers and The Center for Community Solutions have all looked at the ways in which Medicaid policy could be leveraged to address this need. As we have written about previously, the General Assembly has looked to 1115 demonstration waivers as a way to experiment with Medicaid policy, and the opiate epidemic is not immune from such consideration.
Section 1905(a)(B) of the Social Security Act prohibits the utilization of federal financing for care provided to individuals with a mental health or substance use disorder in inpatient, and residential, treatment facilities that have more than 16 beds. These facilities, known as Institutions for Mental Diseases (IMDs), have been traditionally excluded from Medicaid reimbursement because the federal government had seen the provision of this care as the responsibility of the state, there were concerns about the institutionalization of individuals with these health conditions and because of the high cost of treatment. However, despite this long standing policy, many states have leveraged 1115 authority to provide services to individuals with Substance Use Disorders (SUDs) and the Centers for Medicare and Medicaid Services (CMS) has issued guidance to assist states in the development of such approaches. Given the exclusion of the services today, and the requirement that states meet a standard of budget neutrality with 1115 waivers, it is worthwhile to explore how states are resolving the goal of greater access with the requirement of controlling costs and enforcing the exclusion.
…it is worthwhile to explore how states are resolving the goal of greater access with the requirement of controlling costs and enforcing the exclusion.
Twenty states have submitted some level of 1115 waiver that increases behavioral health services for individuals with SUD. When reviewing the applications’ provisions that deal with budget neutrality, we saw two distinct patterns in waiver design. First, some states treated the population who would receive benefits as a distinct category, outlining costs as a “hypothetical” population. A hypothetical population in Medicaid represents individuals who could conceivably be covered through a State Plan Amendment, but will instead be offered coverage strictly through the waiver. Under this approach, SUD expenditures are typically limited to a cap determined by a “supplemental” budget neutrality test based upon the state’s estimates for what these services would have cost had they previously been included in the State Plan. It is important to note that CMS does not permit states to accrue budget neutrality “savings” by spending beneath these caps for hypothetical populations. Second, we saw a pattern where states would provide these services by including the population as one element in a larger waiver, thus achieving lower costs in the aggregate. We termed this approach “universal” as the budget neutrality standard is met through a comprehensive spending estimate, as opposed to one that isolates the IMD population.
As with other 1115 waivers, CMS has a few set expectations for states.
As with other 1115 waivers, CMS has a few set expectations for states. This includes the exclusion of room and board for reimbursement, the requirement to develop an implementation plan and the utilization of nationally recognized, evidence-based criteria for services, typically established by the American Society of Addiction Medicine (ASAM). With these standards, CMS is attempting to make clear that states must contemplate services in a continuum, so that community-based supports are a primary feature in addressing the treatment needs of individuals with addiction disorders. These standards are consistent with the goals of the Mental Health Parity and Addiction Equity Act (MHPAEA) which seeks to create equal access to behavioral health services and physical health services, in regards to coverage and reimbursement.
Ohio is still in the throes of an addiction-based public health crisis and all options should be put on the table.
Ohio is still in the throes of an addiction-based public health crisis and all options should be put on the table. With that said, there are still a number of tools available to the state that should be explored before a lengthy 1115 waiver process. The Ohio Department of Insurance recently published its Mental Health Parity Report. The report details the agency’s role in enforcing compliance with federal and state parity laws by insurers, though it still remains to be seen how stakeholders will view the content of the document. The Kasich administration should also consider issuing additional guidance to educate providers and the public about how they are able to take advantage of the federal managed care rule’s allowance for broader access to inpatient treatment of behavioral health. To explain, this rule allows managed care organizations to reimburse IMDs in a time-limited way, which is a potential access workaround relative to a comprehensive waiver. According to information provided by the state, Ohio is already reimbursing residential services based on ASAM criteria (see table 2 below).
Further, as the state implements behavioral health redesign, it should provide guidance to hospital systems and the public as to how hospitals are able to deliver community-based behavioral health services. Previously, hospital systems were not able to provide the same services as Community Behavioral Health Centers (CBHCs). As a result of redesign, hospitals are now able to provide greater outpatient services. The state should make clear how hospitals can take advantage of these new capabilities and how those capabilities could link to inpatient settings. Finally, the state should conduct a needs assessment of current capacity in residential treatment. Presently, there is no authoritative resource on residential treatment availability in terms of beds and locations. Advocates, providers and the administration would be well-served by a comprehensive landscape of this benefit to help inform the policy direction moving forward. Not only could this assist with the development of a waiver, it could also demonstrate one may not be needed if the proper supports are sufficient.
