SUBSTANCE USE DISORDER (SUD)BENEFIT UNDER MEDICAID EXPANSION

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1 A statewide coalition of consumers, providers, educators, and advocates representing the voice for alcohol and drug abuse services SUBSTANCE USE DISORDER (SUD)BENEFIT UNDER MEDICAID EXPANSION The Coalition of Alcohol &Drug Associations (CADA) is submitting the following comments and recommendations on two separate but interrelated initiatives now underway affecting Substance Use Disorder (SUD) benefits for Medi Cal eligible individuals; 1) California s implementation of Affordable Care Act (ACA) and 2) the federal 1115 waiver requirement for a needs assessment and plan for integrating SUD services into the Medi Cal Expansion population. An overriding issue for both of these initiatives is the application of federal parity law. Meeting the SUD treatment needs of current Medi Cal eligible individuals through the Drug Medi Cal (DMC) Program and individuals who will be covered under the proposed Medi Cal Expansion will require a more robust treatment service continuum than that which is now offered under the current archaic 1970 s era program with its limited benefits and restrictive rules. The current DMC program if left unchanged with its limited five (5) services, will result in increased health care costs to California, the exact opposite outcome that is one of the primary goals of Health Care Reform. Background The ACA explicitly includes substance use disorder services as one of ten categories of service that must be covered as essential health benefits. The ACA also mandates that SUD benchmark coverage must be provided at parity, compliant with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (2008). Individuals with substance use disorders have the opportunity to significantly benefit from the health care law, as insufficient insurance health care coverage for these conditions has historically prevented countless people from obtaining needed treatmenti. If applied correctly, the health care reform law has the opportunity to ensure that clients, families and communities struggling with substance use disorders have access to culturally competent prevention and treatment opportunities.

2 Research suggests that without addressing the treatment needs of persons with serious substance use disorders, it may be very difficult to achieve the three critical healthcare reform objectives articulated by the Institute for Healthcare Improvement s Triple Aim: Improve the health of the population Enhance the patient experience of care (including quality, access, and reliability) Reduce, or at least control, the per capita cost of total healthcare 1115 Waiver Terms and Conditions One of the conditions for federal approval of the state s application for its federal 1115 waiver (Bridge to Reform) application was a needs assessment and submission of a plan to the Federal Centers for Medicare and Medicaid Services (CMS) for integrating MH/SUD services into the Alternative Benefit Plan that is poised to become the foundation for the Medi Cal Expansion. The Department of Health Care Services (DHCS) has started on a path to determine the PMPM (Per Member Per Month) cost for SUD and MH benefits, but thus far has decided not to take into account the entire cost of treating uninsured individuals for SUD treatment, who now are cared for under block grant and other funding streams. This newly eligible population will largely be part of the Medi Cal Expansion population. However, DHCS does not understand the cost of their care, nor is it taking these total costs into consideration in developing its plan to meet the requirements of the 1115 waiver. Instead, DHCS is basing the PMPM cost for SUD treatment on the cost experience of private plans and on the current DMC program costs. Private plans serve a largely different population with different needs than the population served by Medi Cal and the Drug Medi Cal program is widely acknowledged as a program that is inefficient, restrictive and antiquated. Both the private plans and the DMC program costs fail to take into account the additional services and their costs that current DMC recipients receive from other funding streams in order to provide appropriate levels of care for SUD diagnoses. Including the total amount of the cost for all services would be a more realistic calculation and one that would yield a more accurate picture of what benefit the state will realize for its expenditure/investment in expanded SUD treatment services. The complete cost picture has to be considered in the context of the cost 2

