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Comment on HHS Reports: Coverage for IMD Services Under Managed Care, and PDMP Best Practices

MACPAC wrote to the chairs and ranking members of the Senate Finance Committee and House Energy and Commerce Committee and the Secretary of the U.S. Department of Health and Human Services commenting on two reports issued recently by the Secretary.

The 21st Century Cures Act (P.L. 114-255) directed the Secretary, acting through the Centers for Medicare & Medicaid Services, to study Medicaid coverage for beneficiaries age 21–64 receiving services in institutions for mental diseases (IMDs) as in-lieu-of services (ILOS) through managed care. While Medicaid generally prohibits payments for services provided to beneficiaries in IMDs, the 2016 managed care rule clarified that states can use federal financial participation to make capitation payments to managed care plans on behalf of non-elderly adults in IMDs in lieu of covered Medicaid services when certain conditions are met.

In the letter, MACPAC observes that the widespread use of the IMD ILOS authority to cover these services is not surprising, given the prevalence of managed care in Medicaid and previously documented gaps in the behavioral health continuum of care in many states. The Commission has previously discussed the role of IMDs in supporting access to inpatient and residential treatment, noting that nearly all states make payments for services in IMDs via various exemptions and authorities, including managed care.

The report fills an important gap by documenting the extent to which states are using the IMD ILOS authority and the different ways that states and plans are operationalizing this flexibility. It also suggests areas where additional information could provide a fuller understanding of the findings and potential lessons learned for states and managed care plans. These include the factors affecting state variation in IMD use, the extent to which beneficiaries have a meaningful choice between IMD and non-IMD settings, and the practice, reported by some states, of disenrolling beneficiaries from managed care to comply with the 2016 managed care rule.

The second part of the letter addresses a report required by the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act (SUPPORT Act, P.L. 115-271), which directed the Secretary, in collaboration with the Centers for Disease Control and Prevention, to report on best practices for the use of prescription drug monitoring programs (PDMPs) and for protecting the privacy of Medicaid beneficiary information in PDMPs. The law also directed the Secretary to develop and publish model practices regarding data sharing agreements between state Medicaid programs and PDMPs.

MACPAC notes that while the report provides valuable information about challenges and opportunities related to the use of PDMPs, it includes limited information on the use of PDMP data in Medicaid due to limitations of available information and the short reporting timeframe. More research and information-sharing on PDMP best practices are needed. As states enhance their PDMPs and gain more experience using them in Medicaid, promising state approaches may emerge. In addition, the Commission notes that states not included in this study may offer insights on best practices that are not captured in this report.