1 A Commonwealth of Virginia Partnership January Transforming Virginia’s Medicaid Delivery System for Individuals with Substance Use Disorders (SUD)

2 Opioid Overdose Death Rates are on the Rise in the US CDC. MMWR Updated with 2009 mortality and 2010 treatment admission data.

3 The Virginia Picture In 2013, more Virginians died from drug overdose than car accidents. 80% of drug overdose deaths were attributed to prescription opioid drugs and heroin Virginia OCME’s Top 3 Methods of Death by Number and Year of Death

4 Number of All Fatal Drug* Overdoses in Virginia Cities and Counties, *Drugs included Benzodiazepines, Cocaine, Heroin, or Prescription Opioids

5 Impact of Substance Use Disorders (SUD) on Virginia’s Families Limited Coverage: Non-pregnant adults cannot receive residential treatment; instead receive more expensive inpatient detox. Pregnant women lose substance abuse treatment coverage 60 days after delivery. Fragmented System: SUD treatment services are separated from mental and physical health services Incomplete Care Continuum Lack of Providers: Rates for SUD treatment have not been increased since 2007 and don’t match the cost of providing care. This severely limits number of providers willing to provide services to Medicaid members. Providers also struggle to understand who to bill for services. Consumers do not know where to seek services. Limited Access to Services Current SUD Delivery System is Impacting VA Families: Neglect due to Substance Use Disorders was the #2 reason Virginia children entered foster care in 2013, but over half of mothers with children in foster care have waited more than 12 months for court mandated SUD services (according to the 2013 Title IV B report).

6 Actualizing Change and Progress for Virginia Families Governor’s Task Force on Prescription Drug and Heroin Abuse: Recommendations Focus on population health and community initiatives. Examine and enhance Medicaid reimbursement for substance abuse treatment services. Ensure health plans are complying with the Mental Health Parity and Addiction Equity Act by providing adequate coverage for treatment, including Medication Assisted Treatment (MAT). Explore and expand use of appropriate peer support services, with necessary oversight. Six Proposed SUD Budget Supports for Members in Current Medicaid Program Expand short-term SUD inpatient detox to all Medicaid members; Expand short-term SUD residential treatment to all Medicaid members; Increase rates for existing Medicaid/FAMIS SUD treatment services; Add Peer Support services for individuals with SUD and/or mental health conditions; Require SUD Care Coordinators at Medicaid health plans; Provide Provider Education, Training, and Recruitment Activities.

7 Current Virginia Medicaid Coverage for Individuals with SUD SUD ServiceChildren < 21Adults*Pregnant Women Traditional Services InpatientXNC*NC OutpatientXXX Medication Assisted Treatment (MAT) XXX Non-Traditional Services ResidentialXNC*X** Day TreatmentXXX Intensive OutpatientXXX Opioid TreatmentXXX Crisis InterventionXXX Case ManagementXXX Peer SupportsNC *Dual eligible individuals have coverage for inpatient and residential treatment services through Medicare. **Coverage limited to substance abuse residential treatment facilities; no coverage in an IMD as defined by CMS. ***Coverage exists through EPSDT program for children under age 21. Services Highlighted in Yellow will be addressed by the SUD Budget Proposal

8 Transforming the SUD Delivery System March 2016: Planning and implementation process begins Ongoing Systems Development, recruitment & training begins for new SUD network September 2016: DMAS seeks State Plan authority for new SUD benefits Jan 1, 2017: Phase 1 implements SUD benefit in initial 3 regions July 1, 2017: Phase 2 expands SUD benefit to 3 more regions Jan 1, 2018: Phase 3 ensures SUD benefit is implemented throughout the entire Commonwealth. If SUD benefit is included in budget passed by General Assembly, DMAS anticipates the following timeline: In 2016 DMAS can apply for an 1115 Waiver to complement the SUD benefit by capturing Federal match for services previously disallowed for Medicaid payment.

9 Proposed Regions and Implementation Timeline Phase 1: January 2017 Metro Richmond Southwest VA Winchester Phase 2: July 2017 Northern VA Roanoke Hampton Roads/Norfolk Phase 3: January 2018 Statewide Implementation

10 Potential Costs & Savings of SUD Benefit to the Commonwealth  Fiscal Year 2017: $2.6 million in State General Funds  (Benefit would start on January 1, 2017)  Fiscal Year 2018: $8.4 million in State General Funds Potential Savings to the Commonwealth: Every dollar invested in Addiction Treatment generates $7 in cost savings to health care and criminal justice systems* Decreased Medicaid Emergency Department and inpatient costs: Kaiser expansion of outpatient SUD treatment resulted in a 35% decrease in inpatient and 39% decrease in ED costs. Decreased costs to criminal justice system. Average annual cost of SUD treatment is $2,400 vs. average annual prison cost of a drug offender is $55,000. Increased access to treatment may lead to a decrease of incarceration for people with SUD. New revenue from increased employment and productivity: Every $1 invested in SUD treatment is estimated to generate $2.82 in new state tax receipts. * Substance Abuse and Mental Health Services Administration

11 Additional opportunity to transform SUD delivery system! Medicaid 1115 SUD Waiver Potential Cost Savings to Virginia’s Medicaid Program Allows Virginia to enhance services provided in residential treatment facilities, significantly increasing SUD treatment capacity; $Increasing access to more cost-effective SUD treatment (residential treatment costs $205/day vs. inpatient detox costs average $1960/day). Allows services to be provided in an IMD which, without the waiver, is federally prohibited for mental health or SUD treatment delivered in facilities with > 16 beds; and $Federal match to cover services in an IMD which would incentivize providers to expand residential treatment facilities ( > 16 beds); Allows Virginia to enhance services for short- term inpatient and residential SUD treatment delivered by state psych hospitals. $Federal match to support SUD services delivered to Medicaid-eligible individuals in state psych hospitals (replacing current GF).

12 Public Comments  The Commonwealth continues to seek public comment on the SUD Benefit  Please submit comments to: