Legal Action Center Issues Report Highlighting Medicare’s Discriminatory Coverage Gaps for Substance Use Disorder Treatment

Deborah Steinberg and Ellen Weber

The Legal Action Center (LAC) recently issued a report, Medicare Coverage of Substance Use Disorder Care: A Landscape Review of Benefit Coverage, Service Gaps and a Path to Reform (Feb. 2021), which highlighted the ways in which Medicare currently fails to cover essential health services for beneficiaries with substance use disorders (SUDs) – see also LAC’s blog post in Health Affairs, Medicare’s Discriminatory Coverage Policies for Substance Use Disorders (June 22, 2021).

Over 1.2 million adults ages 65 and over self-reported having a SUD diagnosis in 2019. As significant as this number is, it does not capture the hundreds of thousands of Medicare beneficiaries under the age of 65 with a SUD, as well as those who are undiagnosed or misdiagnosed. Among those who do report having a SUD, less than one in four older adults (23.6%) received any SUD treatment in 2019. Access to care and health outcomes are even poorer for Black, Indigenous, and Latinx individuals with SUDs. Furthermore, opioid overdose deaths and hospitalizations have continued to rise among older adults, even before the COVID-19 pandemic, and those rates are only expected to get worse.

In its report, LAC mapped Medicare’s benefit coverage for SUDs to the American Society of Addiction Medicine (ASAM) continuum of care criteria, finding that Medicare’s current standards do not cover evidence-based care. In particular, the report found:

• Although Medicare covers the least intensive types of treatment, such as annual screenings, brief intervention, and outpatient counseling; and the most intensive types of treatment (inpatient hospital care), intermediate levels of care are not available for Medicare beneficiaries. This bookended approach leaves many individuals without appropriate treatment options to meet their needs, such that they receive inadequate, if any, care until their conditions get acute enough to require hospitalization.

• With the exception of opioid treatment programs, Medicare fails to cover community-based SUD treatment facilities that are not affiliated with a hospital system or an authorized Medicare provider. SUD treatment has historically been segregated from other medical care and financed through separate funding streams.  While Medicaid and private insurance cover the settings that deliver SUD treatment, Medicare does not - and thereby denies care to Medicare beneficiaries.

• Medicare fails to cover many of the practitioners who treat patients with SUDs on a regular basis, including licensed professional counselors, certified alcohol and drug counselors, and peer support workers. While Medicare covers psychiatrists, psychologists, and licensed clinical social workers, these providers are exiting Medicare networks at the highest rate of all practitioners.

• Unlike most Medicaid and private insurance plans, Medicare is not subject to the Mental Health Parity and Addiction Equity Act – an anti-discrimination law that requires insurers to cover SUD and mental health care at the same level as other medical or surgical care. As a result, Medicare beneficiaries with SUDs can be – and are – subject to discriminatory financial and other treatment limitations.

In order to address these disparities and curb the growing SUD crisis, Congress must authorize Medicare coverage of the services, settings, and providers that make up the full continuum of care necessary to treat patients with these chronic conditions. Congress must also extend the Mental Health Parity and Addiction Equity Act to Medicare to prevent ongoing discrimination against beneficiaries with SUDs and mental health conditions. At the same time, the Centers for Medicare and Medicaid Services (CMS) can improve reimbursement rates and offer bundled payment models to fill in some of the coverage gaps; require original Medicare and Medicare Advantage plans to use the ASAM Criteria for medical necessity and level of care determinations to ensure that patients get the most appropriate treatment; eliminate unnecessary and burdensome prior authorization and other utilization management practices for SUD treatment; and incorporate SUD providers into network adequacy standards for Medicare Advantage plans to increase access to treatment across the country. It is time to modernize Medicare to meet the needs of people with substance use disorders, eliminate discriminatory policies, and save lives.