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Substance Abuse Treatment in State Children's Health Insurance Programs

by Shelly Gehshan  

Contents

Acknowledgments

Introduction

Adolescent Treatment Needs

Medicaid Coverage of Substance Abuse Treatment

Insurance Source and Benefit Levels

Appendix

Notes

Acknowledgments

This report was produced with the generous support of the Henry J. Kaiser Family Foundation and the David and Lucile Packard Foundation. The author is very grateful for the assistance of the following people in reviewing the report: Nicole Kendall, policy specialist, NCSL; Leann Stelzer, editor, NCSL; Patricia Tennant Sokol, Ph.D., of Sokol Consulting Associates; and Geoffrey Wilson, director, Hill Crest Hall, an adolescent substance abuse treatment facility in Mt. Sterling, Kentucky. Many thanks also go to Gabriela Alcalde and Dan Steinberg, policy specialists at NCSL, who provided research assistance on substance abuse and children's health plans.

Introduction

In the two years since Congress established the State Children's Health Insurance Program (SCHIP) the pace of policy and program development in states has been---and remains--- brisk. All 50 states, the District of Columbia and territories have received approval from the Health Care Financing Administration (HCFA) to implement their programs. An approved plan does not mean the design phase is over, however, because the law gives states substantial flexibility to change their programs. Thirty-seven states have submitted plan amendments, and more can be expected to do so as gaps in their current strategy become clear, political leadership or fiscal considerations change, and program performance information becomes available. One question being asked during implementation is how these new programs will handle the need for alcohol and other drug abuse treatment for adolescents.

Under SCHIP, states can choose to expand Medicaid, establish a new private program or use some combination of the two. As of January, 2000, 24 states had expanded Medicaid, 15 had established a new private program and 17 had pursued a combination approach. The approach a state takes does not determine the substance abuse treatment benefits that will be available.(1)  Table 1 shows the range of substance abuse benefits available to children who are covered by private or combination SCHIP plans. The most common approach is to offer packages that resemble coverage that is available to people who have employer-sponsored insurance (detoxification services, 30 days of inpatient treatment and 30 outpatient visits). One state currently has no substance abuse benefits. Three states offer outpatient treatment and detoxification, but no coverage for inpatient treatment. Several states provide coverage but specifications and limits are not delineated in their state plans.

Adolescent Treatment Needs

Benefit packages that are designed for privately insured adults might not work well for adolescents, because many young people need different treatment options than adults. Adolescents are less likely than adults to need medical detoxification services because their substance abuse may not be severe enough or include multiple drugs.(2) They also may be more likely than adults to have co-occurring mental health problems, particularly depression and problems related to physical and sexual abuse. There is a much greater need for counseling of a youth's family members, parents and caregivers than there is for adults.

In addition, the location and timing of care for adolescents is different from that for adults. Because adolescents are more likely to need treatment that allows them to live at home with their families or care givers, they may respond well to programs that are scheduled after school or during the summer. Adolescents are less likely to plan ahead than adults, which means that treatment needs to be available when they are ready. Plans that require families to complete extensive paperwork and precertification processes in order for an adolescent to receive treatment may find that the opportunity for treatment has been lost.

Treatment for adolescents also is distinct from that of adults in regard to the extent and nature of family involvement. In the absence of complicating factors, most treatment programs build substantial family involvement into a child's treatment plan. In some cases, however, family participation may not be possible or practical. The parents of some adolescents who use drugs or alcohol are themselves chemically dependent, abusive or estranged from their children. Even in supportive, intact families, children may be deterred from seeking treatment because they fear informing their parents about their drug use. For these reasons, many adolescents may need assurances of confidentiality from treatment providers. Federal law protects the confidentiality of both adults and children who receive treatment from any facility that receives federal funds. In some states, managed care providers are required to build in mechanisms to ensure confidentiality for children who seek treatment and other services. For example, managed care organizations can ensure that referral or treatment invoices and bills will not be sent to the child's home when a service has been delivered. Although in most families parents are the primary facilitators of care for children, federal law protects the confidentiality of adolescents who seek care independently of their parents.

 Adolescents and Substance Abuse

Although drug use among adolescents has decreased during the last two decades, the National Institute on Drug Abuse (NIDA) has recorded an increase in adolescent drug use in recent years. Over half (54 percent) of high school seniors graduating in 1997 reported use of an illicit drug at some point in their lives, and 42 percent reported using an illicit drug in the past year. Adolescents who are not enrolled in high school are high risk populations, and NIDA's estimates might have been higher had they included this group. The Substance Abuse and Mental Health Services Administration (SAMHSA) reports similar long-term trends. Its surveys reveal that drug use among children ages 12 to 17 decreased between 1979 and 1992, but the trend since 1992 has shown an increase. In 1998, approximately 10 percent of children in this age group report illicit drug use in the past month. In the same age group-12 to 17-use of alcohol during the month equaled 19 percent in 1998. This percentage of alcohol use, illegal for this age group, has not changed appreciably in the last 10 years.

Almost all teenagers experiment with alcohol or other drugs, and comparatively few become addicted or dependent. The negative consequences of adolescent drug use, however, are well-documented. The Centers for Disease Control reports that 2.5 million adolescents (about 18 percent of drivers between the ages of 16 and 20) drive under the influence of alcohol, and that approximately 15 percent of all adolescent deaths are due to drinking and driving. Substance abuse among adolescents also is related to early sexual activity and its adverse consequences, including incidents of unwanted pregnancy, sexually transmitted diseases and HIV infection. Teens who become chronic users often develop psychological or social problems, and studies of males entering the juvenile justice system confirm the link between substance use and crime.

