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L.A. County Officials Predict Substance Misuse Care Will Expand Under ACA

Like other major metropolitan areas, Los Angeles County pays a steep economic and social price for untreated substance abuse.

The annual estimated economic cost to the county for alcohol use alone is nearly $11 billion, according to a 2008 report. At the same time, overdoses from illicit drugs are the county’s fourth leading cause of premature death and the 17th leading cause of death overall, according to the L.A. County Department of Public Health. Illicit drug offenses account for the county’s highest percentage of felony arrests.

Some experts in Los Angeles County, which is in the middle of a five-year strategic plan to deal with substance abuse, predict that substance abuse treatment will be the region’s single biggest increase service demands under the Affordable Care Act.

The public health department’s Substance Abuse Prevention and Control division has been preparing for changes since the ACA’s inception. The division expects a significant proportion of the region’s population with substance abuse problems to be eligible for subsidized coverage, said Wayne Sugita, SAPC’s deputy director who also oversees its ACA readiness initiative.

“For medically indigent people, limited eligibility for Medi-Cal was a big barrier, with not enough funds to serve everyone,” said Sugita. “The challenge is to get people enrolled in Medi-Cal so they’re eligible Jan. 1.”

California is one of a few states that already includes substance abuse services in its Medicaid program. More opportunity exists now to help those who need it, experts say, thanks to the ACA’s Medi-Cal expansion and enhanced benefits through Drug Medi-Cal, a substance abuse carve-out from the regular Medi-Cal system. New benefits offered through county alcohol and drug programs Jan. 1 include residential treatment, inpatient detoxification, enhanced outpatient counseling, methadone maintenance, day care services and perinatal treatment.

“There’s been a big treatment gap,” said Victor Kogler, executive director of the not-for-profit California Alcohol and Other Drug Policy Institute. “Only 10% of people who need treatment get it and most don’t seek treatment because they don’t have coverage.”

Los Angeles County primarily contracts with 148 community-based non-profit organizations that manage 561 sites, said Sugita, and it operates one rehab center in Antelope Valley.

According to the state Department of Health Care Services, there are 242,000 currently eligible people in Los Angeles County who need substance abuse services. The California Alcohol and Other Drug Policy Institute estimates that 64,000 additional people will become eligible.

Obstacles to Expanded Coverage Remain

A few bumps may still lie along the road to expanded benefits.

Albert Senella — president of the California Association of Alcohol and Drug Program Executives and president and CEO of Tarzana Treatment Centers — thinks there could be a capacity problem because federal regulations allow reimbursement only for residential treatment centers with 16 or fewer beds.

“While there are a lot of small licensed residential facilities in the state, there are next to none that are also Drug Medi-Cal-certified, and it is unclear how many could even meet the certification requirements,” he said. “It will take time for those that do meet requirements to get certified by the state, possibly creating a backlog.”

Senella said he’s pleased about the expanded inpatient medical detox benefit, a step up from current offerings of outpatient opiate detox. Patients typically must go through detox before they can take advantage of other services.

The medical detox benefit isn’t part of the carve-out because it already exists in the regular Medi-Cal fee-for-service system, said Senella. “Previously, the only way hospital detox could occur was if a medical condition, like liver disease or a heart problem, required hospitalization in the first place. Now it’s an elective medical benefit based on medical necessity.” That term defines standards for how decisions are made and enforced with respect to authorizing treatment.

However, he said, “Lots of people who need substance abuse services may not meet medical necessity under Drug Medi-Cal, and if they don’t, they can’t be served.”

He added, “Also, a lot of people who’ll be on Medi-Cal in January get serviced through other funding sources, like the Substance Abuse Treatment and Prevention Block Grant. A gradual transition will occur from other funding sources into the Drug Medi-Cal benefit for those who can meet medical necessity criteria.”

Primary care physicians will be encouraged to screen for substance abuse and will get reimbursed, he said, and that process may also increase referral volume.

To be reimbursed, physicians must be registered as Medi-Cal providers. “Truth is, very few individual practitioners will see people on Medi-Cal because the return rate is so low,” said Kita Curry, CEO of Didi Hirsch Mental Health Services, which provides mental health and substance abuse service, regardless of ability to pay, at 11 Southern California sites.

‘A Transition Period’ … Not ‘Armageddon’

“It’s not going to be Armageddon on Jan. 1, but a transition period,” said Michael Ballue — chief strategy officer for Behavioral Health Services, a not-for-profit community-based health care organization providing substance abuse and other related health services to Southern California residents. He called new substance abuse benefits “fairly robust” and said his organization has been preparing for changes, including evaluating its clinician mix because Medi-Cal funds will limit providers.

“For example, CMS doesn’t recognize licensed marriage and family therapists, but it does recognize licensed clinical social workers,” he said. “That will be a shift for us, putting more focus on social workers because their services are billable when the patients are dual eligible and have Medicare and Medi-Cal.”

Behavioral Health Services is planning on expanding its physician roster a bit and adjusting the workload, he said, changing some methods of treatment delivery. That’s because any use of the Drug Medi-Cal benefit — now and in the future — requires physician involvement. In the past, about 5% of his business required physician orders and involvement. In two years, it could be 85%, he said.

“That will be a huge change in the percentage of people that require physician involvement, and my concern is that doctors are an expensive resource for public sector nonprofits, especially smaller providers,” Ballue said.

More counselors are needed, as are more medical personnel overall, says Steve Maulhardt, executive vice president of L.A.-based Aegis Medical Systems, which operates the largest and most advanced network of narcotic treatment programs in California. “We’re gearing up, trying to hire new people. We have pre-doctoral and post-doctoral candidates doing internships, and we’re utilizing them for this growth. Available new hires of certified substance abuse disorder counselors are not enough and not well trained enough. That could be the Achilles heel for the whole state.”

Opening Treatment Doors

“Finally, the fact that someone’s disease is addiction as opposed to mental illness won’t stand in the way of getting full benefits,” said Rusty Selix, executive director of the California Council of Community Mental Health Agencies.

Both conditions frequently go hand-in-hand, as confirmed by a January 2012 report from the Substance Abuse and Mental Health Services Administration that found that U.S. residents suffering mental illnesses were three times more likely to have developed substance dependence or substance abuse disorders than adults who had not experienced mental illness. The report also found one in five U. S. adults suffered mental illness in 2010.

“When people’s primary diagnosis is a mental disorder, the breadth and depth of service they can receive and the reimbursement is much better than if they walk through the substance abuse door,” said Curry. “There are still greater barriers within the substance abuse world than in the mental health world.”

Substance abuse is also a disorder of the brain, she said. Curry wonders why reimbursement rates are so “inadequate” with rules and restrictions about how often and where someone can be seen. For example, many homeless residents have substance abuse problems and would otherwise qualify for Medi-Cal.

“With mental health, we can outreach to those people or those who aren’t very mobile by going out into the field. Not with Drug Medi-Cal — treatment can only be done at your site,” she said.

Stigma about substance abuse still wields its pervasive power, and because of that, Curry isn’t sure that “people will come in hordes” for treatment. 

“It is distressing that California is the best state in the nation when it comes to embracing affordable care and parity,” she said. “If we had embraced substance abuse wholeheartedly, we could have worked out issues early. There’s an intrinsic reluctance in society and institutions are part of society. There’s an underlying feeling that people don’t think of substance abuse as an illness, and that attitude is going to take a while to change.”

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