Why Financial Incentives Could Be the Next Big Thing in Addiction Treatment

The regulatory environment may be shifting to allow contingency management — a well-researched but underutilized care tactic — to become a vital tool in improving care and performance outcomes in addiction treatment.

If that happens, contingency management could also turn into a vital tool to address the rising number of stimulant-related overdoses and deaths in the U.S., industry insiders believe. In some cases, it is the only validated tool for providers to use.

And on top of all that, the practice additionally fits into addiction treatment providers’ and payers’ pushes toward greater use of technology and data, particularly when it comes to value-based care and addressing care inequity.

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Contingency management, despite its jargony veneer, is a simple concept.

Generally, it calls for immediate rewards for positive behavior. It circumvents a phenomenon in addiction treatment called delay discounting, when people perceive rewards as less valuable the longer it takes to receive them. Contingency management often takes the form of small cash or cash-equivalent rewards in exchange for some positive outcome — gift cards for clean drug tests, for example. 

Contingency management is based on principles of operant conditioning, which, in broad terms, uses reinforcements or punishments to modify behavior.

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The practice recently received major validation from the federal government.

At the start of 2022, California became the first state to cover contingency management through Medicaid following federal clearance for a special waiver. Contingency management is also a part of the recently announced California Medicaid program for recently incarcerated people, also a first-of-its-kind Medicaid initiative. The Centers for Medicare & Medicaid Services (CMS) announced the program received clearance on Jan. 26.

As part of the Medicaid program for those recently released from incarceration, California will pay $599 in gift cards over the course of 24 weeks — starting at $10 and increasing to up to $26.50 — for negative drug tests for stimulant use.

Contingency management has decades of research supporting its overall efficacy and long-term impact. One study found that patients who use contingency management in their recovery are 22% more likely to be abstinent at 24 weeks after treatment compared to those who don’t, regardless of demographics or the drug used. 

That aspect is critical, as stimulant use has increased, complicating treatment for substance use disorder (SUD). In the 10 years ending in 2020, addiction treatment admissions across all treatment types saw stimulants as a primary and secondary substance used at admission increase by about 140%, according to federal data.

Methamphetamine and cocaine are now involved in 68% of opioid-related overdose deaths. And deaths from these drugs alone have surpassed prescription opioids or heroin over the last 10 years, according to an analysis by the NIHCM Foundation.

Stimulants are especially hard to address in addiction treatment.

“No effective pharmacotherapies are available that reduce stimulant use, and the available psychosocial interventions (except for contingency management) had a weak overall effect,” a global review of stimulant addiction states.

Despite the potential and positive signs, there are plenty of hurdles for widespread adoption of contingency management. Among them: reimbursement challenges and the big-picture approach that smaller or less sophisticated providers often struggle to embrace. 

Contingency management in context

Contingency management on its own is likely a failing proposition for addiction treatment providers. That’s why Greenville, South Carolina-based Crossroads Treatment Centers includes the practice in its equity-focused care model.

“We work really hard to solve those issues so that [our patients] can actually get to a health care appointment and get their lives back,” Crossroads Treatment Centers CEO and founder Rupert McCormac told Behavioral Health Business. 

The company has partnered with the behavioral health tech company Pear Therapeutics (Nasdaq: PEAR) to dispense its contingency management program via Pear’s FDA-approved digital therapeutics reSET or reSET-O. Following an assessment from a Crossroads clinician, patients can be prescribed the use of the program. 

In short, patients can get gift cards, including for Starbucks, as they successfully complete cognitive behavioral therapy (CBT) modules in the app. Crossroads Treatment Centers offers contingency management in 93 offices in five states, and it first launched a pilot program in 2019.

Crossroads Treatment Centers further enables patient recovery by supplementing treatment with access to contingency regardless of their ability to own a smart device. Crossroads partners with a major telecommunications company to provide cell phones and services plans, helping patients overcome the digital divide.

Together, providing cell phones and contingency management presents a compelling opportunity.

The use of contingency management increases long-term retention by 14%. Long-term retention is a common success metric in addiction treatment. Providing cell phones also enable telehealth, overcoming transportation challenges that many in addiction treatment face, McCormac said.

Retention is a challenge in addiction treatment. Federal data from 2020 suggests that 24.5% of people don’t complete treatment, regardless of type, because they dropped out. The care type with the largest dropout rate is outpatient medication-assisted treatment (MAT) for opioid use disorder (OUD) at 33.9%. MAT for OUD also has the lowest completion rate at 18.1%. Detoxification has the highest completion rate at 61.6%.

In specific addiction treatment populations

Crossroads Treatment Centers offers telehealth and in-person services, allowing patients multiple touch points with providers. Further, the company’s patient population primarily has Medicaid coverage. 

The dynamics shift somewhat in other settings with different payer mixes and with different uses of technology.

Peter Loeb, co-founder and CEO of the Petaluma, California-based virtual addiction treatment provider LionRock Recovery, applied his management experience in the video game industry to a built-in-house mobile app that offered contingency management and care tracking nine years ago.

“I was very excited about it. We spent a lot of time on it and, unfortunately, what we discovered was that our clients didn’t care,” Loeb said.

