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April 27, 2018
Medicare Coverage of Opioid Addiction Treatment Services
Medication-Assisted Treatment (MAT) combines
in an OTP. An OTP may administer or dispense, but not
medications, with counseling and behavioral therapies to
prescribe, methadone (see Table 1). Buprenorphine also
provide a holistic approach to treating substance abuse. The
may be dispensed through an OTP. In addition, the Drug
federal government has taken steps to increase the
Addiction Treatment Act of 2000 (DATA 2000; P.L. 106-
availability of MAT in response to a sharp increase in U.S.
310) allows physicians and certain other health care
opioid overdoses and deaths in recent years. Medicare
practitioners to obtain waivers to treat opioid addiction with
beneficiaries may have difficulty gaining access to
buprenorphine (but not with methadone) outside an OTP in
comprehensive MAT services, however, due to coverage
inpatient and outpatient settings. The FDA approved an
limits in the federal health care program.
implantable version of buprenorphine in May 2016 that
lasts for three months, and an injectable version in
Medicare does not have a distinct benefit category for
November 2017 that lasts for a month. The drug may also
substance abuse treatment, although the program pays for
be dispensed in other forms through a retail pharmacy.
certain services deemed reasonable and necessary for
treatment of alcoholism and opioid abuse when provided in
Naltrexone, which is not an opioid, does not carry an
settings certified by the Department of Health and Human
addiction risk and is not regulated under the CSA.
Services (HHS). For example, Medicare does not cover
Naltrexone may be used in an OTP, or may be provided
MAT provided in federally registered opioid treatment
outside an OTP by health care professionals who are
programs (OTPs or methadone clinics). Medicare may pay
allowed to prescribe drugs, without federal DATA waivers.
for MAT drugs and counseling in other certified care
settings but coverage may be limited, enrollees may face
Table 1. Allowable Provision of MAT Drugs
interruptions if they move between care settings, and cost-
sharing may vary. Congress and the Trump Administration
Medication
Providers Authorized to Provide Drugs
are considering proposals for broader Medicare MAT
Data Waiver
Other
coverage, such as a bundled provider payment for a set of
OTPs
Prescribers
Prescribers
defined services and reimbursement for OTPs. This brief
provides background on MAT and Medicare policy.
Methadone
Yes
No
No
How Does MAT Work?
Buprenorphine
Yes
Yes
No
According to the Substance Abuse and Mental Health
Naltrexone
Yes
Yes
Yes
Services Administration (SAMHSA), MAT can provide a
Source: CRS analysis based on 21 U.S.C. §801.
safe and controlled level of medication to help patients
overcome opioid abuse. Research indicates that MAT is
Opioid Use in Medicare
most effective when it combines drug therapy with behavior
The federal Medicare program provides health coverage for
treatments and cognitive therapy (to challenge individual
qualified individuals age 65 and older and individuals with
thought patterns). MAT may be provided in an inpatient
permanent disabilities. The program is expected to serve 60
hospital or treatment program; in the roughly 1,500 OTPs in
million elderly and disabled in 2018. Medicare benefits are
the United States; and, in certain cases, by specially trained
provided through Part A, which covers hospital (inpatient)
physicians or health care providers outside of OTPs.
services; Part B, which covers physician services and other
outpatient care; Part C, a managed care option that covers
The Food and Drug Administration (FDA) has approved
Part A and B benefits (except hospice care); and Part D, a
three medications for treating opioid dependence:
voluntary program that provides coverage of outpatient
methadone, buprenorphine, and naltrexone. Methadone and
prescription drugs through private health plans.
buprenorphine, which are opioids with the potential for
dependence, also may be prescribed for the treatment of
Opioid overutilization is a significant issue in Medicare. A
pain, outside of MAT. The drugs used in MAT may help to
November 2017 report by the HHS Office of Inspector
stabilize brain chemistry, reduce or block the euphoric
General (HHS OIG) found that one in three Part D enrollees
effects of opioids, relieve physiological cravings, and
received an opioid prescription in 2016 (14.4 million out of
normalize body functions. Experts recommend that all three
43.6 million enrollees). Nearly 500,000 Part D enrollees
drugs be available to people in MAT because certain
received what the HHS OIG termed high levels of opioids
medications may be more appropriate for some patients.
(a 120 morphine milligram equivalent [MME] average dose
for at least three months), a figure that did not include Part
Methadone and buprenorphine are regulated under the
D enrollees with cancer or in hospice care. A MME
Controlled Substances Act (CSA; 21 U.S.C. §§801 et seq.).
measures the cumulative use of opioids over a 24-hour
Under the CSA, methadone may be used to treat opioid
period.
addiction within an inpatient setting, such as a hospital, or
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link to page 2 Medicare Coverage of Opioid Addiction Treatment Services
The Centers for Medicare and Medicaid Services (CMS)
category. CMS in guidance has said it will not approve Part
operates a Part D opioid overutilization monitoring system
D formularies that discourage enrollment by patients who
(OMS) to prevent abuse of prescribed opioids in Part D.
require MAT. CMS expects Part D sponsors to set low cost-
Because there are often no set, maximum dosage limits for
sharing for MAT drugs, and to impose prior authorization
opioids, CMS has developed its own dosage and other
(PA) requirements (plan approval before dispensing a
thresholds to identify potential overutilization. The most
prescription) no more than once a year. Still, there is
recent CMS thresholds are based on 2017 opioid
variation in cost-sharing and other requirements for MAT
prescribing guidelines by the Centers for Disease Control
drugs among Part D plans.
and Prevention. Under the OMS program, Part D plans
review and provide case management for at-risk enrollees.
