Overview

The Shatterproof Payer-Based Strategies Initiative was created to move the needle on insurance coverage of addiction treatment in order to make high quality, science-based care accessible to patients nationwide.

Insurance typically covers some aspects of addiction treatment, but not always the types of care that give patients the best chances of long-term recovery. Current research shows that insurance often covers things like short stays in detoxification or rehabilitation programs but not always science-based long-term care. This coverage generally tends to focus on paying for acute services rather than improving long-term patient outcomes. [1]

As part of our commitment to improve the addiction treatment system, Shatterproof is working to align financial incentives with best practices of addiction treatment, as encompassed in the Shatterproof National Principles of Care^© for Substance Use Disorder Treatment.

One component of this work - the Payer Pilot - was a multi-stakeholder collaboration between Shatterproof, the Leonard Davis Institute of Health Economics , and key insurance carriers.

The Issue

Substance use disorders (SUDs), or what we commonly call addiction, are chronic medical conditions. SUDs can be managed with the same effectiveness as other chronic diseases using science-based best practices, such as the ones outlined in the Shatterproof National Principles of Care^© .

However, the addiction treatment system has developed largely outside of mainstream healthcare, resulting in fragmentation in both delivery and payment. Despite advancements in science, technology, and pharmacology, science-based addiction treatment services are largely unavailable in mainstream healthcare and even specialty addiction treatment programs. In fact, only about one third of specialty addiction treatment programs offer even one of the FDA-approved medications to treat opioid addiction—and less than 2% offer all three. [2]

Unlike other areas of healthcare, only 18% of addiction treatment is paid for by private health insurance. [3] Instead, large portions of funding for addiction treatment have historically come from state and federal grant programs. This has resulted in the financial, geographic, and cultural separation of addiction treatment from mainstream healthcare.

Some advancements have been made to close these gaps. The Mental Health Parity and Addiction Equity Act, for example, requires health insurance coverage of mental health and addiction services to be at par with other medical benefits. And the Affordable Care Act of 2010 further expanded coverage requirements for addiction treatment services. Still, barriers related to insurance coverage for addiction treatment remain.

One in four Americans needing but not receiving addiction treatment report lack of health care coverage and inability to afford care as the reason. [4]

Fortunately, organizations across the country are actively working to ensure addiction is covered like other chronic diseases.

In addition to expanding treatment access for patients, Shatterproof’s work in this space will also ease insurance-related barriers faced by providers. Current barriers reported by providers include delays in payment, complicated approval requirements, and high cost burdens. For many, these barriers outweigh incentives to offer science-based treatment, which may contribute to the lack of providers in the addiction treatment space. [5]

Insurers have an opportunity to reduce both patient and provider barriers and create incentives that will transform the addiction treatment system. Shatterproof is committed to working with public and private payers to ensure that barriers to care are reduced and that payment systems incentivize science-based care.

The Opportunity

Payers recognize the effectiveness of treatments for addiction, and the fact that the current treatment system is broken. In a historic 2017 announcement , 16 health insurance companies representing over 248 million lives showed their commitment to changing the addiction treatment system by agreeing to “identify, promote, and reward” care that aligns with Shatterproof’s National Principles of Care^© . With this agreement, payers have stepped forward to begin working with our Substance Use Disorder Treatment Task Force . Together, we’ll implement strategies to financially incentivize and remove barriers to care that is of the highest quality.

Shatterproof is working with payers to understand the current landscape of insurance coverage for addiction treatment, and to develop and implement strategies that support delivery of care that aligns with the Principles.

Pilot Research: Payment for Opioid Use Disorder Treatment

To advance this work, Shatterproof partnered with the University of Pennsylvania’s Leonard Davis Institute of Health Economics to conduct a six-month research project to assess health insurance coverage and payment policies related to science-based treatment for opioid addiction.

This research examined both private insurance companies and state regulations around addiction treatment. The assessment identified areas where insurance policies and payments can and should be modified, and ways to track this information across the industry. Results from this assessment can be used to inform collaboration with payers to implement strategies that incentivize science-based care.

This pilot was made possible by Arnold Ventures. Arnold Ventures' core objective is to maximize opportunity and minimize injustice. Its investments are focused on criminal justice, education, health, and several other key areas.

Read the press release for the pilot research here.

Pilot Findings

Following the first three months of research, the team focused its efforts on specific research areas, including the role alternative payment models (APMs) can play in OUD treatment, payer opportunity for improvement in methadone treatment coverage, and state policies regarding OUD treatment and how these intersect with payer strategies.

Based on the final three months of research, the team determined future research directions that should be pursued more thoroughly. In particular, they found that APMs do hold the potential for transforming some aspects of OUD coverage and treatment, but require further development and evaluation.

Additionally, the team gained insight into the current structure of payment for methadone treatment for OUD and how this payment, coupled with historic stigma, can negatively impact patient access. The team examined opportunities created by payer strategies, such as APMs, to improve patient access and catalyze improvements in the addiction treatment space. These findings were developed into a piece published in Psychiatric Services Economic Grand Rounds.

The team also found that state policies around OUD treatment offer a strong avenue for understanding both the current landscape of treatment coverage, and where changes can be made. Following this research, the team worked with Arnold Ventures to facilitate the potential future work in this space by Law Atlas and Legal Science.

The findings from this project were presented at the Rx Drug Abuse and Heroin Summit in 2019. You can view the presentation slides here.

Project Team

Daniel Polsky, PhD, MPP
Executive Director
Leonard Davis Institute of Health Economics

Samantha Arsenault, MA
Director
National Treatment Quality Initiatives
Shatterproof

Caroline Davidson, MPH
Research Associate
National Treatment Quality Initiatives
Shatterproof