TABLE 1: STATE APPROACHES TO IMD WAIVERS & BUDGET NEUTRALITY
| State | Waiver Status | Services Covered | Budget Neutrality Approach | Key Facts |
|---|---|---|---|---|
| California | Approved | SUD | Hypothetical | · Medicaid beneficiaries receiving SUD treatment are treated as a hypothetical eligibility group, including those who are short-term residents in IMDs. |
| · The state expects healthcare costs to decrease among comparable patients with SUD post-waiver implementation due to reduced inpatient and emergency department use. | ||||
| · SUD PMPM expenditure cap is $2,913 for demonstration year ending June 30, 2019. | ||||
| Indiana | Approved | SUD | Hypothetical | · SUD short-term services are covered as a hypothetical eligibility group, with spending caps determined by a supplemental budget neutrality test. |
| · State must not accrue budget neutrality “savings.” | ||||
| · SUD PMPM expenditure cap is $6,835 for demonstration year ending December 31, 2018. | ||||
| Kentucky | Approved | SUD | Hypothetical | · SUD short-term services are covered as a hypothetical eligibility group with spending caps determined by a supplemental budget neutrality test. |
| · State must not accrue budget neutrality “savings.” | ||||
| · SUD PMPM expenditure cap is $1,502 for demonstration year ending June 30, 2019. | ||||
| Louisiana | Approved | SUD | Hypothetical | · SUD short-term services are covered as a hypothetical eligibility group with spending caps determined by a supplemental budget neutrality test. |
| · State must not accrue budget neutrality “savings.” | ||||
| · SUD PMPM expenditure cap is $687 for demonstration year ending December 31, 2018. | ||||
| Maryland | Approved | SUD | Hypothetical | · SUD short-term services are covered as a hypothetical eligibility group with spending caps determined by a supplemental budget neutrality test. |
| · State must not accrue budget neutrality “savings.” | ||||
| · SUD PMPM expenditure cap is $5,750 for demonstration year ending December 31, 2018. | ||||
| Massachusetts | Approved | SUD | Universal | · Waiver language does not designate SUD IMD services as hypotheticals. It does state that expenditures made on behalf of enrollees under age 65 who are institutionalized in a nursing facility, chronic disease or rehabilitation hospital, intermediate care facility for mentally ill, or state psychiatric hospital for other than short term rehabilitative stay, are excluded from the Budget Neutrality Test. |
| · It is unclear whether CMS would approve this approach in other states and should be noted that Massachusetts currently has a pending amendment to this waiver that uses a different approach toward demonstrating budget neutrality for MH IMD services. | ||||
| New Jersey | Approved | SUD | Hypothetical | · SUD short-term services are covered as a hypothetical eligibility group with spending caps determined by a supplemental budget neutrality test. |
| · State must not accrue budget neutrality “savings.” | ||||
| · SUD PMPM expenditure cap is $4,325 for demonstration year ending June 30, 2019. | ||||
| Utah | Approved | SUD | Hypothetical | · SUD short-term services are covered as a hypothetical eligibility group with spending caps determined by a supplemental budget neutrality test. |
| · State must not accrue budget neutrality “savings.” | ||||
| · SUD PMPM expenditure cap is $3,488 for demonstration year ending June 30, 2019. | ||||
| Vermont | Approved | MH | Universal | · Authority to use federal Medicaid funds to pay for IMD mental health treatment services, but federal Medicaid IMD spending must be phased out by 2025. |
| · Cap on spending subject to regular budget neutrality test based on without waiver projections, except New Adult Group, which is subject to supplemental test. | ||||
| Virginia | Approved | SUD | Hypothetical | · SUD short-term services are covered as a hypothetical eligibility group, with spending caps determined by a supplemental budget neutrality test. |
| · State must not accrue budget neutrality “savings.” | ||||
| · SUD PMPM expenditure cap is $7,052 for demonstration year ending December 31, 2018. | ||||