3 offset to state and counties if appropriate care (defined as assessed level of need for the duration prescribed) is provided to SUD patients. If DHCS underestimates the PMPM cost for these services, counties and/or state (whoever administers) will not have the right allocations/resources to provide the right care. The end result is that recipients do not receive appropriate levels of care and the state/counties don t get the improved patient outcomes and cost reductions which are the two top priorities for health care reform. Unless the state factors in these other costs, the result will be a deficient program and substandard care. One way to address this flawed methodology and inaccurate assumptions about the adequacy of the benefit is for DHCS to expand the scope of work of the consultants who are developing the MH/SUD Integration Plan as required by the 1115 waiver. The scope of work can be expanded to include an analysis that would more accurately capture the real cost of services. This might include other SUD treatment related services that could be provided in other state Medicaid programs and/or delivered by a provider through other funding streams to meet those medical needs, i.e. block grant funding, realigned state funding to counties and other county resources. Only then can the true costs for expanded SUD benefits that would fully meet parity and provide services at the assessed level of need of recipients can be determined. Drug Medi Cal and Medicaid Expansion Population AB x1 1 (Perez) and SB x1 1 (Hernandez) CADA recommends the state adopt one benefit for both the current Drug Medi Cal Program and for the Medi Cal Expansion population. A blended SUD benefit for Drug Medi Cal participants and for those who will be eligible for SUD services under the state Medi Cal Expansion will be more cost effective and yield better treatment options and outcomes for both populations and can be designed to meet federal parity law, with which neither the private plans nor the current Drug Medi Cal program are in compliance. The following is the basic blended SUD Drug Medi Cal Program benefit that will meet federal parity law and can be used across all of the state s health care delivery systems: 3

4 Expand the formulary to include all FDA approved medications for the treatment of SUD. Repeal state restrictions on outpatient services which prohibit proper care, such as individual counseling and arbitrary limits on group counseling size. Repeal state regulations which extend beyond the federal regulations for Narcotic Treatment Programs. Add inpatient and outpatient medical detoxification services as a reimbursable benefit. Add residential rehabilitation as a reimbursable benefit. Transitional residential recovery services. Institute SBIRT (Screening, Brief Intervention and Referral to Treatment) at all facilities serving the Medi Cal and Medi Cal Expansion population. Primary care centers, hospital emergency rooms, trauma centers, and other community settings provide opportunities for early intervention with atrisk substance users before more severe and costly consequences occur. Include SUD as a disease eligible for chronic disease/medical management. Add assessment, case management, collateral services, and residential acute stabilization. Designate case management as a reimbursable benefit. Authorize SUD licensed treatment facilities to become patient centered medical homes. Ensure that youth have access to developmentally and gender appropriate care. As is the case with service for pregnant and parenting women, reimburse services for persons with co occurring MH/SU disorders at an enhanced rate. If Drug Medi Cal remains a Medicaid carve out, counties will need to develop Memoranda of Understanding (MOUs) between county substance use disorder treatment systems and managed health care organizations as a tool for ensuring strong coordination of services, as well as seamless access to care for individuals transitioning from acute care, detoxification and emergency care to residential and outpatient services. These MOUs should be designed to achieve the desired coordination goals, including identifying opportunities for shared savings strategies and addressing information exchange barriers. 4

5 Under the realignment structure for substance use disorder services, provisions should be included that prioritize growth funding for entitlement programs (i.e. EPSDT, Drug Medi Cal). Safety net funding for uninsured populations must be preserved. The implementation of health care reform will provide for more individuals with substance use disorder needs to have health insurance, but there will still be individuals with substance use disorders who do not have insurance coverage. Preservation of the federal Substance Abuse Prevention and Treatment (SAPT) Block Grant will be crucial to provide safety net services for these individuals. However, we must ensure that shifts or reductions in SAPT Block Grant or other safety net funding do not diminish access to substance use disorder services for the residually uninsured population. Legislative advocacy in Washington is essential. There must be strong coordination of substance use disorder and primary care services, in order to ensure quality care and realize cost savings. This coordination would include reducing barriers to the exchange of health information necessary to improve quality and address confidentiality. Workforce development and expansion of treatment capacity are critical to address the needs of the Medicaid expansion population in need of substance use disorder treatment. In order to provide consistent standards, verification for employment (registry), and revocation procedures, the state should establish one body to certify counselors instead of the current system comprised of nine independent and uncoordinated certifying bodies. In addition, the state should take the lead role in developing licensure standards for substance use disorder counselors. Data reporting systems should be improved. Access to quality, appropriate and timely data is essential for county and state evaluation, and quality improvement activities. System partners at the state and county levels should work collaboratively to identify short and long term priorities to reduce reliance on separate data storage platforms that create redundancy in data entry, transmission and storage for the state and counties. 5

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