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NIDA News Release Contact: Beverly Jackson
Michelle Muth
FOR RELEASE, October 24, 2000

Access to Substance Abuse Treatment for Medicaid Clients Improves With Oregon Model for Financing Treatment Under Managed Care

Researchers at the Oregon Health Sciences University found that implementation of a capitated substance abuse benefit appeared to increase access to related services for state Medicaid clients in Oregon. This single benefit broadened the array of covered substance abuse treatment services formerly offered Medicaid patients, and improved integration of health care services among providers. The research was funded by the National Institute on Drug Abuse (NIDA) and the Institute on Alcohol Abuse and Alcoholism, both of the National Institutes of Health, and the Center for Substance Abuse Treatment, Substance Abuse and Mental Health Services Administration. The research team was led by Dr. Bentson H. McFarland of the Oregon Health Sciences University and Dr. Dennis D. Deck of RMC Research Corporation. The study will be published in the October 25 issue of the Journal of the American Medical Association.

"The Oregon approach markedly altered the state's organization and financing of drug addiction treatment services," says Dr. Alan I. Leshner, director of NIDA. "As a result of appropriate organizational and functional arrangements, access to services was improved for many more Medicaid clients in Oregon." Access rates for clients admitted to substance abuse treatment increased from 5.5 percent under fee-for-service in 1994 to 7.7 percent under the capitated system in 1997.

In the early 1990s, as Medicaid programs began to be converted from fee-for-service to managed care, Oregon officials moved to expand Medicaid coverage while controlling rising health care costs. In 1994, the state expanded Medicaid eligibility. In 1995, a capitated substance abuse treatment benefit was added to improve integration of substance abuse treatment with other health care. Oregon also increased capitation payments to encourage primary care providers to screen their patients for substance abuse disorders.

The research team looked at the impact of managed care financing on access to substance abuse services for state Medicaid clients. Specifically, these access rates applied to treatment clients aged 12-64, served by various managed care systems. The study period began in 1994, to reflect the expansions made to Medicaid eligibility prior to capitation of substance abuse services; and ran through 1998, to reflect the added impact of the implementation and maturation of the substance abuse benefit.

Client and operating characteristics were significant predictors of access to substance abuse treatment. Data from 1997 show that adults and welfare clients were more than twice as likely to access treatment than adolescents and disabled clients, respectively. Males were more likely than females, whites were less likely than non-whites, and urban clients more likely than rural clients to access treatment.

The highest access rate in 1997 was achieved by a managed care plan that conducted extensive outreach among potential clients; routinely screened for substance abuse; and maintained strong ties with social service providers in the metropolitan area it served. Clients were more likely to access treatment through plans that used modified fee-for-service system or subcapitation plans, compared with those in plans using case rates.

In summary, this study suggests that appropriate financial and organizational arrangements facilitate access to substance abuse treatment. The Oregon experience may serve as a useful model for other states looking at ways to improve access to substance abuse treatment services for Medicaid clients.

The National Institute on Drug Abuse is a component of the National Institutes of Health, U.S. Department of Health and Human Services. NIDA supports more than 85 percent of the world's research on the health aspects of drug abuse and addiction. The Institute carries out a large variety of programs to ensure the rapid dissemination of research information and its implementation in policy and practice. Fact sheets on the health effects of drugs of abuse and other topics can be ordered free of charge in English and Spanish by calling NIDA Infofax at 1-888-NIH-NIDA (644-6432) or 1-888-TTY-NIDA (889-6432) for the deaf. These fact sheets and further information on NIDA research and other activities can be found on the Home page at

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