The program allows users to accumulate in-app points for completing assignments or attending virtual sessions redeemable for Starbucks gift cards. However, LionRock’s patients demonstrated they were already motivated to engage with care and did not require further incentive.

“They were already going to go; our clients already show up to 80% of their groups and individual sessions,” Loeb said, adding that 5% are no-shows while the remaining 15% of visits get rescheduled.

LionRock’s average retention rate is about four months, increasing over the years. 

Since trying the program, Loeb has theorized that the contingency management program didn’t work because of the already high engagement rates. Over 80% of LionRock’s patients were employed, and most studies of contingency management programs are for disadvantaged populations with a stimulant use disorder. It simply wasn’t a fit for LionRock’s patients.

“I still think it’s a great idea,” Loeb said. “The question for me is where in the continuum does a patient decide to show up because they are committed to making a change in their life, versus, ‘I need the rewards to keep me going,’ and there’s nothing wrong with that.” 

Loeb pointed to the cultural accession of 12-step programs such as Alcoholics Anonymous and the use of their chip system to incentivize engagement and recovery.

The tricky questions

The health care sector constantly fears that innovative engagements will lead to allegations of impropriety. Actions meant to tamp down health care fraud have increased in recent years, with qui tam realtors recovering $488 million, a recent high, and the U.S. Department of Justice initiating 269 civil lawsuits against providers in 2022, a 40% increase.

That’s according to a recent report by the law firm Bass, Berry & Sims PLC. 

Kaiser Health News reported in November that Montana outpatient addiction clinic Oxytocin has been subjected to allegations of Medicaid fraud despite running a contingency management program in coordination with county officials.

Despite the challenges, the federal regulatory pathway appears clear for contingency management in addiction treatment.

In February 2022, a chief federal health care watchdog — the Office of the Inspector General for the U.S. Health and Human Services Department — released an advisory opinion that stated contingency management programs “presents a minimal risk of fraud and abuse under the Federal anti-kickback statute.” The watchdog noted that it would not sanction these programs. 

However, the opinion highlighted the potential gray area that providers might stray into if a contingency program is not strictly administered in keeping with evidence-based principles. They may run afoul of Beneficiary Inducements Civil Monetary Penalty laws and the federal Anti-Kickback Statute.

The Biden administration further signaled a friendly attitude toward contingency management by highlighting its potential in the 2022 drug control plan

Government scrutiny is one barrier. So, too, is payer interest.

McCormac said that contingency management is not often covered by health plans, leaving its expenses solely on the shoulders of addiction treatment providers. He emphasized that reimbursement is “the one important missing piece.”

“This is a prevailing and repetitive theme that has materially slowed our fight against the country’s devastating opioid overdose epidemic that I’ve been fighting for over 17 years,” McCormac said. “There has been a slow adoption, but there’s a major reason for that, and that is reimbursement and the lack thereof.”

It’s hard to pin down the utilization of contingency management.

About 40% of the programs listed in the National Directory of Drug and Alcohol Abuse Treatment Facilities for 2022, a directory maintained by the U.S. Substance Abuse and Mental Health Services Administration (SAMHSA), claim to offer contingency management incentives as part of their care.

However, the directory only lists specific facilities that are both engaged with state substance abuse agencies and respond to other SAMHSA surveys. 

Addressing foundational issues in addiction treatment

At the core, legal and reimbursement hangups with contingency management center on money.

The New York City-based digital peer support and care coordination platform You Are Accountable LLC takes a different approach: It focuses on using social reinforcement. 

Along with avoiding the challenges of using money, leveraging socially reinforced contingency management in the context of care coordination and peer support addresses foundational social challenges of addiction recovery, Matthew Serel, CEO and co-founder of You Are Accountable, told BHB. 

The company’s main service is toxicology monitoring. Others include peer recovery coaching, care coordination and contingency management. In the latter service, patients give access to their You Are Accountable port to a family member or other contact. That person helps coordinate care, set goals and otherwise remains involved with the patient’s care.

Serel previously built and sold an applied behavior analysis practice management company to Therapy Brands and is also in recovery.

“Monetary reinforcers are traditionally used because everybody can agree that they’re valuable. But there are challenges in implementing monetary reinforcement,” Serel said. “Similarly, everybody equally ascribes value to social reinforcement. … When somebody’s hitting their goals and staying sober, their family or clinicians get a message sent to them saying that the person is doing a great job and they then can respond to that and send back positive reinforcement.”

The approach is also meant to help foster trust between those seeking recovery and those around them. Despite the progress a patient may make, it may not translate to positive developments in their social life. Further, there aren’t clear opportunities to proactively demonstrate the patient’s work in improving their relationships with loved ones.

“By reinforcing positive messages around my or somebody else’s recovery, we can help rebuild that trust and rebuild the family system,” Serel said, adding this is especially true in the early stages of recovery.

In 2022, the company completed a Phase 1 acceptability trial with the University of Florida’s Behavioral Health and Technology Research Clinic that found stakeholder satisfaction with the project. Phase 2 trials are pending, Serel said.

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