Medicaid Coverage of Substance Abuse Treatment

 A state's choice of whether or not to expand Medicaid with its SCHIP funds has broad implications for the benefits children who are in need of substance abuse treatment will receive. States that have expanded Medicaid will have one system. All children, whether newly eligible or already in the program prior to the enactment of SCHIP, will receive the same benefits from the same providers. States that have chosen a private or combination SCHIP program will have two systems. Most of these will have two sets of benefits and different delivery systems, although some states have tried to design their programs to be "seamless." States such as Kansas and North Carolina have tried to plan their programs as Medicaid "look-alikes" so that recipients who have changes in income will not notice changes in copayments, benefits or providers, even though they actually may change from Medicaid to the private program, or vice versa.

What states provide in the way of substance abuse treatment through Medicaid has never been entirely clear because inpatient care and physician services are required services that are not reported according to diagnosis. At a minimum, states must provide inpatient detoxification and outpatient services (that are billed as physician services). Also, states are barred from reimbursing for any services delivered by a state institution with more than 16 beds that treats "mental diseases," such as mental retardation or chronic mental illness. For the most part, this has prevented states from providing residential substance abuse treatment for Medicaid patients.(3)

Children enrolled in Medicaid may receive very different substance abuse benefits than adults. Under early, periodic screening, diagnosis and treatment (EPSDT), which is a federally mandated benefit under Medicaid, states must provide any service children need, whether or not it is part of a state Medicaid plan. Therefore even if a state provides only the minimum in substance abuse treatment for other eligibility groups, if a physician screening determines that a child needs additional treatment, Medicaid, by federal mandate, must provide it.

Insurance Source and Benefit Levels

Equity is an important issue that arises for children and adolescents who are in need of substance abuse services in states that have private or combination plans. Although families may be very similar in terms of health problems, social supports, involvement in the workforce and demographics, those below Medicaid income levels will receive Medicaid benefits while those above may receive different and generally lesser benefits. Three examples demonstrate the range of experiences faced by children insured by private SCHIP programs in different parts of the country.

In all states, by comparison, a child covered by traditional Medicaid is eligible for a full range of substance abuse treatment services, either through EPSDT or through state plan benefits delivered by a fee-for-service or a managed care mechanism. Some states have handled the equity issue by using the Medicaid benefit package for the new private program. New Jersey will be providing the same substance abuse benefits in one of its private programs, KidCare A, as the benefits that are available in Medicaid.

Although substance abuse benefits for children may be greater under Medicaid than through private or combination programs, Medicaid is no panacea. Medicaid programs vary considerably in their ease of enrollment, the extent of their conversion to managed care, the richness of their benefits, and the breadth and depth of their provider networks. There is also a great difference between the existence of benefits and whether beneficiaries receive them. For decades, there have been problems with Medicaid provider participation, distribution and reimbursement rates. Although the recent shift to managed care in Medicaid programs may have eased provider problems somewhat, it also means that recipients must navigate complex new systems in order to receive care. The transition to managed care also means that recipients in one part of a state may receive different benefits from different providers than people in other parts of a state.

Another important issue arises with all SCHIP plans, be they Medicaid, private or combination programs. Most states are contracting with managed care organizations (MCOs) to deliver both physical health and substance abuse and mental health services. The quality of these programs may rest on the details spelled out in the contracts between states and MCOs. These providers may have little or no experience with low-income, culturally diverse populations and may not be appropriately staffed to serve children and adolescents. Many MCOs also have barriers to treatment in the form of advance notification requirements and practices that channel patients into the cheapest form of treatment. For example, many MCOs require patients- regardless of diagnosis-to fail at a lower level of treatment before receiving more intensive or residential services. This can waste limited benefits on forms of treatment that are ill-suited to a patient's condition, and can cause an economic burden for a family once benefits are exhausted.

MCOs also need to have appropriate screening and referral systems and linkages in order to detect substance abuse problems among adolescents and ensure they receive services. Most adults treated for chemical dependence enter treatment voluntarily or are referred through the criminal justice system. Although juvenile courts send many children to treatment, they also are referred by parents or guardians; community organizations such as social service agencies or runaway shelters; health facilities such as hospitals, emergency rooms or juvenile mental health facilities; and school systems.

Therefore, it is important that MCOs require pediatricians, during office visits, to screen adolescents to detect substance abuse problems and ensure that they get the services they need. Also, states may wish to require MCO contractors to provide linkages with traditional community-based treatment services so that families have somewhere to turn if their child needs more treatment than their plan provides.

Finally, because SCHIP programs are so new, not much is known about how much substance abuse treatment is being provided or how well the benefit structures states have chosen meet adolescents' needs. Use of alcohol and illicit drugs is very common among adolescents. Although most of those who use alcohol and other drugs will not need treatment, those who do will need programs that are designed to meet their needs. Providers and policymakers will want to monitor the implementation of children's health programs in their states to see if improvements are needed in substance abuse treatment benefits and service delivery. If legislators and program administrators are given information about how SCHIP programs are working with respect to substance abuse treatment provision for adolescents, they can work to improve these programs over time.

Appendix

NOTES

1. For a complete description of benefits available in each state, please consult the chart posted on NCSL's Web site: www.stateserv.hpts.org.

2. Medicaid detoxification occurs in a hospital and is needed for serious withdrawal, particularly from barbiturates and other drugs, most particularly alcohol. "Social" detoxification is a set of non-medical services offered by substance abuse programs at the beginning of a patient's stay. These generally are not reimbursed by insurers.

3. For more information, see Patrick Johnson, Substance Abuse Treatment Coverage in State Medicaid Programs, National Conference of State Legislatures, Washington, DC, March, 1999.