Insurers Can Increase Substance Abuse Services Thanks to Medicaid Funding Waiver

New federal waivers allowed Virginia’s state officials to sidestep antiquated Medicaid rules and provide many more treatment options for people with substance abuse problems, STAT reports. In doing so, the state also made it easier for health plans to serve more people.  

Medicaid was launched way back in 1965 and it shows. One of its rules cuts off Medicaid funding to facilities that treat mental illness or substance abuse and that have more than 16 beds. “That rule means providers have a financial disincentive from serving more clients,” STAT reports.

But in 2015, federal waivers were made available to states and those waivers provide funding for addiction services not covered by Medicaid. Virginia officials applied for the waiver this year, and got it. The new funding began flowing April 1 and its impact is already being felt.

Example: A few months ago, a resident of Virginia who was a Medicaid beneficiary had four facilities available if he wanted to be placed in a residential treatment program for substance abuse. Now, that resident has 71 such facilities to choose from.

Medicaid fueled the change, but more programs are being offered to people with traditional insurance as well. Katherine Neuhausen, the CMO of Virginia’s Medicaid program, tells STAT: “Medicaid has really been a catalyst for providers to develop new programs and accept any Virginian, not just Medicaid beneficiaries.”

In Lynchburg, Va., “Horizon Behavioral Health has been able to double the number of beds it has available for detox and crisis stabilization from 16 to 32 because of the policy changes,” STAT reports. “The boost in reimbursement rates also pushed it to reopen its Suboxone clinic, which it had previously shut down because the payments it used to receive didn’t cover the cost of the medication and the doctor’s time.”

Source: STAT