CMS announces new strategies to address opioid epidemic

November 27, 2017

Health Care Alert

Centers for Medicare & Medicaid Services issued a letter to states granting more flexibility for local decision making with the hope of improving access to and quality of substance abuse treatment.

On November 1, 2017, Centers for Medicare & Medicaid Services (CMS) released a letter addressed to state Medicaid Directors, which outlined the administration’s plans to improve access to and quality of substance abuse treatment for Medicaid beneficiaries. Under the administration’s new policy, states have greater flexibility to design programs that improve access to high quality, clinically appropriate treatments. Specifically, states wishing to participate in the initiative must submit an application to CMS outlining the state’s strategy to meet the goals milestones articulated in the letter. CMS will work with states through demonstrations authorized under Section 1115 of the Social Security Act (“Section 1115”).

The goals of the new initiative are:

  • Increased rates of identification, initiation and engagement in treatment;
  • Increased adherence to and retention in treatment;
  • Reductions in overdose deaths, particularly those due to opioids;
  • Reduced utilization of emergency departments and inpatient hospital settings for treatment where the utilization is preventable or medically inappropriate through improved access to other care services;
  • Fewer readmissions to the same or higher level of care where the readmission is preventable or medically inappropriate; and
  • Improved access to care for physical health conditions among beneficiaries.

The milestones of the new initiative are:

  • Access to critical levels of care for opiod use disorder (“OUD”) and other substance use disorders (“SUDs”);
  • Widespread use of evidence-based, SUD-specific patient placement criteria;
  • Use of nationally recognized, evidence-based SUD program standards to set residential treatment provider qualifications;
  • Sufficient provider capacity at each level of care;
  • Implementation of comprehensive treatment and prevention strategies to address opioid abuse and OUD; and
  • Improved care coordination and transitions between levels of care.

A key component of this new policy is reliance upon evidence-based measures and reporting results. States that fail to submit reporting as required by the letter will be subject to $5 million deferral per item.

It is worth noting that this new guidance was a result of an executive action on October 26, 2017, whereby President Trump declared the opioid crisis in America a “Public Health Emergency” and directed heads of executive departments and agencies to exercise all appropriate emergency authorities to reduce the number of deaths and minimize the devastation the drug demand and opioid crisis inflicts upon American communities.

The letter seeks to expand flexibility for states in dealing with a decades’ old federal law that restricts Medicaid dollars from being used in residential treatment facilities. Since the creation of the Medicaid program, states were prohibited from using Medicaid dollars to pay for services for non-elderly adults in behavioral health facilities with more than 16 beds known as Institutions for Mental Diseases or “IMDs.” Despite this prohibition, it has been a long-standing federal policy to permit states to use federal Medicaid funds for capitation payments to managed care plans that cover IMD inpatient services “in lieu of” other services covered under the state plan. This policy was codified under the Medicaid managed care regulations in 2016. However, states seeking to fund IMD inpatient services as part of the state plan are required to obtain waivers under Section 1115. Section 1115 allows CMS to waive Medicaid law for experimental, pilot or demonstration projects that are likely to assist in promoting the objectives of the program. Most of the current waivers for IMD services were approved pursuant to guidance made available by CMS in July 2015 that allowed states to use Section 1115 waivers to provide a full continuum of substance use disorder treatment services, including short-term inpatient and residential services. The letter released earlier this month revised and expands upon the July 2015 guidance.

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