Substance use disorder (SUD) is a pervasive and complex public health issue that affects millions of individuals across the United States. According to recent research, there are significant gaps in Medicaid SUD treatment coverage, particularly within state Medicaid managed care organizations (MCOs). These gaps threaten to leave many patients without access to the care they desperately need, ultimately hindering their recovery prospects.
SUD has a disproportionate impact on Medicaid populations, with over 20% of Medicaid enrollees experiencing SUD, compared to only 16% of those covered by commercial insurance. This troubling disparity highlights the urgency of addressing treatment gaps in Medicaid SUD treatment coverage. Unfortunately, despite the magnitude of the problem, recent findings show that at least half of the states contracting with Medicaid MCOs fail to require full coverage for the continuum of SUD treatment. This omission is not only a matter of coverage but of potentially life-altering consequences for individuals in need of critical care.
The Scope of the Problem: Medicaid and SUD Treatment Gaps
Medicaid, which serves as the largest health insurance program in the U.S., covers the majority of individuals with low incomes, including those living with substance use disorders. MCOs, which manage Medicaid benefits for most enrollees, play a pivotal role in shaping the healthcare landscape for Medicaid populations. However, these MCOs are not always required to provide comprehensive Medicaid SUD treatment coverage.
According to a study published in Health Affairs by researchers at the University of Chicago’s Crown Family School of Social Work, Policy, and Practice, significant gaps exist in the types of SUD treatments covered by many Medicaid MCOs. This research analyzed data from 34 state programs, including Washington D.C., and found that many states fail to require MCOs to cover the full continuum of care that individuals with SUD need for recovery.
The continuum of care includes a range of services that cater to patients at different stages of treatment, from initial detoxification to residential treatment, intensive outpatient care (IOP), and ongoing support through outpatient therapy and recovery services. While some states have made strides in covering certain medications for opioid use disorder (MOUD), many fail to cover all the necessary treatments and services that adhere to clinical guidelines established by medical professionals. This incomplete coverage can leave individuals with SUD without the necessary support at critical points in their recovery journey.
Why Comprehensive Treatment Matters: The Step-Down Ladder
One of the most significant risks of limited Medicaid SUD treatment coverage is the potential for patients to “fall off” the step-down ladder of care. SUD treatment is not a one-size-fits-all solution. Individuals seeking recovery often require a range of services at different stages, with each step building on the last to ensure long-term success.
An example of the importance of this continuum comes from the treatment of individuals experiencing detoxification. According to Colleen M. Grogan, professor of health policy at the University of Chicago, when an individual with SUD enters an emergency room in need of detoxification, the next step is often intensive outpatient care or residential treatment before they can transition to individual or group therapy. Without coverage for these critical step-down services, patients may experience interruptions in care that delay or prevent them from moving forward in their recovery.
“I’ve seen first-hand how a lack of appropriate step-down care can be a major setback for people in recovery,” Grogan explains. “It’s not just about detox. It’s about the continuum of care that follows to help individuals maintain their progress and avoid relapse.”
Utilization Management Techniques and Delayed Care
Another critical aspect of the research was the exploration of utilization management techniques employed by MCOs, such as prior authorization, cost sharing, and annual limits on coverage. These practices, which are meant to ensure that patients receive appropriate care, can, in many cases, create unnecessary delays in accessing treatment.
Prior authorization is one of the most concerning utilization management techniques, as it can delay the initiation of care at a critical moment when an individual with SUD is ready to engage in treatment. For individuals with opioid use disorder (OUD), this delay can have catastrophic consequences. Any delay in the administration of MOUD can result in a lost opportunity to engage in life-saving treatment.
Grogan emphasizes, “Our study shows that most states allow their contracted MCOs to conduct utilization reviews with minimal oversight or regulation. Without appropriate guidelines, we can’t know for sure if necessary services are being denied, or if people are being asked to jump through unnecessary hoops at a time when they are most vulnerable.”
These administrative burdens not only impact patients but also place significant strain on SUD providers, who are required to navigate complex and time-consuming approval processes for treatment. In some cases, these policies, such as “fail-first” requirements, mandate that patients first attempt a less effective treatment before being authorized to receive alternative therapies. This often leads to delays in treatment and suboptimal outcomes for patients.
Lack of Transparency and Patient Education
Another significant challenge identified in the research is the lack of transparency regarding Medicaid MCOs’ treatment coverage and benefits. Peterson noted that accessing data about managed care plans is extremely difficult, even for researchers, and this lack of transparency also negatively affects patients who are trying to navigate the complexities of their benefits. Without clear information about the types of services covered by their plan, patients may be unable to make informed decisions about their care or select the most appropriate plan for their needs.
This lack of transparency is a barrier to patient empowerment. As Peterson explains, “Patients often don’t understand what is covered, what their options are, or how to effectively navigate their treatment journey. This lack of information not only puts them at a disadvantage but also hampers the ability of researchers and policymakers to create effective, evidence-based solutions.”
The Role of CMS and Recommendations for Policy Change
One of the most important findings of the study was the need for the Centers for Medicare and Medicaid Services (CMS) to require Medicaid MCOs to provide comprehensive Medicaid SUD treatment coverage. Currently, while CMS mandates that MCOs cover MOUDs, it does not require coverage for the full continuum of care that adheres to clinical guidelines. As Grogan points out, “CMS has made little progress in overseeing the Medicaid MCO contracts across states. With 75% of Medicaid enrollees in managed care, the vast majority of individuals with SUD are currently being overlooked.”
Researchers argue that CMS must take stronger action to address these gaps in Medicaid SUD treatment coverage. This could include mandating that MCOs cover all services that are part of the recognized continuum of care for SUD, from detoxification and residential treatment to outpatient care, recovery support, and follow-up services. By implementing these changes, CMS can help ensure that Medicaid enrollees have access to the full range of services they need to recover.
The Need for Policy Change and Greater Oversight
Addressing these gaps requires a multifaceted approach. States must take steps to ensure that Medicaid MCOs are held accountable for providing comprehensive, evidence-based treatment that adheres to clinical guidelines. This includes reducing reliance on utilization management techniques that delay or limit access to necessary care, as well as increasing transparency in the MCO contracts to ensure patients and providers have access to the information they need.
Additionally, there must be increased patient education to help individuals understand their benefits, make informed choices about their treatment options, and navigate the complex healthcare system with confidence. Policymakers must work together to improve the landscape of substance use disorder treatment in the U.S., ensuring that individuals with SUD are not left behind due to bureaucratic barriers or limited access to care.
Conclusion: A Call to Action
The gaps in Medicaid SUD treatment coverage across Medicaid MCOs represent a significant and urgent issue that requires immediate attention. With SUD disproportionately impacting Medicaid populations, it is critical that policymakers, healthcare providers, and government agencies take action to ensure that individuals with SUD have access to the full continuum of care they need. By addressing these gaps, improving transparency, and enhancing oversight, we can help thousands of individuals receive the care they deserve and give them a fighting chance at long-term recovery.
