The Opioid Payment Crisis

Addiction services may be a societal necessity – especially as the Central Massachusetts opioid crisis proves particularly fatal – but it is a business, and in this area of medicine, the playing field is not necessarily equal for patients or providers.

This reality has shaped how addiction treatment companies have responded to the pent-up demand for the full spectrum of treatment for people trying to get clean. While certain providers have focused on investing in the more lucrative addiction treatment programs, others have made breaking even their goal.

So even while politicians and public health officials stress the need for both inpatient and outpatient services to stem the growing opioid crisis, providers’ struggles with their bottom lines have resulted in tempered growth.

Lower reimbursement rates

The addiction treatment services field in Central Mass. is certainly expanding, as both bational and local organizations have added new facilities and grown existing programs in the last two years.

TaraVista Behavioral Health Center opened up as an inpatient facility in Devens to treat people with psychiatric illnesses who also require addiction treatment. CEO Michael Krupa said TaraVista is licensed as a psychiatric hospital, rather than strictly an addiction treatment services provider.

While inpatient addiction treatment services are sought after, operating as a psychiatric hospital makes TaraVista solvent, Krupa said, since the reimbursement rates for addiction services are significantly lower than inpatient psychiatric service rates.

Still, about half of the patients admitted since TaraVista opened doors in November struggle with addiction, making the facility a valued resource in a Central Massachusetts area with scarce inpatient addiction treatment options.

Once fully online, the 108-bed TaraVista will accept patients covered by Medicare and Medicaid insurance, another important distinction for those in need of addiction treatment.
Medicaid falls short

The state Bureau of Substance Abuse Services (BSAS) funds a certain number of beds based on the population and treatment access in different parts of the state. Some providers contract with the state to provide those services for Medicaid patients, while others don’t accept Medicaid patients, offering services only to patients paying out of pocket, or covered by private insurance.

This means providers who house Medicaid beds receive lower reimbursements for the same services, and people who have Medicaid (MassHealth) must seek treatment from BSAS-licensed providers.

People who struggle with opioid addiction are more likely to have MassHealth as their primary insurance than anything else – with 42 percent using Medicaid vs. 26 percent using commercial insurance and 24 percent using Medicare, according to a 2014 report from the Massachusetts Health Policy Commission.

Kurt Isaacson, president and CEO of Worcester addiction treatment company Spectrum Health Systems, said the daily Medicaid rate for residential addiction treatment is $108.08 per day, an amount, Isaacson noted, wouldn’t cover the cost of a hotel room and meals for the average person for one day, let alone the clinical costs associated with treatment.

“You have to design programs that are available to private-pay and insured clientele,” Isaacson said.

Spectrum does that at its New England Recovery Center in Westborough. The detox center accepts private-pay and commercially-insured patients only, and it helps balance the operations of the Charles J. Faris Recovery Center, a longer-term residential facility in Westborough that accepts Medicaid and commercially-insured patients. Both opened in 2015.

Isaacson said access issues for Medicaid patients will persist if rates don’t change, but the quality of services is the same, whether a facility accepts Medicaid patients or not.

“There are some amenities, for example, you’d receive concierge-type services you’d receive at [private-pay facilities] but the programming and the staffing are similar,” Isaacson said.
Outpatient profitability

Just as important as inpatient capacity in treating opioid addiction is the availability of robust outpatient services, according to Isaacson and Krupa.

Spectrum, which has services beyond Central Massachusetts, has opened four outpatient facilities in the last three-and-a-half years. The newest in Central Massachusetts is in Leominster, which expands access in the hard-hit North Central Massachusetts area. The company will open another in Millbury this year.

The outpatient locations offer medication-assisted treatment, which is a method that uses drugs like methadone and vivitrol to block opioid cravings.

These outpatient programs are crucial for long-term recovery, Isaacson said, but medication-assisted treatment is also a relatively good money-maker, creating a healthy revenue stream.
State changes lack provider incentive

Isaacson recognized the state’s work under Gov. Charlie Baker to make changes to fight opioid addiction, including a law in March 2016 imposing limits on opioid prescribing, stricter prescription monitoring and requirements for substance abuse screening in emergency rooms and schools.

The state provided funding for 128 detox and stabilization beds after the opioid addiction crisis was dubbed a public health emergency in 2014. However, the rates paid for those beds aren’t attractive to many providers, he said.

Playing the volume game

MassHealth reimbursement rates have dwindled in recent years as the cost of delivering services has increased, said Ed Moore, CEO of Southbridge-based Harrington HealthCare. The trick is staying ahead of that decline.

Harrington opened a new inpatient treatment facility, Harrington Recovery Services at Webster, at the beginning of the year. With a large number of patients covered by MassHealth plans, Harrington is pressured to maximize provider productivity, Moore said.

Greg Mirhej, executive director of Behavioral Health Services at Harrington, said it’s “almost like this pure volume game,” which is frustrating for clinicians who want to provide the best treatment possible.

Meanwhile, addiction services franchises like Recovery Centers of America in Westminster and Sunspire Health in Ashby can forgo treating Medicaid patients entirely if they choose, focusing on the commercial market.

“If you’re in a certain location, and you’re going to be full (with commercially-covered patients) why would you take Medicaid?” Mirhej said.

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Photo courtesy of: WB Journal

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