DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
 
CMCS Informational Bulletin 
 
 
 
DATE:   October 29, 2014 
 
FROM:   Cindy Mann 
Director  
Center for Medicaid and CHIP Services  
 
SUBJECT:   Delivery Opportunities for Individuals with a Substance Use Disorder 
 
The Centers for Medicare and Medicaid Services (CMS) recently launched the Medicaid 
Innovation Accelerator Program (IAP) to improve care, improve health, and reduce costs. The 
IAP will support state efforts to accelerate Medicaid innovation by offering technical assistance 
and other resources to states engaged in these activities. Building on ideas and recommendations 
we have heard from states and stakeholders, the IAP will offer resources to support system 
reform innovations through the development of new delivery models, data analytics, quality 
measurement and rapid-cycle learning and evaluation.  
Based on our work with states and stakeholders, CMS has identified substance use disorders 
(SUD) as an area of focus for IAP efforts. As part of a strategy to improve the care and outcomes 
for individuals with a SUD, CMS invites states to leverage IAP resources to introduce system 
reforms that better identify individuals with a SUD, expand coverage for effective SUD 
treatment, and enhance SUD practices delivered to beneficiaries. 
The purpose of this Informational Bulletin is twofold.  The first part of the Bulletin is intended to 
share areas of focus that states may want to consider as they undertake efforts to improve SUD 
service coverage and delivery.  The second part of the Bulletin is a description of a high-
intensity, data-driven IAP Learning Collaborative centered on SUD system reforms and the 
process for states to express interest in participating in this opportunity. Through this high 
intensity IAP SUD Learning Collaborative, CMS plans to work with states that are committed to 
making changes to their infrastructure, benefit design and delivery systems that are consistent 
with the goals of the IAP.  Participating states will receive individualized technical assistance, 
expertise resources, and peer-based shared learning opportunities to improve the care provided to 
treat individuals with a SUD. The goal is for this high intensity IAP Learning Collaborative to 
support states to better use: 
  Evidence-based benefit designs to improve care for individuals with a SUD; 
  Unified measures to learn, share lessons and drive quality improvements; and 
  Data analytics to size and identify solutions for pressing problems, such as high-cost 
populations and prescription drug abuse. 
  CMCS Informational Bulletin  Page 2 
Some states may not want to engage in this high-intensity process, either because they have 
already made substantial changes to their delivery systems for individuals with a SUD or because 
they do not currently have the resources to undertake major delivery system transformations in 
this area.  CMS welcomes the opportunity to work with these states through the IAP platform as 
well. In Part II of this Informational Bulletin, we solicit feedback from all states on their needs 
and interest in our next steps on SUD-focused technical assistance. Based on the input we 
receive, CMS will offer additional IAP opportunities for these states to leverage as SUD 
strategies. 
 
Part I: Characteristics of a Transformed System of Care 
 
Medicaid is playing an increasingly important role as a payer of services for individuals with a 
SUD in the United States. Nearly 12 percent of Medicaid beneficiaries over 18 have a SUD.1  In 
addition, 15 percent of uninsured newly eligible individuals have a SUD.2  CMS is committed to 
helping states effectively serve these individuals. Current federal policies and programs support 
states efforts to reform their service delivery systems in different ways, especially for 
individuals with disabilities and chronic health conditions.  
 
States have already achieved notable success in improved care and lower costs for SUD services 
through benefit, practice and payment reform. For instance: 
 
  A Medicaid contracting health plan experienced medical costs for Medicaid patients that 
decreased by one-third over three years following engagement in medication-assisted 
treatment (MAT). This includes reduced expenditures in all types of health care settings, 
including hospitals, emergency departments and outpatient clinics.3 
  Massachusetts found that monthly Medicaid expenditures were significantly less for 
beneficiaries receiving SUD treatment compared to diagnosed but untreated beneficiaries. 
Treatment included ambulatory detoxification and MAT services.4  
  Washington found that Screening, Brief Intervention and Referral to Treatment (SBIRT) 
services significantly reduced healthcare costs among Medicaid beneficiaries, resulting in 
savings of $250 per member per month associated with inpatient hospitalization from 
emergency department admissions.5 
  In addition, Washington tackled SUD and emergency department (ED) usage by adopting 
seven best practices. As a result, ED visits decreased by 9.9%; the number of people with 
                                                           
