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Published in final edited form as: Health Aff (Millwood). 2015 May;34(5):828–835. doi: 10.1377/hlthaff.2014.1330

Despite Resources From The ACA, Most States Do Little To Help Addiction Treatment Programs Implement Health Care Reform

Christina Andrews 1, Amanda Abraham 2, Colleen M Grogan 3, Harold A Pollock 4, Clifford Bersamira 5, Keith Humphreys 6, Peter Friedmann 7
PMCID: PMC4706741  NIHMSID: NIHMS748558  PMID: 25941285

Abstract

The Affordable Care Act (ACA) dramatically expands health insurance for addiction treatment and provides unprecedented opportunities for service growth and delivery model reform. Yet most addiction treatment programs lack the staffing and technological capabilities to respond successfully to ACA-driven system change. In light of these challenges, we conducted a national survey to examine how Single State Agencies for addiction treatment—the state governmental organizations charged with overseeing addiction treatment programs—are helping programs respond to new requirements under the ACA. We found that most Single State Agencies provide little assistance to addiction treatment programs. Most agencies are helping programs develop collaborations with other health service programs. However, fewer than half reported providing help in modernizing systems to support insurance participation, and only one in three provided assistance with enrollment outreach. In the absence of technical assistance, it is unlikely that addiction treatment programs will fully realize the ACA’s promise to improve access to and quality of addiction treatment.

The Affordable Care Act (ACA) dramatically expands health insurance for addiction treatment in the United States.1 Together, the expansion of Medicaid, the creation of federal and state-based health insurance Marketplaces, the extension of parental insurance to adult children up to the age of twenty-six, and the mandate to include addiction treatment in the essential health benefit package will greatly increase the number of people whose health insurance covers addiction treatment. If all states adopted the ACA Medicaid expansion, as many as 4.8 million uninsured Americans who satisfy screening criteria for substance use disorders could eventually become eligible to obtain health insurance through Medicaid or the Marketplaces.2,3

Moreover, the ACA extends parity requirements, mandated for health insurance provided by large employers in the Mental Health Parity and Addiction Equity Act of 2008, to insurance provided by small employers, individual plans purchased through the Marketplaces, and the Medicaid expansion. Parity requirements prevent insurers from placing limits on the quantity of addiction treatment patients receive that are more restrictive than those placed on other medical or surgical services. Taken together, these changes could extend parity protections to more than sixty-two million people if all states took up some version of Medicaid expansion.4

Arguably, no other health care sector will be more deeply affected by the ACA than the nation’s addiction treatment system.5–7 Major changes will occur in the structure of the addiction treatment services supplied and in the amount consumers demand. Both of these factors should drive significant growth in addiction treatment services.

Federal, state, and local grants for addiction treatment—including those from the Substance Abuse Prevention and Treatment Block Grant program—are projected to remain the largest source of funding for safety-net addiction treatment through 2020. However, these sources of funding are expected to grow at a slower pace than insurance-based forms of payment.8

Recent projections suggest that total addiction treatment spending in the United States will increase from $24.3 billion in 2009 to $42 billion in 2020 and that this growth will be driven by increases in public insurance coverage and ACA-related efforts to integrate addiction treatment into the broader spectrum of health services.8 Medicaid expenditures for addiction treatment are expected to more than double during this period, increasing from $5.2 billion to $11.9 billion and making Medicaid the fastest-growing source of payment for addiction treatment.8 During the same period, private insurance expenditures for addiction treatment are also projected to rise, from $5.1 billion to $8.5 billion.8

These expansions in public and private health insurance, along with parity requirements, provide unprecedented opportunities for growth in the services provided and for important reforms to addiction treatment delivery models. The ACA establishes new financial incentives to improve coordination between primary care and behavioral health services through patient-centered medical homes, accountable care organizations, and demonstration programs that test novel approaches to organizing and financing health care.1,5 These incentives are likely to prompt many existing programs of health and mental health services to expand their services to include addiction treatment.

