The Medicaid Addiction Treatment Problem in NJ

This article was written by Andrew Walsh and edited by Frank Greenagel. Andrew is a grad student of mine at the Rutgers School of Social Work. This is the second article that he wrote under my guidance this year (his first piece was on addiction hotlines).

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Addiction is a very popular topic in New Jersey. Television commercials focus on individuals who struggled, got help, and live a redeemed life. Radio ads discuss addiction and assure that help is only one phone call away at a variety of 24/7 hotlines. Glossy print ads show pristine facilities, smiling patrons, and families that are enjoying improved days. Governor Christie pushed for legislation that increases access to treatment. He has created new phone lines to provide guidance, expanded the number of in-patient beds, and signed legislation mandating a minimum of 14 days in-patient for addiction. At first glance, New Jersey appears to be poised for significant strides forward.

New Jersey has a population of approximately 9 million residents. Of the 9 million, 1.8 million are Medicaid recipients (half of whom are children). Conservative studies estimate that substance use disorder among NJ Medicaid recipients occurs at a frequency of 16.5%. By these estimates, New Jersey has at least 150,000 Medicaid recipients who suffer from substance misuse disorders.  Even with this conservatively low number, New Jersey has enough Medicaid recipients suffering from addiction to fill Yankee Stadium three times over.

For Medicaid recipients in NJ, options for in-patient detox are limited. At this time there are only seven facilities that accept Medicaid for detox. The largest is Bergen Regional, in Paramus, which has 90 beds for detox with an average waitlist of 5-14 days. St. Clare’s, in Boonton, has 16 beds for detox with a waitlist of approximately 14 days. Christ Hospital is located in Jersey City, has 8 beds for detox with a waitlist of 3-7 days. Hunterdon Medical Center is in Flemington and has 14 beds available for detox. Princeton House, located in Princeton, has a total of 27 beds across two programs for detox.  Steps is a program offered by AtlantiCare in Atlantic county (we could not confirm the number of beds available). Finally, Straight and Narrow, located in Paterson NJ, has 20 beds for detox, though we have been told that they are only for people aged 18 to 21 (the same age limitation exists for New Hope and Maryville).

Between the seven facilities there are a little over 175 beds available for detox. A typical detox stay will last five days. Each bed can provide a 5-day detox for 73 patients per year. If each bed available for detox for Medicaid recipients in NJ was filled every day of the year, approximately 1 out of every 14 Medicaid substance abusers would be able to get in-patient substance abuse detox.  However, while there are 175+ beds available for Medicaid recipients for detox, not all beds are specifically designated for Medicaid detox. The 90 beds at Bergen Regional as well as the 20 beds at Straight and Narrow are for Medicaid and Medicare recipients, as well as indigent population. The 14 beds at Hunterdon Medical Center as well as the 8 beds at Christ Hospital are for substance abuse detox as well as emergent psychiatric patients. The 27 beds available at Princeton House are for individuals with private insurance as well as Medicaid. Taking all of these factors into account, on any given day there may be only 100 beds available for Medicaid detox. Accounting for these changes alters the ratio of bed per patients increases from 1 in 14 to 1 in 20. To sum this up, it is very hard to get a Medicaid detox bed in NJ.

With so few beds, the wait-lists at the seven facilities has grown in length. Due to surges in requests for services, waiting for a bed can sometimes take weeks. A quick look at state alcohol related deaths and overdoses shows the danger associated with waiting. Excessive alcohol consumption and abuse resulted in 1,754 deaths in 2013 in New Jersey. Overdose deaths in New Jersey increased 30% from 1223 in 2012 to 1587 in 2015. The increase in overdose deaths is driven by heroin overdoses and fentanyl deaths, which increased 61% and 890% respectively from 2012 to 2015. Opioid overdoses are shown in the chart below. Additionally, benzodiazepine deaths  are commonly found in deaths associated with opioid overdoses. In 2013 3090 NJ residents suffered alcohol-related deaths and drug overdoses.

 

Year Total Opioid Death Heroin Fentanyl Prescription Painkillers and Benzodiazepines
2012 1223 596 42 585
2013 1336 749 46 541
2014 1304 776 142 386
2015 1587 961 417 209

 

Every day an average of nine New Jersey residents die from drug overdoses and alcohol abuse.  New Jersey has an adult population of 6.5 million. Statistically 52.7% of adults drink alcohol, with 10.39% of those that drink exhibiting substance use disorder. This translates in 355,909 adults abusing alcohol. Stephen Stirling of the Star Ledger wrote that New Jersey has at least 120,000 residents that are addicted to opioids. Between alcohol and opioid use disorder, the total is 475,000 New Jersey residents with a potentially life threatening substance use disorder.  Based on these calculations, 6.5 substance abusing adults per 1000 die per year. Applying this mortality rate to the Medicaid population with substance use disorders, an estimated 975 New Jersey Medicaid recipients with substance use disorders die per year. This means that every day, 2.75 Medicaid recipients die from substance use disorders. Over the course of a week, nearly 20 Medicaid recipients will die from substance use disorders. Based on the limitations of available beds and the length of the wait-lists, it is inevitable that many will die while they are waiting for a bed.

