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Substance abuse costs in Medicaid are staggering: What are states doing?
People with substance abuse disorders cost Medicaid hundreds of millions of dollars annually in medical care, according to new research that examined records of nearly 150,000 people in six states. The study, The Impact of Substance Use Disorders on Medical Expenditures for Medicaid Beneficiaries with Behavioral Health Disorders, published in the January 2009 issue of Psychiatric Services, suggests that early interventions for substance abuse not only improve outcomes, but also save substantial amounts of money.
Substance abuse probably costs Medicaid programs a lot more than they think, says study author Robin E. Clark, PhD, associate professor of family medicine and community health at the Center for Health Policy and Research at the University of Massachusetts Medical School in Worchester, MA.
As patients with substance abuse disorders got older, the medical care costs increased at a far higher rate than behavioral health costs. This suggests that there are not a lot of substance abuse services that successfully target the older age group. Therefore, there could be substantial savings and health benefits by focusing on those populations, says Dr. Clark.
The study found that 29% of the Medicaid patients with behavioral health disorders were diagnosed with substance abuse disorders in the six states, ranging from a low of 16.1% in Arkansas to 37.1% in New Jersey and 39.6% in Washington. For people with substance abuse disorders, the six states alone paid $104 million more for medical care and $105.5 million more for behavioral health care than for those patients who did not have an alcohol or drug abuse diagnosis.
If those findings were extrapolated to the entire country, the extra costs for those with substance abuse disorders would easily run into the hundreds of millions of dollars.
The most surprising finding, says Dr. Clark, was the remarkable consistency across states. "Medicaid programs in the six states we studied had very different benefits, served different populations, and operated in a range of health care environments," he says. "Yet, substance use disorders were consistently associated with higher behavioral health and medical expenditures."
The study's findings suggest that addiction is a problem for primary care, as well as for specialty treatment. "Left untreated, substance abuse or dependence makes it more difficult to manage chronic physical illness," says Dr. Clark.
Some of Dr. Clark's previous research shows that many Medicaid beneficiaries with substance use disorders never receive treatment in outpatient settings. Programs such as Screening, Brief Intervention, and Referral to Treatment (SBIRT) that are provided in hospitals or emergency departments are a promising way to identify and engage individuals with substance use disorders.
"This is definitely an option that Medicaid programs are considering," he says. "New procedure codes were recently created to facilitate payment for SBIRT activities. My informal information is that at least 14 states have implemented some form of SBIRT in their Medicaid programs."
However, some of the care management programs currently used in Medicaid programs across the country specifically exclude-or simply do not address-behavioral health disorders.
"Our data suggest that identification and treatment of behavioral health disorders need to be a part of any serious attempt to improve the quality and reduce the cost of care for chronic illness," says Dr. Clark.
Efforts to manage health care spending are clearly intensifying. "What is different is that the newer programs may be more focused on cost than previously," he says. "Recent publication of results from a 15-site study of care management for Medicare patients was disappointing on the cost-savings front."
The medical home model is a popular emerging alternative that focuses care management on the practice level, says Dr. Clark, "but how well medical homes deal with substance abuse and chronic illness remains to be seen."
Significant savings are possible
In Oregon, the use of SBIRT is being actively promoted. "This is something I very much would like to see implemented throughout the state of Oregon by the fully capitated health plans," says Karen Wheeler, addictions policy manager in Oregon's Department of Human Services. "And we have some efforts under way to promote that."
Currently, there is a department initiative to integrate additional mental health services into primary care. A primary behavioral health integration tool kit, including SBIRT, was sent out to the state's managed care plans, mental health organizations, fully capitated health plans that manage the primary health care's physical health and the addictions benefits, and the medical directors who work in those plans.
The state's health services commission approved the billing codes last year to allow providers to be reimbursed for SBIRT. "So, now it's a matter of the plans implementing the codes and allowing people to bill for that service," says Ms. Wheeler.
Ms. Wheeler says she hopes to see cost offsets similar to the state of Washington's, when SBIRT was implemented in some of its EDs.