These reforms have the potential to improve access and treatment outcomes. However, they also pose important challenges to the current addiction treatment delivery system. Because addiction treatment programs have historically operated separately from the rest of the health care system—with different institutional values, capacities, and funding streams—sizable barriers remain to integrating addiction treatment into mainstream health care.9–11

By design, many addiction treatment programs will also face increased competition from new entrants to the field, particularly primary care and mental health service programs. To compete successfully, addiction treatment programs will need to develop collaborative relationships with other health and mental health programs to establish a continuum of care for people who experience—or are at risk of developing—substance use disorders.5,7,12

Addiction treatment programs must also adapt to changes in financing, as public and private insurance will soon become the dominant sources of funding. Just over half of addiction treatment programs do not accept any health insurance, in many cases because the programs cannot meet insurers’ credentialing requirements.13,14 Many addiction treatment programs do not employ clinicians with medical and other professional degrees, whose direct service delivery, supervision, or referral are necessary for insurer-approved reimbursement. In 2009 fewer than 40 percent of addiction treatment programs employed a physician on staff, and fewer than 50 percent of addiction treatment staff members possessed a master’s degree in any field.15

Furthermore, many addiction treatment programs lack the technology to bill health insurance programs or maintain electronic health record (EHR) systems that meet current standards. In a nationally representative sample of publicly and privately funded addiction treatment programs, Lori Ducharme and colleagues found that 23 percent of the programs had no computer systems, and fewer than one-third had partially or fully computerized patient records.16 More recent data, collected in 2012, indicate that addiction treatment programs continue to face significant problems in this area, with 63 percent of programs identified as “need to begin” or in the “early stages” in terms of administrative information technology (IT).17

Not surprisingly, agencies with annual budgets of less than $5 million were less likely than agencies with larger budgets to report high readiness in this area.18 To overcome these barriers, addiction treatment programs are likely to require significant technical assistance and investment in staff and IT.

In sum, the system of formal substance abuse treatment in the United States must undergo a process of modernization and structural transformation to remain relevant in this new era of health care. In anticipation of the challenges to addiction treatment programs posed by health reform, the ACA provides a range of resources to assist states. The resources include funds for various implementation-related activities, including increasing service capacity, creating and enhancing EHR systems, and integrating and coordinating health services.

The extent to which states have used these resources specifically to improve addiction treatment under the ACA is unclear. Moreover, little is known about how states may be rethinking the use of their Substance Abuse Prevention and Treatment Block Grants in response to the expanded public and private coverage of addiction treatment.

The latter issue is particularly important. Gaps in coverage for many addiction treatment services, such as case management and supportive services, are expected to persist despite the extension of parity requirements in the Mental Health Parity and Addiction Equity Act to Medicaid and the health insurance Marketplaces.19 Improved understanding of how states plan to use block grants is also valuable for policy makers who are considering the future of these federal and state funding streams.

To examine these health policy issues, we conducted a survey of all of the nation’s Single State Agencies, the state governmental organizations charged with licensing and overseeing addiction treatment programs and allocating state block grant funds.20 We asked three questions: What types of technical assistance are the agencies providing to help addiction treatment programs prepare for the continuing implementation of the ACA? Do the types of technical assistance provided vary depending on states’ decisions about expanding Medicaid and about creating their own health insurance Marketplaces? And in light of anticipated increases in private and public health insurance spending for addiction treatment, do some agencies anticipate using their block grants to strategically reallocate funds for treatment, prevention, outreach, administrative costs, or some combination of the above?

Answers to these questions will enhance understanding of the preparedness of the addiction treatment system to undertake the ambitious goals of ACA implementation.

Study Data And Methods

Data were collected as part of the sixth (2013–14) wave of the National Drug Abuse Treatment System Survey, with which the authors were involved to various degrees.21–26 This wave included a ninety-minute Internet-based survey of directors and clinical supervisors at 635 addiction treatment programs. It also included fifteen-minute Internet-based surveys of state representatives from three groups of state agencies involved in implementing addiction treatment–related ACA provisions: Single State Agencies, state Medicaid agencies, and state departments of insurance. All of the surveys of state agencies were distributed in the fifty states and the District of Columbia.

This article focuses on the survey of Single State Agencies. We used a publicly available directory to identify the directors of the fifty-one Single State Agencies in the United States (one for each of the fifty states and one for the District of Columbia).

The ACA establishes new financial incentives to improve coordination between primary care and behavioral health services.

Each director was mailed a packet that contained a description of the Internet-based study and an invitation to participate. The packet also included a letter of support for the study from the National Association of State Alcohol/Drug Abuse Directors.

Five business days after the packets were mailed, all of the directors were contacted by e-mail and given the same information in electronic format. We also sent follow-up e-mail to directors who did not respond to the packet or the initial e-mail. Finally, we followed up by telephone with the directors who did not reply to the follow-up e-mail.

The survey was prepared by and administered with assistance from the Survey Lab at the University of Chicago. Data were collected from November 2013 to July 2014 from Single State Agencies in forty-nine states and the District of Columbia, for a 98 percent response rate.

