4 Ways to Control Substance Abuse Treatment Costs

Treating opioid addiction has become a costly problem for health plans. Particularly troubling are reports of unethical treatment facilities that exploit patients, failing to deliver on their promises of recovery. Because many of these facilities are not in-network health care providers, they leave health and welfare plans and plan participants with big bills.

4 Ways to Control Substance Abuse Treatment Costs

Two recent Benefits Magazine articles addressed how the costs of opioid and substance abuse treatment are affecting health funds and included strategies for managing those costs.

The New England Carpenters Health Benefits Fund saw its substance abuse treatment costs balloon to $2 million annually and was “getting taken to the cleaners” by out-of-network treatment centers treating plan beneficiaries for substance abuse disorders, said Jeffrey Werner, executive director of the Wilmington, Massachusetts-based fund, in the article, “Curbing the High Cost of Opioid Abuse Treatment,” in the April issue of Benefits Magazine.

A network of brokers attended local recovery meetings to refer patients to out-of-state treatment facilities, mostly in Florida and California. “Quality of care in these facilities was suspect, and patients often did not finish treatment,” Werner said. At the same time, many plan participants and their families perceived that they would not have adequate access to care through in-area, in-network facilities.

Many health and welfare funds face similar challenges, according to Andy Johnson, author of “The Opioid Epidemic: Managing Treatment Costs,” in the June issue of Benefits Magazine. Johnson is the fund administrator of the Teamster Center Services (TCS) Fund, a Taft-Hartley trust fund in New York City.

[Related: Mental Health and Substance Abuse Benefits: 2016 Survey Results]

Johnson suggests plans consider the following steps to control the costs of out-of-network substance abuse treatment costs.

  1. Review how out-of-network clams are reimbursed and billed. Plans should review their reimbursement policies for out-of-network claims as well as the actual claims to be sure they are not being overbilled.
  2. Control incoming communications. It is good practice to direct all calls from treatment facilities and plan participants to a gatekeeper, either a specific employee or department within the plan or the employee assistance program (EAP), to ensure that they are handled according to plan policies and procedures and to avoid miscommunication.
  3. Address drug testing. Plans should decide whether they will cover out-of-network drug testing or elect to use their own reimbursement schedule for testing, with limits on frequency and allowable reimbursement rates
  4. Communicate with participants. Keep participants informed about changes and warn them about the unethical behavior of treatment programs.

The New England Carpenters fund conducted a retrospective review of care for substance abuse cases and negotiated reimbursement based on the in-network rate for allowable charges. The fund also made sure that all calls from out-of-network treatment facilities went through the fund office.

[Related: When Opioid Addiction Shows Up At Work]

One of the biggest efforts, however, was to develop a new model of care for substance abuse. A new three-phase continuum of care, called extended services, was developed to treat plan members or beneficiaries with substance use disorders:

  1. Detoxification: three to ten days of medically supervised care, typically at a hospital
  2. Acute residential therapy: seven days at an inpatient rehabilitation facility
  3. Extended services: up to 90 days at a halfway house. Stays are approved in 30-day segments.

The fund contracted with a local foundation to provide halfway house facilities.

“We can offer a solution to patients and families that’s realistic,” Werner said. “As an alternative to going down to Florida or out to California, we’re going to take care of you. You’ve got a place where you can live while you can work on your recovery and rebuild family relationships, which takes time.”

That piece is critical, as Johnson wrote: “Plan sponsors have a fiduciary responsibility to take action in the best interests of the plan and protect financial assets. However, it is critical that they never lose sight of the fact that families who are experiencing the crisis of drug addiction are often desperate for help and looking for answers. With proper policies and procedures in place and frequent, clear communication with participants, plans can reduce their financial exposure to the opioid epidemic and encourage their membership to turn to their health plan and its behavioral health partners first when looking for assistance.”

Kathy Bergstrom, CEBS
Kathy Bergstrom, CEBS
Editor, Publications, at the International Foundation

Leave a Comment

Your email address will not be published. Required fields are marked *