Emergency Alert: Substance Use Safety Net in Trouble

In April, the Biden Administration released a Statement of Drug Policy Priorities, outlining areas of improvement and policy priorities necessary to address the nation’s opioid epidemic. The statement was followed up in May by the Substance Abuse and Mental Health Services Administration (SAMHSA) announcing $3 billion in block grants to be distributed to states as emergency funding related to the American Rescue Plan Act, passed in March. The press release from SAMHSA highlighted preliminary data from the Centers of Disease Control and prevention (CDC) showing an estimated 90,000 overdose deaths in 2020, a 20,000 overdose death increase from 2019. Belying the nature of “emergency”, the SAMHSA announcement came 2 months after President Biden signed the American Rescue Plan Act, the release did not include a timeline for these block grants to be received by states or any indication from SAMHSA that guidance attached to use of these funds would be forth coming. That’s a problem for substance use treatment service providers who have been struggling to keep their doors open and services flowing throughout the COVID-19 public health emergency.

According to Michael Pickering, executive director for Regional Addiction Prevention, Inc. (a residential treatment program in Washington, D.C.), residential programs had to cut the available number of patients who could be housed at any given time, in order to help slow the spread of COVID-19 and reduce risks of clients and staff contracting the virus while restrictions were in place. That meant revenue necessary to operate shrunk dramatically. However, in order to maintain a minimum number of services, not many staff were reduced. Ultimately, these combined factors underscored a long-term issue as the agency faces potential closure: private and public payer rates for are so low that even the slightest emergency could be catastrophic for many substance use service providers.

Indeed, the Centers for Medicare and Medicaid Services (CMS) last adjusted addiction treatment services reimbursement rates for inflation in 2016 – meaning the “basement” for reimbursement hasn’t increased in 6 years while the rest of costs associated with providing care have grown. According to one entity, CODAC Behavioral Healthcare, reported reimbursement losses of nearly 40% from Medicaid on a 45-minute treatment session. The same report cited the American Society of Addiction Medicine (ASAM) as stating Medicaid as the largest payer of medication assisted treatment (MAT) for opioid use disorder, accounting for anywhere between 35 and 50% of services provided in the hardest hit states.

Tucked among Biden administration priorities in drug policy is a familiar statement regarding racial equity in health care. At the intersection of disparities in access to care and lack of health equity along racial lines is Medicaid’s low reimbursement rate. A study, included in the Statement, specifically highlighted how few private providers accept Medicaid for substance use treatment, opting instead for “cash-pay only” policies, resulting in a concentration of services provided to white people and leaving an unmet need among people of color, who have also been disproportionately impacted by the COVID-19 pandemic.

While the Biden administration also cited a need to recruit and retain medical providers and staffing talent to stigma, low reimbursement rates also translate to low compensation relative to other areas of health care and substance use services require more time to functionally provide for the needs of a client than other areas of health care. This leaves clinics and providers serving the public with an exceedingly high turn-over rate; CODAC cited a near 50% turnover rate for 2019. Just as with federally qualified health centers, compensation rates tied to clinic revenue (reimbursement rates) and grant awards that aren’t meaningfully increased, can’t compete in terms of compensation – the private sector, focused on profit margins and serving well-to-do clients, can readily recruit skilled talent from public service entities with more attractive compensation packages.

The administration’s priorities in drug policy are lofty and admirable, with a comprehensive map on moving forward. However, getting these resources – especially emergency funding - to entities providing critically necessary services seems to be a major barrier the administration doesn’t seem to have a good plan to deal with. Just as with the emergency rental assistance monies allocated under the American Rescue Plan, emergency monies are slow to reach substance use service providers in dire need, risking destabilizing an already weak safety net. Regional Addiction Prevention, Inc. provides just one example of an entire industry at risk, where funds are bottlenecked at the local agency distribution level. Earlier this month, advocacy organizations from around the country and service providers in D.C. wrote to the Mayor and City Council urging an expedited process to ensure emergency funds for these services were distributed in a more timely fashion.

The Biden administration can set all the goals in the world and even secure funds from Congress, but these goals won’t be met on a one-time funding or periodic “emergency” funding basis. The administration needs to provide funding distribution guidance commiserate with the urgency of keeping public addiction service providers afloat, ensure the country’s annual budget reflects these priorities, and increase Medicaid reimbursement rates to reflect these policy priorities.