Blending Perspectives and Building Common Ground

A Report to Congress on Substance Abuse and Child Protection

April 1999

Appendix A

Medicaid Services for Substance Abuse Treatment

Under Medicaid, States are required to provide a series of mandatory services, and may, should they so choose, provide an additional series of optional services. States define the details of what is provided under both the mandatory and optional services and may place limits on these services. Substance abuse treatment may be offered in a variety of forms under several mandatory or optional benefits.

Mandatory Medicaid Services

States may fund substance abuse treatment in many forms through the mandatory benefits required by the Health Care Financing Administration. Those benefits that are most relevant for substance abuse treatment include:

Inpatient hospital services - services available at general hospitals, including psychiatric units of general hospitals.

Outpatient hospital services - services available through outpatient departments of general hospitals or of psychiatric hospitals qualified to participate in Medicaid.

Rural health clinic (RHC) services - services at special clinics in rural areas in States permitting RHC's;

Early and periodic screening, diagnosis and treatment (EPSDT) services - regularly scheduled screening examinations to determine the presence of developmental disorders or chronic conditions for beneficiaries under age 21;

Nursing Facility services - services in licensed nursing homes for people over age 21;

Home Health services - care provided in the home, including part-time nursing services of a home health aide, and medical supplies and equipment used in the home; and at least one of the following optional home services: physical therapy, occupational therapy, speech pathology, and audiology services for individuals over age 21;

Physician services - services of physicians, including psychiatrists.

Optional Services

Optional services allow States to tailor their Medicaid programs to meet specific State objectives. States have chosen to use coverage for optional services in varied ways to support substance abuse services. Optional services that are particularly relevant include clinic services, rehabilitation services, other practitioners services, therapy services, prescribed drugs, personal care services, transportation services, case management services, inpatient psychiatric services for under age 21, and IMD services for over age 65.

Options available under Medicaid allow States to support many of the elements of substance abuse services that have been demonstrated to be cost-effective alternatives to inpatient care. This is most clearly the case for outpatient alcohol and drug treatment, which can be provided as clinic or rehabilitative services. In addition, other optional services, such as services of psychologists and psychiatric social workers, occupational therapy, personal care, transportation, and targeted case management, can be used to support such programs.

Additionally, States may provide home and community-based waiver services to individuals who would otherwise be institutionalized. These services are designed to maintain persons in their communities. They may include those, such as respite care, that are not normally available under the Medicaid program or to other enrollees within the State.

Medicaid Managed Care Programs⁽¹⁾

Increasingly, States are using managed care programs for their Medicaid populations. Managed care is emerging as the principal means for financing and delivering physical and behavioral health care services under Medicaid (Lewin Group, 1997). As of the spring of 1997, a number of things could be said about substance abuse services in Medicaid managed care programs. These include:

33 States and the District of Columbia had Medicaid managed care waivers implemented or approved that included some form of behavioral health services: Alabama, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Hawaii, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Virginia, Vermont, Washington, and Wisconsin. Fourteen of these States and the District provide behavioral health services through Section 1115 waivers. Twenty-two of these States and the District do so using Section 1915(b) waivers. (There is some overlap among these two groups.)
30 of these 33 States and the District had the same or a greater scope of mental health and/or substance abuse benefits under the waivers, compared to their fee-for-service systems.
13 States and the District of Columbia covered substance abuse services under approved or implemented Section 1115 waivers: Alabama, Arizona, Delaware, Hawaii, Maryland, Massachusetts, Minnesota, Ohio, Oklahoma, Oregon, Rhode Island, Tennessee, and Vermont.
14 States and the District of Columbia covered substance abuse services under approved or implemented Section 1915(b) waivers: Connecticut, Iowa, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, North Carolina, Pennsylvania, South Dakota, Texas, and Wisconsin.
The following States specifically listed children for whom adoption assistance or foster care maintenance payments are made among their targeted populations for Medicaid managed behavioral health care waivers: Arizona, Florida, Illinois, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, and Utah (inpatient services only). Some other States include these children under broad populations covered under Medicaid managed behavioral health care waivers.

1. Information in this section is derived from The Lewin Group (1997). State Profiles on Public-Sector managed Behavioral Health Care and Other Reforms. Washington, DC: Substance Abuse and Mental Health Services Administration.

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