The impact of cost containment on alcohol and drug treatment

Hospitals offering alcohol and drug treatment programs that meet certain criteria are currently exempt from Medicare's prospective payment system, which was introduced in October 1983 as a means of containing medical costs. Substance abuse experts have successfully lobbied for changes in the alcohol and drug diagnosis-related groups (DRGs) on which reimbursement is based so that they now more accurately reflect patterns of inpatient detoxification and rehabilitation. However, major adjustments are still necessary to protect the quality of care and financial diversity of substance abuse treatment programs. Differences in types of treatment facilities must be considered in order to prevent a major redistribution of funds away from facilities offering specialized care. Incentives to reduce costs must be balanced with a determination to maintain high-quality care.