The NCSL Blog


By Emily Blanford

State policymakers continue to explore innovations in Medicaid programs to address costs and outcomes.

Drugs with moneyThis blog, the second in a two-part series, discusses Medicaid state policies related to substance use disorder and mental health innovations; payment and delivery system reforms; and long term services and supports.

Part one of the series highlighted state actions related to Medicaid expansion and community engagement and work requirements. 

Substance use disorder and mental health innovations: Mental health and substance use treatment have long been an area of focus for improvement in state Medicaid programs. One way states are trying to improve outcomes and reduce costs is through the use of 1115 demonstration waivers, rather than using more “traditional” Medicaid coverage options. These 1115 waivers allow states to design services in a way that meets their unique needs. Currently, 27 states have an approved 1115 waiver to provide mental health and/or substance use treatment services. 

In 2018, several states expanded their mental health and substance use treatment options.

For example, Illinois enacted the Early Mental Health and Addictions Treatment Act, which provides for a pilot program for youth. Illinois also enacted legislation requiring Medicaid reimbursement for telehealth services provided by substance abuse centers through HB 2907. Missouri’s legislature (HB 2280) extended Medicaid eligibility and substance use treatment for women up to one year after giving birth.

Payment and delivery system reforms: To reduce costs and create efficiencies through better coordination of services, states have implemented or are considering payment and delivery system reforms. Key models states are using for these reforms, as defined by the Kaiser Family Foundation, include patient-centered medical homes, ACA health homes options, accountable care organizations, episode of care initiatives and Delivery System Reform Incentive Payment (DSRIP) programs.

According to the Kaiser Family Foundation, 43 states had at least one delivery system or payment reform model in place in fiscal year 2018 and 19 states indicated they will be looking to expand initiatives. For example, in the general budget bill for fiscal year 2019, Massachusetts included provisions to develop models within Medicaid including the use of patient-centered medical homes and accountable care organizations. 

Long term services and supports: States also continue to modify and expand access to long term services and supports, particularly community-based supports to avoid more costly institutional services. Many states are struggling with a lack of an adequate workforce to provide long term services and supports. Delaware enacted HB 200, which assured home care workers receive the same level of reimbursement whether they are working through a managed care organization or on a fee-for-service basis. Washington enacted SB 6199 which allows consumers to direct their own services to help improve access to community-based services.

The Money Follows the Person (MFP) demonstration grant provided states with an opportunity to reduce costs for services by creating the infrastructure to transition individuals out of institutional settings to community-based settings. With MFP demonstration funding expiring, states are looking to extend the program or provide some of the supports available through the MFP program. For example, Colorado enacted HB 18-1326, which extends services similar to those established under the MFP demonstration more permanently. Connecticut expanded the number of individuals to be served through their MFP program by repealing an enrollment limitation in HB 5253. With many states running out of funding, federal lawmakers passed a three-month extension of MFP funding in 2019, making this an area states will continue to watch for funding key long term services and supports.

We anticipate that these issues will remain at the forefront of state legislatures in 2019, as policymakers continue to adjust existing policies and develop innovative new solutions. Keep track of developments in state Medicaid programs and other health reforms through NCSL’s Health Innovations State Law Database.

Emily Blanford is a program principal in NCSL’s Health Program.

Email Emily

Actions: E-mail | Permalink |

Subscribe to the NCSL Blog

Click on the RSS feed at left to add the NCSL Blog to your favorite RSS reader. 

About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.