Stephanie Strong founded Boulder Care in 2017 with an ambitious goal: build a profitable substance use disorder (SUD) treatment business that would also accept Medicaid patients, many caught up in the opioid epidemic.
Strong’s timing proved auspicious. Over a year later, a new federal law came into effect requiring states to cover federally approved opioid medications under Medicaid.
Propelled by additional economic and legal shifts, including the ability to now prescribe opioid medication buprenorphine over a telehealth session, Portland, Oregon-based Boulder Care in 2022 raised $35 million in its second venture capital fundraising round.
In just a few years, Strong said, Medicaid coverage for SUD has improved dramatically. It is still not nearly enough, however.
“Medicaid will cover a visit with a credentialed clinician, but it will not cover all the other ancillary support,” Strong told Addiction Treatment Business, arguing for the need for Medicaid to cover, for example, a dedicated case manager.
The Journal of the American Medical Association published in August a survey of state fee-for-service Medicaid programs, and what those programs do and do not provide when it comes to opioid use disorder (OUD) treatment and medication. The study’s findings underscore the optimism yet frustration of providers like Boulder Care.
The good news for providers: Medicaid coverage for OUD medication is now almost 100% and that recovery support service reimbursements also are on the rise. The bad news: “Critical gaps in coverage remain,” the survey concluded in a related study. Namely, the study explained, gaps exist with the residential and intensive treatment programs that many providers say are needed for OUD.
The study was published at a time when opiate and other overdoses in the U.S. continue to escalate, and as Medicaid’s fee-for-service program remains the country’s largest payer for SUD treatment and medication.
Covering a crisis
Authored by Angela Shoulders, an economics doctoral student at the University of South Carolina, along with colleagues at South Carolina, the study points to the ever-evolving nature of Medicaid itself. After attempting to collect surveys from every state in 2014 and 2017, the study authors took data from just 38 states and the District of Columbia in 2021, excluding the 12 states that have switched over to exclusively managed care Medicaid plans.
Of the 38 states plus District of Columbia remaining, 12 states exclusively employ the fee-for-service model while the other 26 have a mix of managed care and fee-for-service.
Regardless of Medicaid model, every state Medicaid program now must reimburse the three FDA-approved medications for OUD, as outlined in the Support Act of 2018.
The drugs are buprenorphine, methadone and naltrexone. In 2017, a handful of states – 12% for oral naltrexone, 6% for injectable naltrexone, 22% for methadone – were still not reimbursing some OUD medication prescriptions.
By 2021, 100% of states surveyed covered buprenorphine and naltrexone, though one state surveyed acknowledged still not offering methadone, citing a lack of available providers. Shoulders declined to say the state still not providing methadone, beyond that it was a “rural Midwestern state.”
In an interview with ATB following the study’s publication, Shoulders noted that these drugs, especially methadone, remain dogged by social stigma. Also, there are a lack of people authorized to prescribe the drugs and a shortage of the drugs themselves.
“Demand exceeds supply,” Shoulders said.
One significant coverage increase is in recovery support services – for example, a weekly telehealth visit – which climbed from being covered by 51% of states in 2014 to 87% in 2021. The study notes that recovery support services cost less to finance than “other forms of care.”
Those other forms of care include 33% of state fee-for-service Medicaid programs surveyed not covering long-term residential treatment, and 13% not covering any kind of residential treatment. Also, 10% of states did not cover intensive outpatient, which can include meeting with multiple care providers, sometimes on a daily basis.
“A lot of patients need something more concrete than a once-a-week support group meeting,” Shoulders said. “And not having access to that is a tremendous problem. It’s the difference between life and death.”
In other words, the increase in fee-for-service Medicaid coverage, though significant, has not kept pace with the increase in OUD.
The U.S. Centers for Disease Control and Prevention estimates that in 2014 there were 47,000 overdose deaths in the U.S. In 2021, there were a then-record 106,000 fatal overdoses, followed by 107,000 overdose deaths in 2022.
Managing opioid dependence
Though the study notes that 38% of all U.S. patients being treated for OUD are covered by Medicaid, an increasing number are under a managed care plan, usually administered by states in contract with a private provider.
Cooper Zelnick, chief revenue officer of Groups Recover Together, said that the opioid addiction treatment company avoids taking on fee-for-service Medicaid patients in favor of negotiating partnerships with Medicaid managed care providers.
Zelnick said that the managed care services are, in many states, presently the functional equivalent of fee-for-service options. However, he believes that managed care programs show more promise in retaining patients who need months of ongoing treatment, as opposed to discrete prescription refills or weekly telehealth check-ins.
“By and large, a fee-for-service model is very inconsistent with treating opioid use disorder,” said Zelnick, whose Burlington, Massachusetts-based company operates in 16 states.
At Boulder Care, Strong said that about 80% of their patients are covered by Medicaid. Like Zelnick, Strong’s hope for the future is a move toward striking deals with Medicaid managed care providers to base reimbursement more on an outcome than a cost for each treatment or medication.
Despite a current lack of reimbursement – or low reimbursements – for elements of OUD coverage, Strong sees a path toward negotiating more “value-based” contracts with Medicaid providers, plans that are focused on holistic care.
“I am optimistic and bullish despite the challenges,” Strong said.
