Developing Medicare and Medicaid Substance Abuse Treatment Spending Estimates. B. Part a & B FFS Expenditures


Medicare's Chronic Condition Warehouse (CCW) can provide claims data to estimate total Medicare SA treatment spending for traditional Medicare FFS beneficiaries. Data files with 100 percent of FFS beneficiaries are available, as well as sample files. However, use of SA treatment is rare in the population ages 65 and older. Thus, there may be an insufficient sample of users to develop precise estimates in smaller states if a sample file is used. However, the 5 percent sample should provide sufficient precision for national estimates of SA treatment expenditures.

We recommend using the CCW Institutional and Non-Institutional claims files to estimate SA treatment spending in institutional and non-institutional settings, respectively. In parallel to the analysis of Medicaid SA treatment spending, we recommend that SA expenditures be divided into the following six types:

  • Core--Services included in the Substance Abuse and Mental Health Services Administration's (SAMHSA) definition of SA treatment.

  • Fetal exposure--Medical services primarily resulting from fetal exposure to alcohol or drugs. We expect that few of these services will be identified in the Medicare population, however, they are included as a separate category to parallel the Medicaid estimates.

  • Poisoning--Medical services primarily resulting from poisoning by alcohol or drugs.

  • Supplemental--Medical services primarily related to medical conditions fully attributable to alcohol or drug use.

  • Mental health claim with secondary SA diagnosis--Individuals with an SA disorder often have a co-morbid mental health condition. Thus, it will be desirable to identify claims with a primary mental health diagnosis and a secondary SA diagnosis.

  • Other claim with secondary SA diagnosis--Expenditures on these claims are related primarily to a medical condition other than SA; however, the SA co-morbidity increases the cost of this care to the Medicare program.

SA treatment claims within each of these types will be identified based on diagnosis code. Appendix A, Table A.1 and Table A.2, list diagnosis codes indicating SA treatment. For the first four SA treatment types only the first listed diagnosis on the Medicare claim should be examined. The final column of the Table A.1 and Table A.2 identifies which of these four SA treatment types is associated with each diagnosis code (Core, Fetal, Poisoning, or Supplemental). Claims will be assigned to the fifth group if they have a first listed mental health diagnosis, including any of the codes listed in Table A.3, and a secondary or later diagnosis listed in Table A.1 and Table A.2. All other Medicare claims with a secondary or later diagnosis in Table A.1 and Table A.2 will be classified into the sixth category.

Once claims with an SA diagnosis are identified, the total Medicare payment amount will be summed across the claims to determine the Medicare expenditures for these services.

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