1 http://store.samhsa.gov/shin/content/SMA13-4757/SMA13-4757.pdf, p.10 
2 Busch, S, et al (2013). Characteristics of Adults with Substance Use Disorders Expected to be Eligible for 
Medicaid under the ACA. Psychiatry Services, 64(6). 
3 Walter, L. et al (2006). Medicaid Chemical Dependency Patients in a Commercial Health Plan, Robert Wood 
Johnson Foundation, Princeton, New Jersey, 2006. 
4 Clark, R.E., et al (2011)  The Evidence Doesnt Justify Steps by State Medicaid Programs to Restrict Opioid 
Addiction Treatment with Buprenorphine. Health Affairs, 30(9), 1425-1433. 
5 Estee, S et al. Medicaid Cost Outcomes. Department of Social and Health Services, Research and Data Analysis 
Division. Olympia, Washington, 2006.  CMCS Informational Bulletin  Page 3 
frequent ED use dropped by 10.7%; and the number of visits resulting in narcotic 
prescriptions dropped by 24%. The state attributed savings of about $34 million.6 
  A large health plan found that total healthcare costs, including inpatient, ED, outpatient, 
ambulatory and pharmacy costs, were 30% less for alcohol-dependent individuals 
receiving MAT than for alcohol-dependent individuals not receiving MAT.7 
While progress has been made, states continue to report challenges in achieving better care for 
the SUD population. States cite a lack of data analytics to accurately identify prevalence and 
need in the Medicaid population, difficulties in integrating primary and mental health care, too 
few endorsed metrics for quality measurement, a lack of resources to collect and evaluate data, 
variation in provider qualifications, and federal payment prohibitions as barriers to providing a 
comprehensive benefit package and delivery system. We are committed to supporting state 
efforts to address these challenges through the IAP SUD Learning Collaborative. 
  
A health care system capable of successfully treating SUD should include a robust benefit 
package of evidence-based services, fidelity to industry standard levels of care, integration with 
primary care, smart use of data analytics and metrics, collaboration with the SUD Single State 
Agency, provision of recovery services and supports, and a strong commitment from leadership 
designating SUD system transformation as a priority focus area.  
 
Based on conversations with partners, including the Substance Abuse and Mental Health 
Services Administration (SAMHSA), we have identified the following characteristics of 
transformed systems of care that states are building to treat individuals with a SUD: 
 
  A comprehensive benefit design covering vital evidence-based treatment and best 
practices; 
  Care standards in line with nationally accepted criteria for medical necessity and levels of 
care, such as those developed by the American Society of Addiction Medicine; 
  Care coordination, with a focus on care transitions among levels of SUD and acute care; 
  Integration with primary care and physical health, through such approaches as health 
homes, integrated care models, and primary care medical homes; 
  Efforts to improve sharing of information among providers while complying with the 
necessary state and federal confidentiality requirements;  
  A strategy to curb prescription drug abuse; 
  A strategy to identify and treat SUD in the youth and adolescent population; 
  The ability to collect, use and report the relevant Medicaid Adult Core and Child Core 
quality measures, in addition to other measures; 
  The ability to conduct data analytics on an ongoing basis; and 
  A strategy to enhance business operations of SUD providers to ensure program integrity.  
 
                                                           
6 Washington State Health Care Authority, Report to the Legislature: Emergency Department Utilization: Update on 
Assumed Savings from Best Practices Implementation, March 20, 2014. At 
http://www.hca.wa.gov/Documents/EmergencyDeptUtilization.pdf  
7 Baser, O., Chalk, M. Rawson, R. et al. (2001) Alcohol treatment dependence: comprehensive healthcare costs, 
utilization outcomes, and pharmacotherapy persistence.  The American Journal of Managed Care, 178(8), S222-
234.  CMCS Informational Bulletin  Page 4 
There are a number of pathways available to states to pursue delivery system reform and 
improve coverage for individuals with a SUD, including:  
 