| West Virginia | Approved | SUD | Hypothetical | · SUD short-term services are covered as a hypothetical eligibility group with spending caps determined by a supplemental budget neutrality test. |
| · State must not accrue budget neutrality “savings.” | ||||
| · SUD PMPM expenditure cap is $2,807 for demonstration year ending December 31, 2018. | ||||
| Alaska | Pending | SUD | Hypothetical | · Waiver application provides identical SUD IMD spending estimates for both without-waiver and with-waiver projections. |
| · SUD PMPM projection is $1,621 for demonstration year ending December 31, 2019. | ||||
| Arizona | Pending | SUD | Universal | · State projects $33.5 million in savings achieved by utilizing IMD services over the five-year demonstration period. |
| Illinois | Pending | SUD & MH | Universal | · State estimates a total of $2 billion in cost savings over the five-year demonstration period achieved through: |
| o Comprehensive management of members; | ||||
| o Deflecting members w/ behavioral health conditions away from high-cost institutional services when unnecessary; | ||||
| o Stabilizing BH conditions and co-morbid medical conditions to avoid long-term Medicaid eligibility | ||||
| o Value-based payment and delivery. | ||||
| Kansas | Pending | SUD & MH | Universal | · No reference to hypothetical population or supplemental budget neutrality test is included in waiver language. |
| · The state’s $180 million in accumulated savings over demonstration period as of CY17 drops to $33 million in CY18. | ||||
| Massachusetts | Pending | SUD & MH | Universal | · State estimates that this waiver amendment will decrease its accumulated budget neutrality savings over the waiver period by about $921 million. |
| Michigan | Pending | SUD | Universal | · Waiver language states that projected "capitation payments are inclusive of all mental health, substance use, and developmental disabilities service cost." |
| · State estimates $15.6 million in total savings over the five-year demonstration period. | ||||
| New Mexico | Pending | SUD & MH | Universal | · State estimates $4.8 million in savings over five-year period of renewal waiver. |
| · Budget neutrality projections include hypothetical eligibility groups, but do not single out SUD services as a unique hypothetical. | ||||
| · With waiver cost estimates show savings even in hypotheticals compared to withoutwaiver. | ||||
| North Carolina | Pending | SUD & MH | Hypothetical | · Waiver application provides identical SUD IMD spending estimates for both without-waiver and with-waiver projections. |
| · SUD PMPM projection is $7,243 for demonstration year ending June 30, 2020. | ||||
| · For the without-waiver projection, the state included consideration for all acute IMD stays for psychiatric treatment for adults. Substance use disorder stays are excluded from the per capita calculations in the budget neutrality analysis and addressed separately in a unique eligibility group. | ||||
| Washington | Pending | SUD | Hypothetical | · Waiver application provides identical SUD IMD spending estimates for both without waiver and with waiver projections. |
| · SUD PMPM projection is $844 for demonstration year ending December 31, 2018. | ||||
| Wisconsin | Pending | SUD | Hypothetical | · Waiver language does not explicitly say SUD IMD costs will be treated as hypothetical, but "requests that expenditures for providing residential substance use disorder treatment in an IMD be regarded as expenditures under the state's Medicaid Title XIX State Plan." |
| · Projects a cost impact of $0.00 for SUD IMD services on overall cost of waiver. |
*SUD: Substance Use Disorder
**MH: Mental Health
TABLE 2: OHIO’S CURRENT RESIDENTIAL BENEFIT
| ASAM Level of Care | Per Diem Rate |
|---|---|
| 3.1 Clinically Managed Low Intensity | 152.57 |
| 3.2 Clinically Managed Withdrawal Management | 256.33 |
| 3.3 Clinically Managed Population Specific High Intensity (adult only) | 213.7 |
| 3.5 Clinically Managed High-Intensity (adult) Medium Intensity (adol.) | 213.7 |
| 3.7 Medically Monitored Withdrawal Management | 392.86 |
As of 4.18.2018.
Information provided by the Ohio Department of Mental Health and Addiction Services.
To learn more go to: https://www.asamcontinuum.org/knowledgebase/what-are-the-asam-levels-of-care/