Medicare Part C plans must cover the Parts A and B
(The policy excludes individuals in hospice or cancer
components of MAT and may offer Part D coverage.
treatment.) MAT drugs are not counted in OMS dosage
Although Medicare does not cover methadone for MAT
criteria. Starting in 2019, Part D plans may limit the number
under Parts B or D, a Part C plan may cover methadone for
of prescribers and pharmacies used by enrollees at risk of
MAT as a supplemental benefit—meaning a benefit that is
overutilizing commonly abused drugs.
not otherwise covered by Medicare.
Medicare Coverage of Substance Abuse Services
Table 2. Medicare Coverage of MAT Services
Medicare currently covers MAT as a series of discrete
Part A
Inpatient counseling and drugs for covered stay in a
services, rather than as an integrated program (Table 2).
Medicare-approved hospital or in-patient facility.
Medicare Part A covers inpatient services for substance
Part B
Outpatient counseling, physician services, and MAT
abuse at a qualified hospital or psychiatric hospital.
drugs not usually self-administered, including some
(Medicare A pays up to 190 days of inpatient psychiatric
forms of buprenorphine, furnished in a Medicare-
hospital services during an enrollee’s lifetime.) Part A
approved facility. Methadone is not covered because
covers approved medications when used for inpatient
Medicare law does not recognize OTPs as providers.
treatment. Beneficiaries pay applicable deductibles and
Part D
MAT drugs dispensed by a retail pharmacy via
copayments.
prescription. Methadone for pain may be prescribed
and is covered by Part D. Methadone for MAT may
Medicare Part B may cover MAT-related services in
be dispensed—not prescribed—and is not covered.
approved outpatient settings such as community health
centers or physicians’ offices. Part B covers physician and
Part C
Required A and B services, and Part D services if plan
professional services and may also cover psychiatric
includes drug component. Methadone may be
services (partial hospitalization services) including therapy,
covered as a supplemental benefit.
drugs, and counseling. Enrollees pay a deductible and 20%
Source: CRS table based on CMS data.
coinsurance for Part B services.
Medicare MAT Reimbursement Proposals
Part B may cover outpatient MAT drugs for opioid
House and Senate committees have held a series of hearings
withdrawal when administered by an approved provider,
during the 115th Congress to examine Medicare coverage of
such as a physician with a DATA waiver who participates
MAT services. Lawmakers have introduced various pieces
in Medicare. Medicare generally reimburses physicians and
of legislation to create a Medicare MAT bundled payment
other providers for covered Part B drugs at 106% of the
for providers, which would cover a comprehensive suite of
volume-weighted average sales price. Medicare pays
services. Medicare-covered services could include such
providers separately for the administration of most Part B
things as patient intake and assessment; counseling and
drugs. Since January 2018, Medicare Part B has covered the
medical care; and administration of medication and patient
insertion and removal of buprenorphine implants. Medicare
monitoring. Some of the bills would expand Medicare
statutes do not recognize OTP clinics for reimbursement.
reimbursement to OTPs, including coverage of methadone.
Because methadone for MAT may be provided only in
Among the bills are H.R. 5083 and H.R. 5080.
OTPs, it is not covered by Part B.
The Trump Administration’s FY2019 budget proposal calls
Medicare Part D plans cover outpatient drugs that may be
for a demonstration program to test the effectiveness of
dispensed in a retail pharmacy upon a prescription for a
providing Medicare bundled reimbursement on a per-week-
medically accepted indication. Part D plans may cover
per-patient basis to MAT providers. The pilot program
methadone when prescribed for pain. Because methadone
would recognize OTPs and substance abuse treatment
used for outpatient MAT may be dispensed only in an OTP
facilities as independent provider types for Medicare
clinic, it is not covered by Part D.
reimbursement. Outpatient counseling services would be
billed separately, as necessary. The pilot could be targeted
Medicare Part D plans must cover other self-administered
at Medicare enrollees identified as at-risk through the OMS,
MAT drugs, either on their formularies (list of covered
and could be expanded nationwide if found to be effective.
drugs) or via a coverage exception request by an enrollee.
Part D plans also must provide a transition supply of MAT
Suzanne M. Kirchhoff, Analyst in Health Care Financing
drugs for new enrollees who are already in treatment. While
Johnathan H. Duff, Analyst in Health Policy
HHS may not set a central Part D formulary, each Part D
plan must cover at least two drugs in each class and
IF10875
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Medicare Coverage of Opioid Addiction Treatment Services
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