Kaiser Health News reported last week in their article “California to Revamp Addiction Treatment for Medicaid Recipients” (Anna Gorman, 12/10/15) about how the state’s Medi-Cal program “is overhauling its substance abuse treatment system for low-income people, embarking on a massive experiment to create a smoother path for addicts from detox through recovery.”
The state is the first to receive federal permission to revamp drug and alcohol treatment for Medi-Cal in California to expand treatment services, including inpatient care, case management, recovery services and added medication. Beginning next year, drug treatment centers will be able to get reimbursed for providing this much wider range of options to people on Medi-Cal. Currently, federal rules limit drug treatment centers’ ability to get reimbursed under Medicaid for residential care. Clinics with more than 16 beds essentially cannot get paid, except for treating pregnant and postpartum women. That restriction will be dropped for California under the waiver. The changes stem in part from the Affordable Care Act, which required that substance abuse treatment be covered as an “Essential Health Benefit.”
However, California’s Medi-Cal drug treatment program currently costs about $180 million annually, paid through a combination of state and federal funds and “there aren’t any estimates for costs under the new approach,” which uncertainty is what has been keeping private insurance continuously fighting to flood the industry with cash.
Under the new California program, “the idea is that the changes will lower overall health care expenses by enabling more people to get sober and healthier so they stop rotating through treatment centers, jails and hospitals.”
The five-year pilot project was approved by the Centers for Medicare & Medicaid Services in August. Under the waiver, California counties will approve treatment for Medi-Cal patients based on medical necessity and criteria established by the American Society of Addiction Medicine (ASAM).
Medi-Cal beneficiaries will be able to access up to two 90-day residential stays each year (with a possibility of one 30-day extension) if providers determine that it is medically necessary. Certain populations, including those in the criminal justice system, can get approval for longer stays.
“There is a cost to raising the bar on treatment,” said Albert Senella, president of the California Association of Alcohol and Drug Program Executives. “If the rates aren’t adequate … we are not going to be able to effectively meet the [new requirements] and the needs of the population.”
Senella, CEO of Tarzana Treatment Centers, also said many clinics across the state don’t have money upfront to prepare for the overhaul, which will require improving technology and adding and training staff. For now, no plans are in place to provide counties or clinics with start-up funds.
The federal waiver means increased oversight of treatment centers. Last year, a state audit found widespread fraud and questionable billing among Medi-Cal drug treatment providers. The audit followed reports by the Center for Investigative Reporting that clinics were billing for fake clients.
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