Key Measures

We measured Single State Agencies’ provision of technical assistance to addiction treatment programs in the following four areas: improving their health IT, enhancing cross–health system collaborations, conducting consumer outreach and enrollment, and achieving insurance certification. Respondents were also asked whether they provided state-only funds—that is, funds other than those received through federal or private grants—to help addiction treatment programs implement provisions of the ACA. Finally, they were asked whether they expected the percentage of block grant funds they devoted to substance abuse prevention, addiction treatment, administrative costs, outreach services, and other activities to decrease, stay the same, or increase after major provisions of the ACA were implemented in 2014.

Limitation

This study is focused on technical assistance to addiction treatment programs provided by Single State Agencies. Therefore, it does not include information about technical assistance provided by other sources, including county governments, state Medicaid agencies, and state-based health insurance Marketplaces. Consequently, our results may not include the full scope of technical assistance received by addiction treatment programs.

Study Results

Technical Assistance And Implementation Resources

The most commonly provided technical assistance reported by Single State Agencies involved facilitating collaboration between addiction treatment programs and other service programs (Exhibit 1). Eighty-eight percent of the agencies reported providing technical assistance for collaborating with mental health programs. Many agencies also reported providing assistance for collaborating with criminal justice–related organizations and for education or training efforts to increase the number of addiction treatment counselors. In addition, more than half of the agencies reported assisting addiction treatment programs in improving their IT or EHR infrastructure, or both; collaborating with other medical programs; collaborating with federally qualified health centers; and obtaining Medicaid certification.

Exhibit 1. Funding For Implementation Of The Affordable Care Act And Technical Assistance Provided By Single State Agencies To Addiction Treatment Programs, By Type Of Assistance, 2013–14.

Exhibit 1

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SOURCE Authors’ analysis of data from the survey of Single State Agencies in the National Drug Abuse Treatment System Survey, 2013–14. NOTES Single State Agencies from the District of Columbia and forty-nine of the fifty states responded to the survey. In-network provider status refers to becoming an approved in-network program for private insurance plans. IT is information technology. FQHC is federally qualified health center.

Because many states have adopted the ACA’s Medicaid expansion or established a state-operated insurance Marketplace, it is surprising that only one in four Single State Agencies reported providing assistance to addiction treatment programs to help with insurance enrollment and outreach to newly eligible groups. A similar percentage of agencies reported helping addiction treatment programs become approved in-network programs with private insurance plans. Only 6 percent reported that they invested state-only funding to help addiction treatment programs prepare for ACA implementation.

As the above data suggest, most Single State Agencies are involved in multiple tasks. Fifty-four percent of them provided six or more types of technical assistance to addiction treatment programs (data not shown).

There are also differences in the level of activity according to the types of services these agencies provide (Exhibit 2). The type of assistance that an agency provided was related to the overall level of activity. Compared to “low-activity” agencies (those involved in 1–5 tasks), significantly more “high-activity” agencies (those involved in 6–9 tasks) provided assistance with obtaining Medicaid certification, all types of collaboration, and training to increase the number of addiction treatment counselors.

Exhibit 2. Technical Assistance Provided By Single State Agencies To Addiction Treatment Programs, By Type Of Assistance And Agency Level Of Activity, 2013–14.

Exhibit 2

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SOURCE Authors’ analysis of data from the survey of Single State Agencies in the National Drug Abuse Treatment System Survey, 2013–14. NOTES Single State Agencies from the District of Columbia and forty-nine of the fifty states responded to the survey. “Low-activity” means 0–5 activities; “high-activity” means 6–9 activities. See text for explanation. In-network provider status refers to becoming an approved in-network program for private insurance plans. Statistical significance denotes differences between high-and low-activity states. T-tests were used to obtain the results. IT is information technology. FQHC is federally qualified health center. **p ≤ 0.05

We examined differences across types of technical assistance provided according to whether or not states supported the ACA insurance expansion. Specifically, we compared agencies in the twenty-six states that had elected to expand Medicaid by the time the survey was administered to agencies in the twenty-four states that had not by that time. We also compared agencies in the twenty-two states that set up their own health insurance Marketplaces to those in the twenty-eight states that defaulted to the federal Marketplace or had state-federal partnerships.

We detected no significant differences between agencies in states that supported the ACA insurance expansion and those in states that did not, in terms of providing assistance to addiction treatment programs for most tasks. Moreover, agencies in states that expanded Medicaid were no more likely to provide a high level of assistance (6–9 tasks) than those in states that did not expand Medicaid. Similarly, agencies in states that created their own state-based Marketplace were no more likely to provide a high level of assistance than those in states that relied on a federal or partnership Marketplace.

