Governor Pat Quinn

(Springfield, IL) – Quinn Administration officials have agreed to a state-level fix of an Obamacare loophole that has stymied the vast majority of Illinois’ residential substance abuse providers from serving new Medicaid enrollees.

A federal Medicaid law, which predates the Affordable Care Act, prohibits Medicaid certification of residential treatment providers with more than 16 beds, a measure intended to prevent the warehousing of individuals struggling to recover from substance abuse.

But Obamacare provides a new, guaranteed benefit of substance abuse treatment through Medicaid, and residential treatment is a key benefit. The situation of federal laws working at cross-purposes has bedeviled Illinois officials and those in other states, according to the chief of Illinois’ top advocate group.

“It’s a tale of two federal laws in conflict with each other creating havoc across the county and an ineffective Congress unwilling to fix the problem,” Illinois Alcoholism and Drug Dependence Association CEO Sara Moscato Howe. “The Affordable Care Act authorizes residential treatment in the benefits package, but the bill’s architects failed to reconcile it with the older law”.

Howe said that the problem has been festering in Illinois for more than a year, but state officials, realizing that Washington gridlock made a federal solution impossible, have been forced to design their own plan.

Earlier this summer, State Senator Heather Steans (D-Chicago), State Rep. Greg Harris (D-Chicago), Illinois House and Senate staff, Governor’s Office of Management and Budget officials, Healthcare & Family Services Director Julie Hamos, Department of Human Services Secretary Michelle Saddler, and DHS Division of Alcoholism & Substance Abuse Director Theodora Binion met with representatives of IADDA, the Community Behavioral Healthcare Association, and the Illinois Association of Rehabilitation Facilities to discuss options to solve the problem.

On Friday, August 22, the advocates and lawmakers learned that the Quinn Administration had met on Thursday, last week, with the CEOs of Illinois’ Medicaid Managed Care Organizations, which are gradually assuming responsibility for all Illinois Medicaid patients, and instructed them to begin covering medically-necessary residential treatment services and room and board costs at both Medicaid and Non-Medicaid certified facilities.

“This order includes already-existing Medicaid patient populations, as well as the expanded ACA patient population,” said Howe. “Additionally, the Department of Healthcare & Family Services is now working with an actuary to determine if the rate currently paid to the managed care providers adequately covers residential services”.

Howe noted that Quinn Administration officials reminded community-based treatment advocates that the managed care companies would remain as the decision makers regarding patient residential placement, not the providers.

The managed care organizations will not be, however, the only group slated for a rate review, Howe said.

“It was also acknowledged by Quinn Administration officials that the state’s current rates for all levels of addiction treatment care are inadequate,” Howe stated. “A state rate review for community based providers will also be undertaken”.

IADDA recently commissioned an actuarial report comparing current state treatment service rates to known cost indices and that study revealed that from 1990-2013, medical costs in Illinois rose 162% while addiction treatment reimbursement rose by only 21% during the same 23-year time period, a circumstance that strictly limits the number of people served.

“The state’s current rates are relic of the early 1990s,” said Howe. “Obsolete funding is preventing Illinois from confront modern addiction challenges, such as the heroin and prescription drug epidemics raging in Illinois and tightly limits the number of people that we can help.”

Still, last week’s announcement was a “big win” for Illinois residents working to overcome addiction and key officials warranted advocates’ “gratitude”, Howe noted.

“For those who seek and need residential treatment, the Quinn Administration’s announcement is a big win,” said Howe. “And Rep. Harris, Senator Steans, Secretary Saddler, Director Hamos, and Director Binion deserve our deepest gratitude for their work and commitment to find a solution.”

Sara Moscato Howe, showe@iadda.org