America’s opioid crisis and the Covid pandemic have renewed calls from lawmakers and advocates to modernize and expand Medicare’s behavioral health coverage. And the Biden administration is listening.
The Medicare physician fee schedule proposed rule for 2023 suggests changes are coming to Medicare’s coverage of treatment for mental health and substance use disorders when the final rule is released. It’s expected next week.
Roughly 1.7 million Medicare beneficiaries had a substance-use disorder in the past year, a recent study estimated. And even though they were much more likely to have had serious psychological distress and suicidal thoughts, only 11% received treatment. The problem isn’t new.
Medicare doesn’t cover the full range of services, providers, and settings for the treatment of substance use disorders, or “SUDs”.
It “effectively excludes coverage” for substance use disorder treatment in intensive outpatient programs, specialty addiction outpatient clinics, and residential addiction programs, according to a recent study. Medicare also doesn’t allow billing by the addiction specialists who dominate the SUD treatment workforce: licensed counselors, certified addiction counselors, and peer counselors.
And because the Mental Health Parity and Addiction Equity Act doesn’t apply to Medicare, the program isn’t required to offer substance use disorder and mental health benefits at the same level as medical and surgical care benefits. That’s in stark contrast to most private and job-based health insurance—and even Medicaid plans—that are covered by the law.
Attention From Lawmakers, Regulators
As Covid-19 and opioid overdose deaths mount, Medicare’s coverage gap for behavioral health services is getting new attention from regulators and lawmakers.
Last month, the House Ways and Means Committee marked up six bills aimed at bolstering Medicare mental health coverage. And last week, Sen. Richard Durbin, and Rep. Lauren Underwood, both Democrats from Illinois, called on Medicare to act “swiftly and comprehensively” to “explore pathways to expand access to residential substance use disorder services provided by treatment programs that offer evidence-based care.”
The Biden administration is looking at the issue as well. Buried in the 2,000-page Medicare proposed rule, the Centers for Medicare & Medicaid Services seeks feedback on whether a “gap” in Medicare coding and payment mechanisms “may be limiting access to needed levels of care for treatment of mental health or substance use disorder treatment, including and especially substance use disorders, for Medicare beneficiaries.”
“We are particularly interested in the extent to which any potential gaps would best be addressed by the creation of new” billing codes, or the “revision of particular billing rules for some kinds of care in specific settings,” the proposal said.
The agency also inquired whether other coding adjustments are needed “to better reflect the relative resource costs involved in furnishing intensive outpatient mental health services.”
Continuum of Care
Intensive outpatient mental health services is part of a “continuum of care” developed by the American Society of Addiction Medicine. Medicare now covers only the least intensive types of treatments on the continuum: early intervention and outpatient services, along with the most intensive type: inpatient services, said Deborah Steinberg, a health policy attorney at the Legal Action Center, a nonprofit law and policy organization.
Adding Medicare coverage of “intensive outpatient” services—which entails nine to 19 hours of treatment services per week—would fill a large void in the program’s current coverage offerings, she said.
“It’s a little bit more intensive than someone who just gets weekly counseling, but not at the level where someone is in residential treatment. And that is something that we are very confident that CMS could do on its own without needing congressional approval,” Steinberg said.
The CMS doesn’t comment on proposals during the rulemaking process.
People in intensive outpatient programs for substance use disorders receive an individualized treatment plan, individual and group counseling, medication management, family therapy, and participate in education groups and occupational and recreational therapy.
Intensive Outpatient Services
On another front, Rep. Judy Chu (D-Calif.) has introduced H.R. 8878, which would create a Medicare benefit category for intensive outpatient services.
At a recent House Ways and Means Committee hearing, Chu’s bill was passed favorably out of committee. Chu, a psychologist, said at the hearing that Medicare applies significant restrictions—like requiring beneficiaries to be eligible for inpatient care—before covering intermediate treatment services for enrollees with substance use disorders.
“This has the unintended consequence of excluding many Medicare patients from the type of mental health services that are most appropriate for their condition and level of care,” Chu testified. “This is one of the many glaring gaps in the Medicare program that prevents mental health coverage from being at parity with physical health.”
Chu’s legislation would allow outpatient hospitals, community mental health centers, rural health centers and federally qualified health centers to deliver intensive outpatient services so that “patients can access care in the facilities that best meet their needs,” she said at the hearing.
Rep. Adrian Smith (R-Neb.), a co-sponsor of the bill, said at the hearing he “hopes to see its eventual enactment in a larger bipartisan mental health care package before the end of the year.”
Savings May Offset Costs of Changes
It would cost about $928 million a year to provide intensive outpatient coverage for the 116,000-plus beneficiaries with substance use disorder, according to research by RTI International, a nonprofit research institute, in partnership with the Legal Action Center.
Adding nearly 76,000 residential treatment stays would cost $935 million, and nearly 59,000 sessions with counselors would cost another $66 million, the study estimates.
But those outlays would be nearly offset by savings of roughly $1.6 billion a year in spending for drug-related ailments, hospitalizations, and ER visits, the study estimates.
Of the 1.7 million beneficiaries with a SUD, an estimated 77% struggled with alcohol use, 16% with prescription drugs and 10% with a marijuana-use condition. Forty-one percent cited lack of motivation as the reason they didn’t seek treatment, 33% were concerned about what others might think, and 24% identified logistical barriers, like transportation.
The SUPPORT for Patients and Communities Act of 2018 created a new benefit category that in 2020 allowed Medicare coverage of opioid treatment programs that provide methadone and other medications that treat opioid use disorder.
But of the 1 million-plus beneficiaries with opioid use disorder in 2021, fewer than 20% received medication to treat it, the Department of Health and Human Services’ Office of Inspector General reported in September. “This low proportion may indicate that beneficiaries have challenges accessing treatment,” the OIG data brief said.
