Medicaid Substance Use Disorder waiver is a critical tool

On September 24, the Centers for Medicare and Medicaid Services (CMS) approved Ohio’s 1115 Substance Use Disorder Demonstration waiver (SUD waiver). The approval of the SUD waiver represents years of Medicaid policy debate about the role and scale of the behavioral health delivery system as Ohio grapples with the consequences of the opioid epidemic and tries to comply with federal laws regarding parity. Community Solutions has looked at some of the policies which have resulted from the debate, including the managed care mega rule of 2016, a multi-state comparison of the financing of SUD Waivers, Ohio’s difficulty in achieving parity, as well as public comments regarding Ohio’s application. And while the SUD waiver provides a clear path for Medicaid reimbursement to accommodate the inpatient addiction needs of Medicaid recipients, with it comes some longer-term questions.

 Historically, federal law prohibited the use of Medicaid funds for care provided in behavioral health residential treatment facilities larger than 16 beds.

First, it’s important to understand the basic utility of the waiver. Historically, federal law prohibited the use of Medicaid funds for care provided in behavioral health residential treatment facilities larger than 16 beds. This policy, known as the “Institutions for Mental Disease (IMD) Exclusion,” essentially limited reimbursement for any “hospital, nursing facility, or other institution of more than 16 beds, that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care, and related services,” including addiction treatment services. However, after the State of Ohio “carved-in” behavioral health services into managed care (BH Redesign), the mega-rule of 2016 enabled the state to finance treatment as a part of its managed care benefit. While the rule seemed to open up the opportunity to have more permanent financing solutions for these services, CMS indicated to the state that it would ultimately need to seek additional authority in order to maintain the federal funding and thus SUD waiver was pursued.  

Information about the waiver’s operation and implementation plan have been released by the state with details about how the state will enable this program. Specifically, as a condition of waiver approval, the state had to respond to six “milestones” established by CMS in a 2017 State Medicaid Director letter including provisions which outline access, evidence-based practices, capacity and plans for the coordination of care. In regards to capacity, the state largely defers to managed care to ensure network adequacy. Based on data in the implementation plan, three of the five managed care plans achieved 100 percent adequacy with the remaining two (Buckeye and Paramount) at 92 and 98 percent, respectively. And, while 15 counties appear to have no Medication Assisted Therapy (MAT) providers in their county, none of the remaining 73 counties have more than 50 percent of their MAT capacity being utilized. However, despite this apparent abundance of capacity in Medicaid, the state will conduct a needs assessment of all SUD treatment providers that are accepting new patients for MAT and contract a statewide vendor to assist with provider qualification and verification in 2020. It remains to be seen how this may impact the state’s ability to redress some of the private pay capacity issues tied to the Mental Health Parity Act of 1996.

 Beyond capacity, however, there remains an issue with sustainability.

Beyond capacity, however, there remains an issue with sustainability. The waiver itself is built on a premise that funding for services is budget neutral (a condition of 1115 waivers) because it uses data from the period of time where the BH Redesign was implemented – a standard which itself necessitated the pursuit of the SUD waiver. This brings to light the question of longevity once the SUD waiver expires if only because this program represents $2.6 billion over five years, most of which is federally funded through Medicaid expansion. Given this reality, longer-term policy questions come to mind.

 How can case management for this population, given the intensity of need, facilitate a continuum of care focused on community-based recovery supports?

It remains to be seen how the SUD waiver will interact with the Behavioral Health Care Coordination (BHCC) Program. BHCC, in some ways, represents a “reset” of the BH Redesign in that the state will reconfigure how it will allocate the case management responsibilities for all the populations that are covered under the benefit, including those with an inpatient SUD need. Given the amount of resources going into residential care, what does BHCC “need to be” so that residential treatment doesn’t inadvertently incentivize institutionalization? How can case management for this population, given the intensity of need, facilitate a continuum of care focused on community-based recovery supports? Additionally, research indicates SUD is associated with a higher risk of homelessness for longer periods of time, that SUD is the leading cause of homelessness in the United States and individuals with a history of illicit drug use are more likely to be unemployed and have a criminal record, which act as barriers to attaining housing. The question then becomes, how can Medicaid support housing, generally, without violating the IMD Exclusion if the SUD waiver is not renewed? In some instances, a more systemic approach to questions such as these may be facilitated through local governments. Given the influx of resources tied to the opioid settlement and the interplay of those resources with local levy dollars, as is the case in Cuyahoga and Summit counties, could we see local governments invest in more non-medical supports like housing to facilitate recovery?

 On November 6, the State of Ohio will host a briefing on the SUD waiver and how it integrates with BHCC.

In the end, the SUD waiver represents a critical tool during a time of great need. With the implementation plan offered by the state, there appears to be a rich data set that will document the progress and utility of the waiver and Community Solutions will continue to monitor the program. Beyond this, however, are the larger questions of how this specific service will fit into the larger continuum and how the service can be maintained, long-term. To that end, on November 6, the State of Ohio will host a briefing on the SUD waiver and how it integrates with BHCC. We recommend you tune in and learn more alongside Community Solutions’ staff.