New Jersey has approximately 2400 in-patient beds for psychiatric services. To increase access to treatment for New Jersey residents, the NJ Department of Health called for the creation of 864 new beds for substance abuse in New Jersey. While adding new beds for in-patient substance abuse treatment is positive, only 5% these new beds are specifically earmarked for Medicaid recipients. With the addition of 43 beds for Medicaid recipients, the ratio of patients to bed on a yearly basis drops from 1 in 20 to 1 in 15. While this is an improvement, those beds will do little to decrease the length of wait-lists at the few facilities that actually accept Medicaid.

A common reason cited for the lack of Medicaid beds is the low reimbursement rates from Medicaid for substance abuse. Historically, reimbursement rates were so low that facilities lost money for every Medicaid recipient they took. While this argument may have had some validity in the past, it is not as relevant anymore due to recent changes. In 2016 Governor Christ Christie announced a $127 million allocation to increase reimbursement rates for Medicaid substance abuse treatment. The allocation is built on the premise that increased reimbursement rates will be attractive to service providers. The day rate for Medicaid in-patient detox was doubled from $204 to $408. At the new reimbursement levels, the reimbursement rate is no longer a barrier to entry for service providers. The big concern is that 85% of the allocation comes from a federal block grant (if the Feds cut the grants, then these Medicaid programs are in massive danger).

The lack of Medicaid beds for in-patient substance abuse is the direct result of a law signed 50 years ago that is still in existence today. The Medicaid Institutions for Mental Disease (IMD) exclusion was signed as part of the Social Security Act in 1965. The IMD exclusion prohibits the use of federal Medicaid financing for substance abuse treatment in residential facilities that have more than 16 beds if 50% of the patients had psychiatric disorders. Based on the Diagnostic and Statistical Manual of Mental Disorders (DSM), substance use disorders are classified as mental disorders. Therefore, any rehab facility that only treats substance use disorders must still abide by the IMD exclusion.  The intention of the IMD exclusion was to shift responsibility for the cost of addiction treatment from the federal government to the state governments and to combat institutionalization. The unintended consequence of the IMD exclusion is that the 16-bed cap has created a significant barrier to entry for service providers looking to expand into Medicaid. With the cap so low, coupled with the low profit margin, it is not fiscally in the interest of service providers to expand services.  With the recent expansion of Medicaid through the Affordable Care Act, the number of Medicaid recipients has grown. However, the IMD exclusion continues to maintain its strangulation hold on access to in-patient beds, thereby not allowing service providers to leverage the number of beds.

Possible changes to the IMD exclusion are limited because it is a federal statute. Even if states wanted to expand Medicaid offerings for substance abuse, they would be unable to without significant legislative efforts. There are a number of options to expand Medicaid offerings for addiction treatment. One option is for Congress to fully repeal the IMD exclusion. However, as the IMD exclusion has not been updated since 1988, it is high unlikely that Congress will repeal it when they have not pursued easier path of updating it. Additionally, repealing the IMD exclusion is not fiscally viable and therefore is unlikely. Another option is to increase the bed limit beyond the current cap of 16. While this option is promising, increasing the bed limit without increasing federal funding, resources would be exhausted early in each fiscal year. The most promising reform approach is for the states to file a section 1115 innovation waiver. This waiver allows states to design their own Medicaid programs as long as the programs provide equivalent benefits as those offered in the Federal Medicaid program. There are a number of states that have successfully filed section 1115 innovation waivers. These states include New York, California, Maryland, and Massachusetts. Several other states have filled the section 1115 waiver and are awaiting a ruling.

Filing for a section 1115 innovation waiver is the best option at this time to increase access to substance abuse services for Medicaid recipients. However, pursuing the waiver is not without potentially significant drawbacks. There is cause for concern that the current president will cut funding for Medicaid services. If the waiver is approved and service providers expand their offerings, they will have significant exposure if the funding is cut. Additionally, if the Affordable Care Act is repealed, almost 556,000 New Jersey Residents will lose their Medicaid coverage. With such a drastic cut, the number of beds required will still need to increase but not nearly as much as before. Service Providers that expand their offerings may be caught with increased overhead costs without any increase in revenue due to a much smaller client population to serve.

Substance abuse services need to be dramatically increased for Medicaid recipients in New Jersey. Every week some die while they are waiting for a bed. Even if current offerings were streamlined for maximum efficiency, only 1 in 14 would be able to get a bed for treatment. Increasing the Medicaid reimbursement rates makes providing services financially viable for organizations. Filing for a waiver increases the number of beds accessible. Repealing the Affordable Care Act is a threat to substance abuse treatment for Medicaid recipients. Additionally, funding cuts will threaten any progress made. Overall, treatment services for Medicaid recipients need to improve. Every dollar spent on treatment saves approximately seven dollars that would be spent on jail, court fees, attorney fees, and emergency room services. With the Medicaid population being so large and having such a frequency of substance abuse, extensive changes need to be made immediately.

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Andrew Walsh, MHRM, MSW Intern, is an addiction triage specialist for
Carrier Clinic. He is currently pursuing his MSW and LCADC at Rutgers
University. Prior to returning to Rutgers, he worked in the Gulf of Mexico oilfield as an internal business consultant. Andrew is a lover of books, cuisine, and theater.