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Update on Medicare Coverage of Substance Abuse Services


Email Alert

May 6, 2016

By Anna Whites*

CMS shared a new MLNMatters learning handout, “Medicare Coverage of Substance Abuse Services.” The topic is of interest to providers as states transition away from the cash-only model of addiction treatment and towards services appropriately covered under the parity laws. Education on this topic helps ensure that patients and providers are educated about the right of a patient to have the care provided covered by Medicare or comparable commercial payers.

The handout, MLNMatters Number SE 1604, provides information on services for substance abuse disorders available under Medicare and Medicare information about substance abuse disorders available online, including links to additional educational materials and sites.

CMS makes clear that services for substance abuse disorders are available and covered under Medicare as long as those services are “reasonable and necessary.” Current Medicare coverage includes inpatient treatment, with a bundled or per diem payment that includes professional services not recognized for separate billing, such as peer counselors, and medications used in the course of the inpatient treatment.

Outpatient treatment is not payable to a provider as an independent facility or as an integrated bundle of services payment, but is payable on a service basis for those services recognized by Medicare. This includes counseling by a licensed and enrolled clinical social worker, psychologist, or psychiatrist, as well as services by auxiliary personnel incident to a physician’s services. The types of providers who can offer services that are entitled to Medicare reimbursement include physicians, clinical psychologists, clinical social workers, clinical nurse specialists, physician assistants, and certified nurse midwives. This expanded list of service providers make it easier for all patients to access the care needed.

Recently, CMS clarified payments for Partial Hospitalization Programs (PHPs), which are intensive outpatient psychiatric day programs furnished as an alternative to inpatient psychiatric hospitalization. These services include a minimum of 20 hours per week of PHP therapeutic services, as evidenced by a plan of care. Both hospital outpatient departments and Community Mental Health Centers are qualified to provide this type of service under Medicare. MLNMatters Special Article SE 1512 provides additional guidance for billing Medicare for PHP services.

CMS also affirmed the importance of initial Screening, Brief Intervention, and Referral to Treatment (SBIRT) services. This simple screening can be performed by any licensed provider and allows analysis of whether the patient would benefit from referral to a specialist in behavioral health or substance abuse treatment. Medicare covers SBIRT performed by physicians, non-physician providers, and outpatient hospitals.

The Medicare coverage also includes Medicare Part D drugs, as defined in the “Medicare Prescription Drug Benefit Manual,” Ch. 6, Section 10.8, as well as clinical laboratory services that are reasonable and necessary for the diagnosis or treatment of illness or injury. CMS confirmed that testing for drugs of abuse where reasonable and necessary can help manage the treatment of patients with substance abuse.

The CMS guidance will assist providers in ensuring that patients receive covered medical treatment in this fast-growing field.

*We would like to thank Anna Whites (Anna Whites Law Office, Frankfort, KY) for authoring this email alert.

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