One exception to this general finding was the provision of assistance for insurance enrollment and outreach services. As shown in online Appendix Exhibit A1,27 agencies in Medicaid expansion states were more than three times as likely to assist addiction treatment programs in this task, compared to agencies in nonexpansion states (40.0 percent versus 12.5 percent; p = 0.03). In addition, agencies in states that set up their own health insurance Marketplaces were more than four times as likely to assist in insurance enrollment and outreach (46 percent versus 11 percent; p = 0.006), compared to agencies in states using the federal Marketplace or a partnership one.

Three agencies (6 percent) reported that their states used state-only funding to help addiction treatment programs prepare for ACA implementation (Exhibit 1). However, this was not the case in the vast majority of states, regardless of their level of support for the ACA.

Anticipated Allocation Of Block Grants

As shown in Appendix Exhibit A2,27 most Single State Agencies did not anticipate making changes in 2014 in the allocation of Substance Abuse Prevention and Treatment Block Grant funds in response to ACA provisions. Seventy-four percent of the agencies reported no anticipated change in allocation for prevention. The percentages were 66.0 percent for treatment, 59.6 percent for outreach services, and 89.6 percent for administrative costs.

However, agencies in Medicaid expansion states differed significantly from those in nonexpansion states in their anticipated allocation of block grant funds. Agencies in expansion states were more likely than those in nonexpansion states to report that they anticipated increasing block grant funds for prevention (38.5 percent versus 8.3 percent; p = 0.02) and outreach services (57.7 percent versus 19.5 percent; p = 0.007), and decreasing block grant funds for treatment (38.5 percent versus 8.3 percent; p = 0.03).

Similarly, as shown in Appendix Exhibit A3,27 agencies in states with state-run Marketplaces were significantly more likely than agencies in other states to report that they anticipated increasing block grant funds for prevention (45.5 percent versus 7.1 percent; p = 0.003) and outreach services (63.6 percent versus 20.0 percent; p = 0.002), and almost four times as likely to report that they anticipated decreasing funds for treatment (40.9 percent versus 10.7 percent; p = 0.02).

Most Single State Agencies reported providing education and training to increase the number of addiction treatment counselors.

Discussion

Single State Agencies in most states reported providing some level of technical assistance to addiction treatment programs as part of their efforts to implement provisions of the ACA. The most popular forms of assistance were helping addiction treatment programs collaborate with other programs—mental health and medical—and with federally qualified health centers and the criminal justice system. Technical assistance to foster these collaborations may help addiction treatment programs transition to the new more integrated care delivery models encouraged under the ACA.

Most Single State Agencies reported providing education and training to increase the number of addiction treatment counselors. Given the shortages of addiction treatment providers in many parts of the United States and the anticipated increases in demand associated with health reform, expanding the supply of counselors is especially important. Most Single State Agencies are also helping addiction treatment programs build IT infrastructure and obtain Medicaid certification.

These developments are encouraging. However, supports for addiction treatment programs provided by Single State Agencies often fall short of the likely need generated by health reform. For example, although most agencies provide technical assistance to improve collaborations with mental health programs and the criminal justice system, about 40 percent of the agencies do not provide such supports to facilitate collaborations with medical programs or federally qualified health centers. Limited assistance to develop these collaborations will constrain the ACA’s ability to achieve its goals of parity, continuity of care, and integration of substance use services with other forms of medical care.

Moreover, the inability to bill any type of insurance—public or private—is common among addiction treatment programs. Yet nearly half of Single State Agencies do not offer assistance to addiction treatment programs to develop the technological infrastructure required to do so. These challenges are compounded in many states by the absence of laws requiring addiction treatment programs to employ professionally trained staff who meet requirements for insurance reimbursement, and who also have the potential to improve standards of care.5

Helping addiction treatment programs collaborate with other health and social service providers seems to be relatively routine for Single State Agencies: Even the majority of low-activity agencies provide some assistance in this area. Given how widespread these assistance activities are, it might be fruitful for future research to document what Single State Agencies are doing to assist addiction treatment programs with collaboration and to examine its effectiveness.

Assisting addiction treatment programs in IT or EHR development was not related to whether an agency was involved in many or a few activities. This result suggests that more education about the importance of this type of assistance—and, ideally, financial resources to support its development—might push some agencies to increase their technical assistance in this high-need area.

A different pattern emerged for assistance activities directly related to ACA insurance reforms. Only one in four Single State Agencies reported providing assistance in this area—by helping addiction treatment programs either become in-network providers or conduct insurance enrollment and outreach.

This is of particular concern in light of Massachusetts’s recent experience in expanding insurance coverage. Despite new access to publicly funded health insurance in that state, the percentage of uninsured patients with substance use disorders remained high.28 Researchers observed relatively stable use of addiction treatment, with continued barriers to treatment among insured people with substance use disorders. Outreach to both populations will likely play an important role in further expansion of health coverage.