Researchers from the University of Washington presenting at the October 2008 annual meeting of the American Public Health Association reported that when SBIRT was implemented in nine hospital EDs in Washington state, overall Medicaid costs for working-age disabled clients who received a brief intervention were $177 lower per member per month, compared to those who didn't receive an intervention. The lower costs resulted from a decrease in inpatient hospitalization costs associated with subsequent ED admissions.
"There is clear potential for savings in health care costs and other costs for social services and criminal justice," according to Richard L. Brown, MD, MPH, associate professor in the department of family medicine at the University of Wisconsin's School of Medicine and Public Health. Dr. Brown also is clinical director of the Wisconsin Initiative to Promote Healthy Lifestyles.
"I expect that other states will jump on board once they understand all that SBIRT has to offer," says Dr. Brown. "The potential for benefit here in Wisconsin is especially large." About a third of all patients in the Wisconsin Initiative to Promote Healthy Lifestyles screen positive for risky or problem drinking or drug use.
Ms. Wheeler says the last study on costs of substance abuse for Medicaid in Oregon was done in 1996, and it showed decreased costs after Medicaid clients obtained addiction treatment. "We have been citing that study for a long time, and it's pretty old; but while other states have done cost offset studies, we haven't had the resources," she says. "We do know that whenever you address addiction issues, wherever the person is, whatever system they are involved in, if you can help somebody receive treatment you see cost offsets."
The governor's recommended budget includes some significant cuts to general funds that support addiction services in Oregon, but also includes an expansion of the number of people covered under the Medicaid program. "The stimulus package will help us to avoid any cuts this current biennium," adds Ms. Wheeler.
For SBIRT to be implemented, however, training will be needed, including development of a web site to teach physicians how to implement the tool in their own practices.
As for funding, Ms. Wheeler says "we will have to leverage anything we can get. We do have a funded grant from Oregon Health & Science University to train physicians and residents, and develop a curriculum to implement SBIRT. That is something we have locally that I am pretty happy about."
Addictions and mental health are "the topics right now over at the capital," she reports. "People are hearing loud and clear that treating addiction and helping people get into recovery is a way to save money in the long run and help the economy. And the recovery voices are coming out louder than ever right now. People who have accessed services are coming out and speaking more than I've ever seen."
Budget cuts are obstacle
However, as many states face significant budget shortfalls, substance abuse intervention programs for Medicaid may be cut or curtailed.
Massachusetts also has plans for statewide reimbursement of SBIRT through Medicaid. Several additional new strategies for early-intervention substance use disorder treatment options are being developed and piloted. Some examples of these efforts include:
-The current service delivery model by the MassHealth Transition Age Youth workgroup is implementing the Children's Behavioral Health Initiative.
-The MassHealth Primary Care Clinician Plan and Massachusetts Behavioral Health Partnership are modifying the Addictions Recovery Management Service model to adapt for treating young people covered under the MassHealth plan.
-The current MassHealth initiative, teaming up with the Depart-ment of Public Health's Bureau of Substance Abuse Services and University of Massachusetts Medical School, is planning the widescale implementation of SBIRT in medical settings.
"The health benefits of engaging members in lifestyle changes and substance use disorder treatment during the earlier stages of substance abuse will lead to cost savings in each instance that a chronic addiction, a chemical dependency, or a traumatic injury is averted," says Tom Dehner, Massachusetts' Medicaid director, "Across the nation, the SBIRT pilot studies have demonstrated meaningful health outcomes and health care spending offsets."
However, the realities of the state's budget mean these programs have been put on hold. "Certainly, MassHealth programs have to re-focus our attention and efforts to deal with new budget developments," says Mr. Dehner. "But these pilots and implementation activities remain on our work plan, even if they have been temporarily delayed."
Contact Dr. Brown at (608) 263-9090 or email@example.com, Mr. Clark at (508) 856-4226 Robin.Clark@umassmed.edu, Mr. Dehner at (617) 573-1770, and Ms. Wheeler at (503) 945-6191 or Karen.Wheeler@state.or.us.