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Medicare’s Addiction Coverage Gaps Prompt Calls for Change

Feb. 16, 2021, 10:30 AM

Access to affordable care is a key to treating people with addiction, but adults 65 and older may have a hard time getting Medicare to cover the treatment they need.

Advocates for people with addiction say the federal program is falling short on covering some of the standard intermediary treatments recommended for substance use disorders and they’re hoping the new Congress will be open to making some legislative changes to fix a problem that’s been heightened by the opioid epidemic and exacerbated by Covid-19.

Over 1.2 million people 65 and over had a substance use disorder diagnosis in 2019, but only 284,000 of them received any substance use treatment that year, according to a new report from the Legal Action Center. Limited access to addiction treatment and providers means Medicare beneficiaries may have to shell out thousands of dollars for care or go without.

“Most of the settings where people are receiving substance use disorder treatment aren’t covered because Medicare doesn’t reimburse for freestanding substance-use disorder clinics,” said Deborah Steinberg, a health policy attorney at the Legal Action Center, a nonprofit law and policy organization that fights for people with criminal records, substance use disorders, and HIV or AIDS.

“Medicare does reimburse for services generally if they’re provided in a hospital or an office, and more recently in 2020 it started reimbursing opioid treatment programs, but that excludes most places,” she said.

In their report, Steinberg and her colleague Ellen Weber found Medicare is lacking coverage of important components of substance use recovery, including intensive outpatient treatment that allows people to live at home and continue working while they get the help they need. This type of care is considered standard by the American Society of Addiction Medicine.

Access Issues

George Kolodner, who designed the first intensive outpatient program for addiction treatment in the U.S., has seen this firsthand as founder and chief innovation officer of Kolmac Outpatient Recovery Centers. Patients either age out of care or find out how much they’ll have to pay out of pocket and walk away.

“When we tell them, ‘You’re 67. If you had come three years before, no problem, but now, instead of it costing you $500, it’s going to cost you $7,000, and we can work out a payment plan with you.’ They say, ‘No thank you,’” he said.

“Frankly, I don’t know where they go.”

In addition to intensive outpatient treatment, Medicare doesn’t cover the full range of practitioners used to treat addiction, including licensed counselors, certified addiction counselors, and peer counselors. This leads to a shortage of providers, which drives up health-care costs for seniors, the Legal Action Center report said.

“We hear about issues from people who are not getting access to care and from professionals who want to be able to bill Medicare,” said Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center. “We think that is an area that Medicare needs to expand into.”

But where to draw the line on which providers make the cut could be a harder question to answer.

“More providers are needed,” Schwarz said. “Medicare also has a responsibility to ensure that the providers are real providers. I don’t think we want a world in which we say federal health insurance has to pay anyone who says, ‘I’m a counselor.’”

Legislative Changes

In their report, Steinberg and Weber recommend that Medicare authorize reimbursements for licensed counselors and require adequate networks of providers and facilities to treat Medicare beneficiaries.

Their report also recommends that Congress expand the Mental Health Parity and Addiction Equity Act to include Medicare and Medicare Advantage plans.

The law forces most private and employer-based insurance—and Medicaid plans—to offer substance use disorder and mental health benefits at the same level as the benefits they offer for medical and surgical care. It does not currently apply to Medicare.

But it won’t be enough just to get the parity act applied to Medicare, said Weber, the Legal Action Center’s vice president for health initiatives.

“Because of the way the statute is written, there will need to be other statutory changes that articulate that the particular provider types that aren’t covered now are covered under Medicare law, so we would still need to be taking that step,” she said.

Applying the parity act to Medicare would require getting rid of the 190-day limit on inpatient psychiatric care in Medicare’s “Part A” coverage of inpatient hospital services, said Andrew Sperling, director of legislative and policy advocacy at the National Alliance on Mental Illness.

Doing so would have a cost attached, which would have to be offset, requiring a detailed economic analysis, he said.

Schwarz agrees Medicare’s coverage of mental health and substance use disorder treatment is lacking.

But Congress and the Centers for Medicare & Medicaid Services can act directly to address specific gaps in Medicare’s coverage “to meet those unmet needs without necessarily using the Mental Health Parity Act as the mechanism for doing that,” she said.

“I’m not ready to say one path or the other is the better way.”

To contact the reporters on this story: Lydia Wheeler in Washington at lwheeler@bloomberglaw.com; Tony Pugh in Washington at tpugh@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Brent Bierman at bbierman@bloomberglaw.com; Karl Hardy at khardy@bloomberglaw.com

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