Alcohol and Drug Use and Health Care Expenses

By Robert L. Moore, MD, MPH, MBA, Chief Medical Officer

In 2017, Partnership HealthPlan (PHC) spent $178 million to provide inpatient medical care for members with a primary or secondary diagnosis of a substance use disorder (SUD).  This represents about 24% of all PHC-covered hospital costs (including costs for maternity and pediatric inpatient care).

Studies done at Kaiser South Sacramento found that an integrated approach to treatment of Substance Use Disorder (mainly Alcohol and Opioid Use Disorders) reduced inpatient hospital and ER visits, saving about $1.44 for every $1.00 spent on integrated treatment (combining SUD treatment, mental health treatment and physical health treatment).  In terms of scale, the potential impact is impressive and inspiring.

PHC is pursuing 3 strategies to improve the quality of life for our members with SUD:

  1. A regional model for health plan administration of traditional SUD services
  2. Support for housing high cost members affected by homelessness
  3. Bolstering the treatment of SUD within primary care and acute care hospital settings.

Regional Model:  First, Partnership HealthPlan is in the midst of negotiations with the California Department of Health Care Services to develop a regional model for providing Substance Use Services to the Medi-Cal population.  These services would include outpatient and residential treatment, as well as Opioid Treatment Centers or “Methadone clinics.”  The provider network for these services is very thin in our service area, so PHC is working to increase capacity.  No other Medi-Cal Managed Care plan in California is seeking to integrate SUD services, although many other states in the United States have done so.

Homelessness:  Second, the combination of homelessness with substance use is associated with high costs.  23% of inpatient expenses for 2017 were incurred by members who were homeless. Studies show that previous policies that required treatment of substance use before offering housing have mostly not helped.  The current trend is “housing first” where housing plus intensive social support is provided, resulting in lower utilization of health care resources and more success in reducing substance use.

In 2017, the PHC invested $25 million to complement local funding to address homelessness, with particular emphasis on those with the highest use of resources.

Leveraging our Current Providers:  Services addressing SUD on different levels can be provided in our current PHC network, including primary care and acute care hospital settings.

Primary care can include medication-assisted therapy for opioid use disorder and home or community based alcohol withdrawal management.  When provided with behavioral health counselling (in many of our Health Centers), this integrated environment has proved successful.  Substance use services provided by primary care clinicians is paid by PHC when provided by PHC primary care or mental health clinicians who are addressing mental health conditions such as depression and anxiety.

Current PHC initiatives support our goal to reduce the burden of SUD in our community:

  • PHC’s successful Intensive Out-Patient Care Management program (IOPCM) provides intensive outpatient care management though agreements with community organizations (mostly Health Centers). About 40% of individuals in this program have some type of SUD.
  • PHC seeks to decrease the number of individuals newly addicted to opioids through limits on initial opioid prescriptions that follow CDC guidelines, part of our Managing Pain Safely
  • PHC is supporting two innovative community-based programs for high risk individuals: the Petaluma Sober Circle and La Clinica Vallejo’s Transition Clinic.
  • PHC is hosting a series of educational events promoting improved care for pregnant women and newborns who are exposed to opioids. The next will be on October 1, with support from the California Healthcare Foundation.  Follow this link to register:

For acute care hospitals, voluntary inpatient detox (VID) is covered by state Medi-Cal, but is under-used.  Prior to implementation of the Affordable Care Act in 2014, VID was not covered in acute care hospitals.  State guidance on Treatment Authorization Request criteria was vague, but was clarified this year (as summarized in the Spring PHC Provider Newsletter). When the state finally did announce coverage, it was not widely publicized and unclear billing requirements led to lack of success with reimbursement.  For any acute care hospitals reading this newsletter, here they are:

  • Claims must include a specific phrase in Box 80 {“Remarks” field) on the claim form when billing DHCS for VID for Medi-Cal managed care beneficiaries. The phrase that must be included in Box 80 is “Voluntary Inpatient Detoxification” or “Voluntary Inpatient Detox.”
  • VID TARs should also be submitted with the VID special handling (SH) code, which is “VID”.

Our Hospital Quality Symposium in August featured speakers describing the benefits of initiation of Medication Assisted Therapy for opioid use disorder in the inpatient and emergency department settings.

Summary:  PHC has 3 strategies for addressing the high costs associated with SUD: integration of SUD services at the health plan level, support of “housing first” for homeless individuals with SUD, and support of SUD services provided by physical health providers.

To be successful, we will need to have sustained and meaningful communication with many of our community partners, persuading them to make programmatic changes and work together in new ways.

We at PHC are committed to doing the hard work necessary to make this happen, for the good of our members, our community, and the taxpayers of California.