As federal and state substance abuse (SA) agencies work to establish priorities and coordinate their efforts, policymakers need reliable national and state estimates of Medicaid and Medicare SA treatment spending and accurate methods for projecting these estimates forward. Spending estimates and projections are essential for both aligning funding with policy objectives and developing realistic budgets to support treatment and prevention. Given these needs the Office of the Assistant Secretary for Planning and Evaluation in the U.S. Department of Health and Human Services (HHS) and the Office of National Drug Control Policy (ONDCP) contracted with Mathematica Policy Research to conduct this of Medicare and Medicaid SA treatment spending. This study included both methodological and programmatic issues. This technical report addresses two methodological issues:
What methods should be used to develop estimates of Medicare SA treatment spending?
How should estimates of Medicaid SA treatment spending be projected forward when estimates derived from observed data are not available to policymakers?
A separate findings report produced under this project presents the programmatic findings of this study and addresses methodological issues related to estimating Medicaid SA treatment expenditures in Medicaid Analytic eXtract (MAX) data.
This report contains two sections. The first section presents an approach for developing estimates of SA treatment spending in the Medicare program. The second section presents methods for trending estimates of Medicaid SA treatment.