Report Finds Majority of Publicly Funded Substance Use Clinics Take Medicaid

Despite concern that few substance abuse clinics are enrolled in Medicaid, a new report finds that 64 percent of publicly funded facilities that deliver substance use disorder treatment accept Medicaid.

The report, “Understanding the Baseline: Publicly Funded Substance Abuse Providers and Medicaid,” also found that 49 states already encourage or have plans to encourage substance abuse providers’ enrollment in Medicaid. The analysis was conducted by the National Association of State Alcohol and Drug Abuse Directors’ (NASADAD) Research and Program Applications Department.

The findings are important in light of the Parity Act and the Affordable Care Act’s requirement that substance abuse services be included in the new Medicaid expansion, says Dr. Tom McLellan, Professor in the Department of Psychiatry at the University of Pennsylvania and Director of the Penn Center for Substance Abuse Solutions.

“Providers are finally getting it, and they are wisely signing up for another payment opportunity,” says Dr. McLellan. “With the coming changes in payment structure, substance abuse treatment will be transitioning into the rest of health care. Substance use disorders—not just addiction—will be eligible for treatment. It will become part of the repertoire of our nation’s 550,000 primary care physicians. We’ll see more prevention, early intervention and support services opportunities because they will be reimbursed.”

The Affordable Care Act will require treatment for substance abuse disorder services by 2014. The Parity Act does not require health plans to cover addiction or mental illness, or any specific types of treatment, but mandates that plans which do include such benefits treat these conditions on par with other illnesses. According to the law, group health insurance plans may not limit benefits or impose higher patient costs for addiction and mental health treatment than those applying for general medical or surgical benefits.

Once substance abuse treatment is integrated into the payment system for the rest of health care, treatment programs will begin getting more referrals from primary care and other physicians, according to Dr. McLellan. “We’ll see substance abuse treatment become mainstream, just as we once did for depression and AIDS.”

The NASADAD study included data from 2009 on 12,700 facilities that deliver substance use disorder treatment services in the 50 states and the District of Columbia. The study found that 7,833 facilities are publicly funded, and 4,999 of these facilities accept Medicaid as payment. The report was done in light of concern expressed that too few substance abuse providers are enrolled to receive Medicaid reimbursement. This concern was shared by NASADAD, the Substance Abuse and Mental Health Services Administration, and State Associations of Addictions Services, among others, according to the report.

The study found a great deal of variation across states in the percentage of substance abuse facilities enrolled in Medicaid. Seven states (Iowa, Maine, Montana, Rhode Island, South Carolina, Vermont and Washington) had more than 90 percent of facilities that accepted Medicaid. Twenty-seven states had 70 percent or more of the providers report that they accepted Medicaid.