Medicaid rates pinch treatment centers

Staff writerApril 28, 2014 

The federal government is now picking up the tab for most of Washington's publicly funded treatment of drug addiction, courtesy of President Barack Obama's health care law.

But some providers of drug and alcohol treatment are chafing under the prices paid locally by the expanding Medicaid program.

If providers fold, their patients don't go away; they just show up in emergency rooms. "We just end up paying it through hospital rates, " said Kevin Quigley, secretary of the state Department of Social and Health Services.

State government might be close to finding money to address the most pressing need: keeping the doors open at four small detox centers run by nonprofit organizations.

DSHS is trying to scrounge up a bit more than $240,000 for the facilities, including the ones at Making a Difference in Community in downtown Tacoma and Providence St. Peter Hospital in Lacey. Both say the current Medicaid rates - set by the state based on outdated estimates of providers' costs - are too low to cover their expenses.

Without higher payments, an Everett detox center is threatening to stop taking patients Wednesday.

Medicaid pays roughly $160 a day for each patient at those three facilities and one in Vancouver.

In a letter to Gov. Jay Inslee, Tacoma Mayor Marilyn Strickland and Pierce County Executive Pat McCarthy said that rate, and even the local non-Medicaid rate of $190 a day that formerly applied to most Tacoma patients, fall far short of MDC's cost of about $260 a day. The officials asked for an increase in the Medicaid rate to $275.

But a stopgap solution for the detox centers will leave those providing other kinds of inpatient and outpatient drug treatment around the state to wait for a longer-term study of rates. Some of those are similarly struggling under payment rates that are lower than the providers are used to.

"This is particularly difficult for small, rural counties, " said Norm Redberg, the executive director of Alcohol Drug Dependency Service and Kittitas County substance abuse coordinator. "In my county we are the single service provider for the county."

To cover his agency's losses, Redberg said he is drawing down reserves that were supposed to be used to build a replacement to the antiquated facility that houses it now.

Drug-treatment providers used to be able to count on subsidizing Medicaid patients with other publicly insured patients, whose payment rates were negotiated between the state and counties. In 2013, just 43 percent of publicly funded drug-treatment patients were on Medicaid.

The Medicaid share soared to 77 percent in the first three months after the insurance program expanded Jan. 1 to take in more of the nation's poor, according to initial estimates.

It's not yet clear if the overall demand for drug treatment - about 63,000 patients in 2013 - is increasing, or if patients are simply moving to the new program. In Thurston County, at least, demand seems to be growing.

"We have seen a noticeable influx of patients contacting us for detox and inpatient treatment since the beginning of the year, " Sue Beall, director of behavioral health resources for Providence Health and Services' southwest Washington region, said in a statement. "Many more now have health care coverage, but we do not have the additional capacity or funding to admit all of these patients."

For detox centers, at least, some relief might be at hand.

Budget writers in the Legislature chose not to add money to raise detox payments. They found other uses for the money saved by shifting people to Medicaid.

They weren't convinced the higher use of drug treatment by Medicaid patients would continue, said House budget chairman Ross Hunter, D-Medina.

"I have no idea if it's a permanent shift or a short-term shift or what, " Hunter said, "and they don't either. And I was unwilling to do a rate increase based on one month of data."

But DSHS can raise payment rates by moving money around in its budget, if it can find it.

"We have a potential solution, " said Jane Beyer, a DSHS assistant secretary, "but we need to check in with the different entities that would need to give us their thoughts. . . . We are hopeful, but we're not at a point where we've dotted all the i's and crossed all the t's."

If the raise happens, it would presumably avert the threatened closure of the Everett detox center run by Evergreen Manor and help shore up the finances of the detox facilities at Lacey's Providence St. Peter Chemical Dependency Center, Vancouver's Lifeline Connections and Tacoma's MDC - the Metropolitan Development Council, now doing business as Making a Difference in Community.

The Providence St. Peter center stopped taking new patients after the death of a patient admitted to withdraw from alcohol. It has not set a date to resume.

One in five detox patients at MDC used to have insurance through Medicaid. Now it's at 75 percent and growing, said Troy Christensen, chief of operations and strategy for MDC.

"Come July 1, we would need to find additional government fund sources to stay in business much longer, " Christensen said of the detox center.

Jordan Schrader: 360-786-1826

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