Maryland health officials are seeking permission to use federal dollars to pay for Medicaid patients to get substance-abuse and mental-health treatment outside the state's general hospitals.
Lifting the ban on such spending would expand the options for people seeking care, allowing them to use community treatment facilities that specialize in those services and tend to be less costly than hospitals, said officials from the state Department of Health and Mental Hygiene.
A waiver from the U.S. Centers for Medicare and Medicaid Services would also give state officials another tool to use against the heroin epidemic, which has led to a doubling in overdose deaths from 2010 to 2014, said Shannon McMahon, Maryland's deputy secretary for health care financing.
The funding exclusion "is creating a barrier in our ability to pay for treatment outside of acute-care general hospitals," McMahon said Tuesday. "That's really what this application is seeking, the flexibility to pay for care in the most appropriate setting for individuals that need treatment."
The decades-old ban was created before the proliferation of such treatment facilities, and Maryland and other states have received permission off and on since 1997 to use federal dollars for adults on Medicaid. Money began to phase out in 2006. A pilot program slated to end in December allows Maryland, 10 other states and Washington, D.C., to use Medicaid funds for psychiatric care only in these treatment centers.
Maryland has added about 300,000 people to its Medicaid rolls since the adoption of the Affordable Care Act, expanding the population covered to about 1.3 million. McMahon said they have a higher prevalence of substance-abuse and behavioral health issues.
State officials held a series of public meetings and said the effort has received a lot of support, including from the Sheppard Pratt Health System, which would be limited in its funding without the federal waiver.
"The notion that Medicaid adults should not have access to the same community-based settings for treatment of either psychiatric or addiction conditions as adults covered by other payors is discriminatory and outdated," said Bonnie Katz, vice president of business development and support operations at Sheppard Pratt.
The Maryland Hospital Association, under pressure to reduce health care costs, also supports a waiver that would reduce the burden on its emergency departments and medical units.
"Maryland's hospitals are working to improve the health of communities, and key to this effort is making sure Marylanders have access to the behavioral health services they need in both institutional and community-based settings," said Jim Reiter, an association spokesman. "This waiver can be a critical part of the state's broad-based population health improvement strategy."
There is no timeline for federal officials to act on Maryland's request for a waiver. McMahon said there could be a funding gap and the state would have to decide if it would pay or use other grants to provide care in community facilities, as it has done in the past.
McMahon couldn't say how many more people would enter treatment through busy emergency rooms — or how many would forgo treatment — without an available treatment bed. "We think we are well positioned to make the case" to federal officials to pay, she added.