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Takeaway: Bill is modest in its aims but includes expansion of telehealth, Medicare and Medicaid coverage offset by incentives for MLRs for MCOs

Last week the House and the Senate reconciled their differences in the SUPPORT for Patients and Community Act of 2018 a.k.a the Opioid bill and cleared the bill for passage. The legislation is a pretty modest effort given the scope and scale of the opioid epidemic but does, incrementally, expand access and coverage.

The bill provides more regulatory tailwinds for TDOC and should be a net positive for inpatient mental health providers like UHS, ACHC and AAC. Medicaid Managed Care Organizations might face a headwind from a new policy to encourage a 85 percent MLR and rebates. A closely watch provision that would have expanded commercial coverage for dialysis treatment was opposed by insurers and business groups and was not included.

The bulk of the bill is focused on enhanced reporting, grants to states and other, more traditional federal solutions. Leaving those aside, the major provisions are:

Telemedicine. The final bill contains a number of provisions that relax historical prohibitions on reimbursement by Medicare and Medicaid:

  • Requires CMS to issue guidance to states on options for providing services via telehealth that address substance abuse disorders under Medicaid.
  • Expands Medicare reimbursement for telehealth services for treatment of substance abuse disorder and co-occurring mental health disorders by eliminating the “originating site” geographical location requirements.

Behavioral health is one practice area where telemedicine has met with great success. The dearth of mental health providers, particularly in non-urban areas, combined with the lingering stigma of mental health treatment make telemedicine an ideal access solution. The Department of Defense and the Department of Veterans Affairs have led the way in the use of telemedicine in treating mental health disorders including addiction.

TDOC, UHS, UNH, DVA | WHILE THE NATION WAS KAVA-GNAWING, CONGRESS FINALIZED OPIOID LEGISLATION - Slide5

Teladoc has identified a $12 billion addressable market for telemedicine.

TDOC, UHS, UNH, DVA | WHILE THE NATION WAS KAVA-GNAWING, CONGRESS FINALIZED OPIOID LEGISLATION - Slide6

Institutes of Mental Disease Exclusion. This 1970s era prohibition on treating mental health conditions in an inpatient facility with more than 16 beds will be relaxed. The bill:

  • Creates an unambiguous state option to provide Medicaid coverage for up to 30 days of treatment annually for substance abuse disorder in IMDs in FY 2019 through FY 2022
  • Permits pregnant and post-partum women to be cared for in an IMD setting
  • Codifies regulations that permit managed care plans to cover treatment in an IMD for a certain number of days in a month in lieu of other types of services like outpatient treatment

Additionally, Congress is directing MACPAC to conduct a study on IMDs that receive Medicaid reimbursement. The study will report on the requirements and standards that state Medicaid programs have for IMDs no later than January 2020.

Medication Assisted Treatment. The Trump administration is doing an about-face compared to the Obama era on access to MAT. In response to the sometimes deadly result from methadone treatment, previous policy has focused on abstinence over addiction management. The Trump policy has been to encourage MAT through greater use of buprenorphine and the bill reflects that:

  • Requires Medicaid to cover Medication-assisted Treatment
  • Expands Medicare coverage on a bundled basis to include Medication-assisted Treatment
  • Increases for five years the types of providers who can prescribe or dispense MAT to include Clinical Nurse Specialists, Certified Nurse Midwives and Certified Registered Nurse Anesthetists
  • Makes permanent prescribing authority for physician assistants and nurse practitioners

Otherwise the bill is modest in its aims. It contains a number of reporting requirements including a request to various agencies regarding enforcement of mental health insurance parity. The 21st Century Cures law gave enforcement agencies more teeth to enforce parity in ERISA regulated health plans and Congress wants to know if they are using it.

The bill as originally scored by the CBO would increase the federal deficit by about $45 million. In the final version that cost has been reduced to about $2 million. The budgetary offsets include:

  • Provides incentives for states that voluntarily adopt an 85 percent MLR requirement for Medicaid MCOs by reducing the federal government’s share of rebates.
  • Extends mandatory secondary payer reporting requirements to prescription drug coverage to better coordinate benefits between primary employer-based insurance and Medicare.
  • Requires pharmaceutical companies to inform the FTC of pay-for-delay arrangements
  • Expands the religious exemption under the ACA for minimum health insurance coverage

Twenty-five states and the District of Columbia have MLR requirements for their Medicaid MCOs. Of those, 18 states require the insurer to provide rebates if they do not meet the ~85 percent threshold. Notably, the high population states of California, Texas, New York, Pennsylvania and Connecticut do not have MLRs for Medicaid MCOs.

The bill does not include a controversial provision that would have increased from 30 to 33 months the period for which Medicare is a secondary payer for dialysis services, thus increase commercial coverage an addition three months. The House had approved such a measure but the Senate did not. Conference Committee members came down on the side of the Senate, largely due to opposition from the insurance industry and business groups including the U.S. Chamber of Commerce.

The Senate, assuming they are not too distracted, should approve the bill this week and send it to the President.

Call with questions. 

Emily Evans
Managing Director – Health Policy
Health Policy



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Thomas Tobin
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Andrew Freedman, CFA
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Alexander Ross
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