Urban Wire Three ways states can boost the impact of new federal opioid legislation on Medicaid’s health homes program
Eva H. Allen, Lisa Clemans-Cope
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The opioid epidemic continues to have adverse effects on families and communities. An estimated 49,031 overdose deaths involved an opioid in 2017. Experts have called for a major expansion of treatment availability and investments for opioid use disorder (OUD).

Federal opioid legislation—the Substance Use-Disorder Prevention That Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act, which was passed earlier this month and is awaiting the president’s signature—includes provisions aimed at expanding access to treatment, including residential treatment, health homes for Medicaid enrollees, and Medicare coverage to reimbursement for methadone treatment at opioid treatment programs.

Despite these new investments, the legislation falls short of a major treatment expansion, with expenditures on the treatment provisions totaling $2.6 billion over 10 years, rather than the $190 billion over 10 years that Harvard University’s Richard Frank has estimated is needed to meaningfully help families and communities dealing with the epidemic.

One of the largest expansions of federal spending in the SUPPORT bill is for Medicaid health home programs designed for people with substance use disorders (SUDs), including OUD, to improve quality of care and improve outcomes for patients with OUD, their families, and communities. It builds on the Medicaid Health Home State Plan Option, authorized under the Affordable Care Act, which allows states to establish health homes to coordinate care for high-need, high-cost Medicaid beneficiaries with chronic conditions, including SUD. This delivery model integrates physical, mental, and behavioral health; substance use treatment and recovery care; and supports and services that address social determinants of health (SDOH). To date, 4 states have implemented Medicaid health homes for people with SUD, and another 18 states states and the District of Columbia have implemented them for other people.

Under the new law, the federal government would pay 90 percent of the costs of health home services (i.e., comprehensive care management, care coordination, health promotion, transitional care services, individual and family support, and referral to community and social support services) provided to SUD health home enrollees for the first 10 quarters of the program—up from 8 quarters of enhanced federal support for SUD health homes now.

Even the 18 states and DC that implemented Medicaid health homes but not SUD health homes are eligible for this enhanced federal funding—a valuable opportunity because these states already navigated the federal requirements for health homes. The Congressional Budget Office estimates that this provision will provide $509 million in new federal funding to states between 2019 and 2028 for SUD health homes.

A recent study by the University of Vermont of the Medicaid SUD health home model (called the Hub and Spoke model in Vermont) found positive impacts for participants, including significant reductions in opioid, alcohol, and other illicit drug use; reductions in emergency department visits; and fewer police stops, arrests, and reported days of illegal activity.

In our study of health homes in the first three states to implement them for OUD patients, providers reported substantial improvements in patient care. We found that placing experienced SUD treatment providers at the center of care leveraged relationships and trust between the patient and provider.

But we also found that opioid health home providers faced considerable challenges in implementing the model and making it operational, from limited support to upgrade clinic staffing and infrastructure capacity, to complex payment systems, to inadequate community resources to address SDOH needs.

Based on the evidence available, we suggest the following ideas for states interested in implementing health homes for people with OUD that could help them overcome these challenges.

1. Offer up-front incentives to health home providers for infrastructure investments.  

Our study of three states that implemented health homes for people with OUD found participating providers were discouraged by the lack of start-up funding to implement the model, as federal payments are limited to the provision of health home services.

States could use the Substance Abuse and Mental Health Services Administration’s State Targeted Response to the Opioid Crisis grant funds, reauthorized in the SUPPORT bill, to offer providers up-front financial assistance to ensure providers can ramp up their capacity and infrastructure to meet the program requirements and goals.

And states can obtain technical assistance and up to $500,000 in federal funding to plan a health home program, which can pay for outreach initiatives to solicit provider input and for the development of reporting systems and infrastructure needed to implement the program.

2. Test and evaluate alternative payment models (APMs) developed for OUD treatment providers.

The Centers for Medicare and Medicaid Services encourages states to develop alternative payment models for Medicaid health homes, but many states use some form of capitated per member per month payment model that is not tied to care quality, performance, or outcome measures.

APMs designed for OUD treatment providers in Medicaid could lead to improved care quality and treatment expansion by better aligning incentives for risk-bearing entities (e.g., managed care organizations or care coordination organizations) and providers. New APMs that state Medicaid agencies could explore when developing their SUD health home programs include the Patient-Centered Opioid Addiction Treatment Payment model and the Addiction Recovery Medical Home model.

These and other new payment models could address the widespread shortage of primary care providers that partner with health home providers, sometimes called “spokes,” to offer buprenorphine maintenance treatment and care in a regular office-based outpatient setting for patients who are stabilized and require less intense services.

To give providers incentives to deliver health home services to people with OUD, the new payment models would be tied to structural measures (e.g., use of prescription drug monitoring programs and electronic health records), process measures (e.g., screening using a validated screening tool for substance use disorders and face-to-face visits between the patient and the provider using a shared decisionmaking process), and performance measures (e.g., initiation of medication-assisted treatment), in addition to patient outcome measures (e.g., risk-adjusted average number of opioid-related emergency department visits per patient).

3. Promote integration of clinical and nonclinical services to address social determinants of health.

The extent to which value-based payment models are successful may depend on addressing patients’ nonclinical needs, and health homes reimburse care coordination to help patients access services related to SDOH. But providers in our study reported that it was difficult to figure out what resources were available in the community and that widespread shortages of services and supports, particularly housing and transportation, limited access.

To boost access to nonclinical supports and services, states can foster health system integration with social services by developing cross-sector linkages between state and local agencies and community-based organizations.

Other integration strategies include seeking financial alignment between Medicaid and social services (e.g., braided state and federal financing), promoting cross-sector data and information sharing, and encouraging integration by incorporating social determinants of health into Medicaid payment and quality measurement strategies. To increase the availability of critical community resources, such as affordable housing or public transportation, states can also explore strategies for financing infrastructure investments.

The evidence shows that expanding Medicaid health homes for people with opioid use disorders could make significant progress in addressing the opioid epidemic. The new legislation provides additional funding for Medicaid health homes, which could be combined with other available federal assistance and funding to improve access to effective treatment for OUD patients.

States that want to maximize the legislation’s treatment expansions and positive impacts can benefit from the experiences of states that have implemented Medicaid health homes for OUD patients and can design programs that properly support providers in caring for this highly complex population. 


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Research Areas Health and health care
Tags Federal health care reform Medicaid and the Children’s Health Insurance Program  State health care reform Social determinants of health Substance use Opioid crisis
Policy Centers Health Policy Center