1. FADAA Health Care Reform
How Will Medicaid Reform Impact
Substance Abuse and Mental Health
August 19, 2010

2. Impact of Medicaid Reform ?

3. Impact of Medicaid Reform?
Mental Health services will likely be delivered by HMOs or PSNs
Inpatient treatment will probably be covered by these plans and they may be motivated to reduce ER and Inpatient costs
Managed Care Plans may incorporate more disease management capacity to reduce costs and improve quality

4. Impact of Medicaid Reform?
Marketing opportunities exist to:
demonstrate cost savings from coordinating substance abuse services
be prepared to work with Health care Plans to provide co-occurring services through FFS

5. Impact of Medicaid Reform
The Faces of Medicaid III – October 2009
showed for the frequency of co-morbid
conditions of the most expensive 5%:
Psychiatric and Cardiovascular %
Psychiatric and Central Nervous System %
Psychiatric and Gastrointestinal 24 %

6. Impact of Medicaid Reform
Psychiatric conditions were included 8 times in 20 conditions for co-morbidity in the highest 5% costs
Psychiatric conditions are included in the top 5 of the highest cost group.
Co-morbidity with Substance Use Disorders is very high

7. Impact of Medicaid Reform
What substance abuse services could reduce the overall cost of care?
HMOs have flexibility in what services they provide
Physicians can bill for screenings
Screening, Brief Intervention, and Referral to Treatment is effective

8. Impact of Medicaid Reform
Providing substance abuse treatment saves medical costs
Washington State showed a $2,500 reduction per recipient
A study on methadone detoxification showed that for every dollar of treatment there was an offset of $4.87 in medical costs

9. Impact of Medicaid Reform
Health Care Utilization Savings: California
Treated patients have shown reduced:
ER visits by 39%
Hospital stays by 35%
Total medical by 26%
(when compared to a control group)

10. Impact of Medicaid Reform
John Hopkins HealthCare Return on Investment study – 2006
Showed a $3.65 savings for every dollar spent
Used integrated case management to coordinate substance abuse services and medical care
Increased rate in treatment
Decreased hospital admissions and length of stay

11. Impact of Medicaid Reform
Outreach with primary care physicians can increase the number of persons entering treatment.
Treatment of substance abuse can reduce overall medical costs including inpatient and ER use.

12. Impact of Medicaid Reform
Substance Abuse providers must be prepared to bill Medicaid and work with Health Plans in an integrated market
Medicaid billings for substance abuse diagnoses have been steadily increasing
Opportunities exist to increase service provision through outreach and collaboration

13. Impact of Medicaid Reform
The current Medicaid State Plan includes 10 services that can be billed to Medicaid for persons with SUD
These are included under:
Assessment services
Behavioral Health Therapy
Psychosocial Rehabilitation
Medical and psychiatric management

14. Impact of Medicaid Reform
Behavioral Health Overlay Services is also available but provided only in:
Juvenile Justice Residential Programs
Child Welfare Residential Programs
Currently not included in any Health Plan

15. Impact of Medicaid Reform
Preparing for Medicaid Reform and Health Care Reform --- What can you do?
Expand your billing of Medicaid
Learn to use the existing services to meet the needs of the people you serve
Establish means to determine your unit rates and negotiate accordingly

16. Impact of Medicaid Reform
What can you do?
Develop informal partnerships or Memorandums of Agreements to assist Health Plans in managing substance abuse with their enrollees
Reach out to Federally Qualified Health Care centers to be a partner in their services
Establish small pilots within your areas to demonstrated medical cost saving through substance abuse treatment

17. Impact of Medicaid Reform
Assist hospitals and ER in screening their patients for Substance Abuse
Establish referral linkages with hospitals and physicians both in specialty practices and in primary practices to encourage referrals for persons for early intervention.
Work with OB/GYN to improve access to substance abuse services for pregnant women.

18. Impact of Medicaid Reform
Why take these actions now while services are still paid fee-for-service?
We don’t know how long Substance Abuse community services will remain out of the plans
PSNs are already starting to manage mental health services

19. Impact of Medicaid Reform
Demonstrate your value to health care systems now
Take advantage of the system flexibility that currently exists
Become part of the health care delivery system
Be seen as an essential element in overall health care management

20. Impact of Medicaid Reform
Demonstrate how the array of services that you provide are vital to health care service delivery
Show that non-licensed staff provide essential services that can be incorporated into a health care system
Work within your Managing Entity (if you have one) to begin to negotiate with health care systems for substance abuse services.

21. Impact of Medicaid Reform
Capitalize on your current opportunities and value:
You can provide services for Medicaid health plans at no cost to them
You can help them provide care coordination through your collaboration
Substance Abuse agencies are vital to health care service delivery.

22. Impact of Medicaid Reform
Discussion:
What have we accomplished ?
How can we move forward ?
What other opportunities are there ?
How can we work together to be successful ?
What do we need to know ?

23. Impact of Medicaid Reform
Celeste Putnam Health Care Services and Systems Consultant Department of Children and Families