Substance use disorder treatment carve outs in Medicaid managed care

Medicaid managed care organizations (MCO) play a major role in addressing the nation's epidemic of drug overdose and mortality by administering substance use disorder (SUD) treatment benefits for over 50 million Americans. While it is known that some Medicaid MCO plans delegate responsibility for managing SUD treatment benefits to an outside "carve out" entity, the extent and structure of such carve out arrangements are unknown. This is an important gap in knowledge, given that carve outs have been linked to reductions in rates of SUD treatment receipt in several studies. To address this gap, we examined carve out arrangements used by Medicaid MCO plans to administer SUD treatment benefits in ten states.

Data for this study was gleaned using a purposive sampling approach through content analysis of publicly available benefits information (e.g., member handbooks, provider manuals, prescription drug formularies) from 70 comprehensive Medicaid MCO plans in 10 selected states (FL, GA, IL, MD, MI, NH, OH, PA, UT, and WV) active in 2018. Each Medicaid MCO plan's documents were reviewed and coded to indicate whether a range of SUD treatment services (e.g., inpatient treatment, outpatient treatment, residential treatment) and medications were carved out, and if so, to what type of entity (e.g., behavioral health organization).

A large majority of Medicaid MCO plans carved out at least some (28.6 %) or all (40.0 %) SUD treatment services, with nearly all plans carving out some (77.1 %) or all (14.3 %) medications, mainly due to the carving out of methadone treatment. Medicaid MCO plans most commonly carved out SUD treatment services to behavioral health organizations, while most medications were carved out to state Medicaid fee-for-service plans.

Carve out arrangements for SUD treatment vary dramatically across states, across plans, and even within plans. Given that some studies have linked carve out arrangements to reductions in treatment access, their widespread use among Medicaid MCO plans is cause for further consideration by policymakers and other key interest groups. Moreover, reliance on such complex arrangements for administering care may create challenges for enrollees who seek to learn about and access plan benefits.