Access to substance abuse treatment for Medicaid clients

October 23, 2000

Access to substance abuse treatment for Medicaid clients improves with oregon model for financing treatment under managed care

Researchers at the Oregon Health Sciences University found that implementation of a capitated substance abuse benefit appeared to increase access to related services for state Medicaid clients in Oregon. This single benefit broadened the array of covered substance abuse treatment services formerly offered Medicaid patients, and improved integration of health care services among providers. The research was funded by the National Institute on Drug Abuse (NIDA) and the National Institute on Alcohol Abuse and Alcoholism, both of the National Institutes of Health, as well as the Substance Abuse and Mental Health Services Administration. The study, conducted by an Oregon Health Sciences University research team led by Dr. Bentson H. McFarland, will be published in the October 25 issue of the Journal of the American Medical Association.

"The Oregon approach markedly altered the organization and financing of drug addiction treatment services," says Dr. Alan I. Leshner, director of NIDA. "As a result of appropriate organizational and functional arrangements, access to services was improved for many more Medicaid clients in Oregon." Access rates for five of the seven Oregon health plans studied showed dramatic increases in access between 1994 and 1997, following capitation. Compared to a 4.5 percent access rate observed in Oregon in 1994 under the fee-for-service financing approach, 50 to 70 percent more Medicaid clients accessed treatment under the capitated benefit. Statewide, the access rate nearly doubled during this time period. " In the early 1990s, as Medicaid programs began to be converted from fee-for-service to managed care, Oregon officials moved to expand Medicaid coverage while controlling rising health care costs. In 1994, the state expanded eligibility and integration of substance abuse services. In 1995, a capitated substance abuse benefit was added, to improve the integration of substance abuse treatment with physical health care. Oregon also increased capitation payments to encourage primary care providers to screen their patients for substance abuse disorders. The research team looked at the impact of managed care financing on access to substance abuse services for state Medicaid clients. Specifically, these access rates applied to treatment clients aged 12-64, served by various managed care systems, from 1994 to 1998. The study period began in 1994 to reflect the expansions made to Medicaid eligibility, prior to capitation of substance abuse services; and ran through 1998, to reflect the added impact of the implementation and maturation of the substance abuse benefit.

Among the various managed care plans, the one with the highest overall access rate in 1997 conducted extensive outreach among potential clients; routinely screened for substance abuse; and maintained strong ties with social service providers in the metropolitan area it served. The top three plans with the highest access rates all reimbursed providers using a modified fee-for-service system. Even after adjusting for the influence of client characteristics, this provider payment method was a significant predictor of access to treatment.

The Oregon experience may serve as a useful model for other states looking at ways to improve access to substance abuse treatment services for Medicaid clients.
The National Institute on Drug Abuse is a component of the National Institutes of Health, U.S. Department of Health and Human Services. NIDA supports more than 85 percent of the world's research on the health aspects of drug abuse and addiction. The Institute carries out a large variety of programs to ensure the rapid dissemination of research information and its implementation in policy and practice. Fact sheets on the health effects of drugs of abuse and other topics can be ordered free of charge in English and Spanish by calling NIDA Infofax at 1-888-NIH-NIDA (644-6432) or 1-888-TTY-NIDA (889-6432) for the deaf. These fact sheets and further information on NIDA research and other activities can be found on the NIDA home page at

NIH/National Institute on Drug Abuse

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