California’s Bold New Steps For Treating Drug And Alcohol Use Through Medicaid: Lessons Learned

In late 2016, the US Surgeon General issued a groundbreaking report on drug and alcohol addiction. It was inspiring to see the nation’s top doctor sound the alarm about substance use—including the need to treat it as a chronic illness and to effectively integrate care for addiction with our broader health and mental health care systems.

The report was especially timely given that we’d just passed the one-year mark of California’s implementation of an ambitious new Drug Medi-Cal Organized Delivery System waiver. In August 2015, California became the first state to receive federal permission to improve and expand substance use treatment and recovery services through a Medicaid Section 1115 waiver.

The rationale for using Medi-Cal (California’s Medicaid program) to tackle this issue is strong, given its remarkable expansion under the Affordable Care Act (ACA). Throughout our state, Medi-Cal now has more than 13 million enrollees, according to a recent Los Angeles Times article, and an estimated 12 percent of adult Medicaid beneficiaries in the United States have a substance use disorderTwo of the top reasons for Medicaid thirty-day hospital readmissions, nationally, are related to substance use disorders.  In California, and across the country, we are facing a growing opioid epidemic, and drug overdose is now the leading cause of death from injury—making it even more deadly than traffic accidents are.

Medicaid is also a vital program for those re-entering our communities from the criminal justice system, those experiencing homelessness and domestic violence, and those who are working their way toward economic self-sufficiency. The ability to connect these different populations to effective coordinated care and substance use treatment through Medicaid is not only important for the well-being of those most in need, it can potentially drive success and cost savings in other important public programs.

While federal dollars and state leadership are critical to the ongoing success of California’s landmark Drug Medi-Cal Organized Delivery System, the implementation is locally driven. County behavioral health agencies can “opt in” to participate in important pilots. At the time of this writing, eighteen California counties have submitted their plans and are in varying stages of the approval process. Each pilot will run through 2020 and will be evaluated for its effects on access to care and patient health outcomes.

The Drug Medi-Cal Organized Delivery System is also transformative in that it grounds care delivery in specific criteria developed by the American Society of Addiction Medicine. It offers expanded evidence-based services such as residential treatment (multiple levels of care for all enrollees and no bed limitation) and withdrawal management, as well as new services such as recovery services and case management. Additional medication-assisted treatment and partial hospitalization are optional new services.

Blue Shield of California Foundation has, and continues to be, committed to the effective implementation of the ACA, including dedicated support for the Drug Medi-Cal Organized Delivery System and the vital services it offers to vulnerable populations throughout California. Through our early funding, we are identifying what it will take to harness multiple health systems as we work to collectively address drug and alcohol dependency.

Lessons Learned

Visionary Leadership Matters

The Centers for Medicare and Medicaid Services (CMS), the Substance Abuse and Mental Health Services Administration, and the California Department of Health Care Services have led the way at the policy level, and visionary county health care leaders have seized the Drug Medi-Cal Organized Delivery System waiver as an opportunity to build a system of care they’ve been working toward “for 30 years,” according to one substance use disorder program administrator.

To advance this effort, Blue Shield of California Foundation invested in a forum for county leaders to help these early adopters share outcomes and lessons learned as they develop local plans and build new systems of care. From this forum, some of the key issues that have emerged include the need to develop a stronger managed care infrastructure (or partner with health plans to create it); ensure that there is provider network adequacy to deliver new and expanded services; improve data collection on patient outcomes through the use of more robust electronic health records; and consider a new managed care infrastructure and culturally responsive approaches that will meet the unique needs of tribal communities.

Strong Provider Networks Are Crucial

When it comes to treating substance use effectively, no one organization or agency can do it alone. Recognizing this, a large part of our grant making has supported relationship-building among primary care, mental health, and substance use treatment providers and payers, alongside a variety of county agencies. Often, these providers underestimate the resources that are already available in their communities because they simply aren’t aware of all of the services that each of them provides. Once they get to know and trust one another, true partnerships begin to take shape, and they’re able to work together more effectively on behalf of the patients they all aim to serve. Many partnerships have already developed resource directories with information about available services, are sharing data and tracking referrals, and have brokered new subcontract and co-location agreements that make services more readily available for patients.

What we’ve learned from this work is that a combination of state and local policy incentives, coupled with flexible philanthropic dollars, can provide the resources needed to support stronger, more integrated provider networks in our communities.

Stigma Is Real, But Access Can Help

In addition to greater collaboration, improving both screening for substance use and access to treatment in primary care remains critical to reducing the stigma that still surrounds the issue of addiction and prevents many patients from seeking help. Both primary care and mental health providers must acknowledge their role and responsibility in addressing addiction, as well as the need for new training on the science of the disease, effective implementation of Screening, Brief Intervention, and Referral to Treatment (SBIRT), and the use of chronic disease management tools for tracking progress.

Providers also need to be attuned to potential disparities in access. Recently, when we provided a grant to engage communities of color around their preferences for and experiences with substance use treatment, we discovered fears of discrimination. Communities expressed concern that disclosing substance use or enrolling in treatment could impact their ability to receive other needed supports, like housing or food subsidies. They also cautioned against treating addiction without also developing better prevention strategies that could halt substance use from occurring in the first place.

We Need New Methods For Measuring Success

The foundation invested in a partnership between two leading-edge providers of substance use treatment to engage both patients and medical staff in the process of co-designing a new way to track and evaluate the effects of treatments. Through in-depth discussions with clients and families, providers discovered that traditional metrics for success didn’t match-up with what actually mattered most to their patients. It wasn’t enough to know whether they completed their recovery program, or even stayed sober.

Clients emphasized that much of the harm from addiction has to do with how it ruptures their sense of self—being honest, having excitement for life, and maintaining relationships. This is part of what is lost in addiction and what they hope to gain back in recovery. They also pinpointed specific stages of motivation and vulnerability in the care continuum that could help predict progress or stumbling blocks throughout treatment and recovery. These findings point to new client-centered approaches for measuring outcomes in substance use treatment.

The Power And Potential Of Medicaid

States can, and must, do more on their own to improve and integrate behavioral health care services with primary care for those most in need, but only Medicaid can help us move mountains. Medicaid has the potential to be a game-changer in the realm of substance use because it creates incentives that are strong enough to overcome historical barriers between systems and providers. Medicaid supports access to continuous, evidence-based care for substance use through structuring it as an entitlement, rather than a grant program where a waiting list develops when the funding runs out.

With so much uncertainty around the ACA at the federal level, it’s critical that state leaders and foundations step up and work together to ensure that Medicaid reaches its full potential in helping us curb the epidemic of addiction and improve the overall health of our communities.

The Surgeon General’s report lays out a vision for care that state Medicaid programs should seize and drive forward. Here in California, we’re committed to making that vision a reality.

Related Reading:

Alexa Eggleston of the Conrad N. Hilton Foundation, “Facing Addition In America: It’s About Time,”Health Affairs Blog, GrantWatch section, December 16, 2016.

Christina Andrews of the University of South Carolina and coauthors, “Lessons from Medicaid’s Divergent Paths on Mental Health and Addiction Services,” Health Affairs, July 2015.

Colleen Grogan of the University of Chicago and coauthors, “Survey Highlights Differences in Medicaid Coverage for Substance Use Treatment and Opioid Use Disorder Medications,” Health Affairs, December 2016.



This blog originally appeared in Health Affairs' Grantwatch Blog on January 26, 2017

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