Majority of Medicaid MCOs Delegate SUD Treatment Benefits

A large majority of Medicaid managed care organizations (MCOs) delegate responsibility for managing substance use disorder (SUD) treatment benefits to separate organizations such as behavioral health organizations or state fee-for-service programs, a study in the Journal of Substance Use and Addiction Treatment (JSAT) has found. These arrangements, known as carveouts, often aim to lower costs to the state or expand services when the MCO does not have an extensive network of appropriate specialists. But experts say that depending on how the arrangement is implemented and the services available, carveouts also have the potential to affect access to care.

“There could be a big hassle in figuring out what is covered,” said lead author Allie Silverman, M.P.H., M.S.W., a third-year doctoral candidate at the Heller School for Social Policy and Management at Brandeis University. “It took us 12 different, intricate steps to determine which services were incorporated into the carveout plans. If we were having difficulty with this as researchers and people who dedicate a lot of time to understanding it, it would be incredibly difficult to do as a patient.”

Silverman and colleagues analyzed SUD treatment coverage of 70 comprehensive Medicaid MCO plans active in 10 states in 2018. They defined SUD treatment as both SUD services (inpatient hospitalization, regular or intensive outpatient care, residential treatment, and SUD assessment) and medications for opioid and alcohol use disorders.

The researchers found that the Medicaid managed care plans carved out SUD services and treatment as follows:

• 40% carved out all SUD treatment services.

• 28.6% carved out at least some SUD treatment services.

• 14.3% carved out all SUD medications.

• 77.1% carved out some SUD medications.

Treatment services were most often carved out to behavioral health organizations, and most medications were carved out to state Medicaid fee-for-service plans. Only 8.6% of plans did not carve out any treatment services or medications.

“Given that about 70% of Medicaid enrollees receive care through managed care organizations, I can’t overstate how many patients could be affected by this,” Silverman said. “For example, they may need certain services like inpatient treatment and only one place in their county [is reimbursed] through the carveout. It’s an additional burden on patients who have SUD and are already balancing a lot in their lives.”

Silverman and colleagues found a wide variation between and within states regarding which services were carved out and how often. For example, 100% of MCOs in Maryland carved out all SUD treatment, but plans in Ohio covered, or carved in, all SUD services and medications except methadone. The most frequently carved out service was residential services, wherein 72.2% of plans that covered residential treatment carved it out. In contrast, only 53.8% of plans that covered assessment carved it out. Overall, 95.2% of plans that covered methadone treatment carved it out, but only 20.6% of plans that covered naloxone carved it out.

Carveout vs. Carve In

“This [research] highlights that SUD services continue to be primarily segregated in Medicaid, with apparently more frequency than for mental health services, where carveout arrangements have shifted more recently to carve-in or integrated models,” said Jane Zhu, M.D., a primary care physician and associate professor of medicine in the Division of General Internal Medicine at Oregon Health & Science University, who was not involved in the study. Zhu is a co-author of a 2021 study published in Health Services Research that found that patients whose Medicaid managed care plans carved in behavioral health were more likely to access outpatient behavioral health services than patients whose plans carved out behavioral health.

Zhu said that carved in and carved out services have different trade-offs for different populations.

“Carve-in arrangements may rely more on broader networks of care—for example, primary care providers like myself—which in turn provide greater access to medical and behavioral health needs, including SUD in those with less complex conditions. But the trade-off is potentially less capacity or less training or specialization of care to address the needs of those with more serious or complex conditions,” Zhu explained. “In contrast, carveouts may offer access to more specialized care, but they also introduce more complexity for patients and providers.

“Regardless of the financing arrangement, policymakers should be focused on ensuring that barriers to SUD care are minimized across a continuum of services and settings, particularly as we grapple with a continued opioid epidemic,” Zhu added.

Helping Your Patients

Silverman said that psychiatrists and other behavioral health professionals who participate in Medicaid should familiarize themselves with what is included in their patients’ plans before referring patients for services.

“If you’ve seen one Medicaid plan, you’ve seen one Medicaid plan,” Silverman said. “Don’t assume that one plan in your state will look like another plan in your state, or that something will be covered even if you’ve seen it covered on the plan before.”

Jeffrey DeVido, M.D., a former member of APA’s Council on Addiction Psychiatry, said that understanding the local Medicaid SUD treatment environment is critical to being able to help Medicaid patients navigate the system into treatment.

DeVido, chief of addiction services for the Marin County Department of Health and Human Services in California and behavioral health clinical director for Partnership HealthPlan of California, added that focusing locally is more manageable for the psychiatrist.

“Recognizing that the system may vary significantly from state to state, managed care organization to managed care organization, and even from ZIP code to ZIP code can help focus a psychiatrist’s learning curve such that they’re not trying to understand the system everywhere, but rather just the system of which they are a part,” DeVido said.

He added that the MCOs themselves often have care coordinators or other care navigators, and that in some systems, independent recovery coaches or case managers can also help shepherd patients to the correct treatment venue.

Silverman said that connecting patients with case managers, peer support specialists with lived experience working in the system, and other navigators may help ensure that patients get the help they need.

“Figuring all of this out on their own can be time-consuming if [patients] don’t know where to begin or what to look for. Some may feel it is too difficult, and some may not even realize they can get care,” she said.

The JSAT study was supported by the National Institute on Alcohol Abuse and Alcoholism and the National Institute on Drug Abuse. The Health Services Research study was supported by the National Institute of Mental Health and the National Institute on Minority Health and Health Disparities. ■