Support for the ACA insurance expansion was significantly associated with whether or not Single State Agencies provided assistance with outreach and enrollment. This finding makes sense from the perspective of state policy preferences. However, it implies that addiction treatment programs in states that did not develop a state-run Marketplace are much less likely to receive insurance-related assistance than programs in states that did, despite significant expansions in private insurance across all states.

Moreover, existing data on the uninsured suggest that those who remain uninsured after the initial enrollment period are the least engaged and least informed consumers of health insurance coverage.29 Little is known regarding knowledge of ACA provisions among people with substance use disorders. However, this group will likely require tailored outreach, enrollment efforts, and linkages with other health and social service programs to meet their service needs.

Finally, only three states—Idaho, Massachusetts, and New York—are allocating state funds to facilitate ACA implementation within the addiction treatment system. The federal government and private foundations are providing almost all of the financial support for helping the addiction treatment system adapt to ACA implementation.

This finding could reflect the general tendency of states to not invest their own funds when they can access federal and other funds instead.30 It may also reflect limited appreciation of the implications of the ACA for state systems for treating substance use disorders. Because the federal technical assistance funds may well be exhausted before all details of ACA implementation are worked out by addiction treatment programs, states could miss opportunities to expand the quantity and quality of services if they under-invest in facilitating the adaptation of addiction treatment to the law.

Single State Agencies in states that have embraced the ACA insurance expansions expect to make significant changes in their future allocation of block grant funds. In particular, agencies in Medicaid expansion states and states that created state-run Marketplaces are significantly more likely to report plans to reallocate block grant funds away from treatment and toward outreach and prevention activities than agencies in states that did not expand Medicaid or create a state-run Marketplace. Such plans are based on a belief that the expanded insurance coverage through the Medicaid expansion and the ACA Marketplaces will increase federal and state funds for addiction treatment and, as a result, allow a greater focus on underfunded prevention and community-based outreach services. One risk is that such shifting of funds on a large scale could undermine the ACA’s goal of expanding access to treatment for particular populations or to services (such as long-term residential care) that may be difficult to finance through Medicaid.

Conclusion

The Affordable Care Act has great potential to improve access to addiction treatment. However, its implementation poses great challenges to the addiction treatment system and to individual addiction treatment programs. Many Single State Agencies are taking advantage of implementation funding from the federal government and private foundations, which focus on increasing infrastructure and providing technical assistance to addiction treatment programs. Since addiction treatment programs face significant implementation challenges in engaging and serving a new population within a rapidly changing financing system, more funder outreach to Single State Agencies should be provided regarding the availability and uses of these funds.

Future research should track whether state agencies follow through with their plans to reallocate block grant funds from treatment to prevention and outreach and should study the effects of such reallocation. Millions of Americans require services to address substance use disorders of all levels of severity. However, millions more require preventive services to reduce their risk of developing these disorders or experiencing substance-related harms. If such a shift to preventive services improves population health, it would be a major accomplishment of health care reform.

Acknowledgments

The research reported in this article was supported by the National Institute on Drug Abuse of the National Institutes of Health (NIH) (Grant No. R01DA034634). The content is solely the responsibility of the authors and does not necessarily represent the official views of the NIH. The authors thank the editors and two anonymous reviewers for their valuable comments and suggestions, staff members at the University of Chicago Survey Lab for their assistance in designing and administering the survey, and the National Association of State Alcohol/Drug Abuse Directors for providing a letter of support for the study. Finally, the authors gratefully acknowledge the assistance of Thomas D’Aunno, Heather Howard, Sara Rosenbaum, Timothy Jost, Farzad Mostashari, and Neva Kaye in reviewing and recommending revisions to the survey instrument.

Contributor Information

Christina Andrews, Email: candrews@mailbox.sc.edu, Social work at the University of South Carolina, in Columbia.

Amanda Abraham, Health policy and management at the University of Georgia, in Athens.

Colleen M. Grogan, Health policy at the University of Chicago, in Illinois.

Harold A. Pollock, Health policy at the University of Chicago.

Clifford Bersamira, Social work at the University of Chicago.

Keith Humphreys, Psychiatry and behavioral sciences at the Veterans Affairs and Stanford University Medical Centers, both in Stanford, California.

Peter Friedmann, Medicine at the Providence Veteran Affairs Medical Center, the Rhode Island Hospital, and the Alpert Medical School of Brown University, all in Providence, Rhode Island.

NOTES

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