  1945 Health Homes for Enrollees with Chronic Conditions8 
  Integrated Care Models 
  1915(i) Home and Community-Based Services 
  1915(b) Managed Care options 
  1905(a) State Plan authority 
  1937 Alternative Benefit Plan 
 
In general, these existing Medicaid authorities provide states the flexibility necessary to 
implement their desired reforms.  However, there may be instances when states may want to 
consider a section 1115 demonstration waiver.  As you know, section 1115 allows the Secretary 
of Health and Human Services to waive certain statutory provisions that permit states to test 
innovative policy and delivery approaches, including for individuals with a SUD, including those 
targeted to select populations or geographic areas. Section 1115 demonstrations may be designed 
to provide more effective treatment of SUD by allowing states to cover services normally 
prohibited by federal statute, such as short-term acute treatment for SUD, which may include 
some residential and/or inpatient services. CMS is developing additional guidance on section 
1115 SUD policy (which will be released in a forthcoming publication) for a limited number of 
proposals to address comprehensive SUD system transformation, ensuring integrated and 
community-based care. 
 
Part II:  Expressing Interest in the IAP SUD Learning Collaborative 
 
As indicated previously through the launch of the IAP, CMS is interested in working with states 
that will exercise strong leadership and commit to meaningful delivery system reforms. CMS 
invites states that are interested in significantly improving their delivery system for individuals 
with a SUD to participate in a new IAP SUD Learning Collaborative (LC). We ask that the state 
Medicaid agency or Governors office submit the Expression of Interest form provided at the end 
of this Bulletin (the form is also available on the IAP page on Medicaid.gov). Specifically, we 
seek to partner with states that express a significant interest and readiness to devote the necessary 
staff and technical resources to produce and share data analytics and programmatic progress with 
other states participating in the Learning Collaborative. We encourage states interested in 
participating in the LC to include staff with policy and data proficiency, as well as staff from the 
Single State Agency for substance abuse disorders.  While states may vary in their initial 
readiness, we are asking states to express a commitment to invest the resources necessary to 
collect and analyze data during the learning collaborative. 
 
The LC will provide resources that we hope will enable states to introduce the necessary policy 
and infrastructure changes that effectively treat SUD as a primary, chronic disease requiring 
                                                           
8 Several states have already pursued SUD opportunities using Section 1945 authority. For example, Rhode Island 
received approval for a health home model serving opioid dependent Medicaid beneficiaries. The Rhode Island 
health home model supports stronger, formalized relationships between opioid treatment providers and community 
healthcare providers. In Vermont, the Hub and Spoke health home model provides a targeted approach for the 
spectrum of opioid dependent beneficiaries, and includes physician training for buprenorphine treatment.   CMCS Informational Bulletin  Page 5 
long-term treatment to achieve abstinence or low recurrence of relapse. CMS will work with 
states in the high-intensity LC designed to meet the particular needs of participating states, 
aiming to address the policy and data levers that represent a truly transformed system. The high-
intensity LC will consist of monthly peer-based learning sessions designed to facilitate the 
spread of successful reforms. These learning sessions will also include bimonthly deep dive 
webinars featuring policy, data and industry leaders addressing the focus areas identified above 
as well as topics suggested by participating states. The content and schedule of the learning 
sessions will be specifically tailored to meet the needs of participating states. On alternating 
months, learning collaborative states can tap into shared experience through facilitated peer-
based forums designed to identify common challenges and showcase solutions. The goal is to 
disseminate proven strategies and to identify pockets of success in overcoming state-specific 
barriers. 
 
For states that commit to producing the necessary policy, program and payment reforms to 
improve their systems of care for individuals with a SUD, CMS will provide expert resource 
documents and hands-on technical assistance appropriate for a robust delivery design.  These 
resources will include materials on federal pathways, strength of evidence of SUD interventions 
for the Medicaid population, data analytics, other payers use of metrics, ongoing lessons learned 
as interventions progress, and other topics. For instance, through the new IAP resources, states 
could develop an approach to identify individuals with a SUD in the Medicaid population, 
perform the necessary data analytics to develop or refine their benefit package, and use quality 
metrics to evaluate the success of these changes.  This work could focus on the overall Medicaid 
population with a SUD or target individuals that have SUD and are high users of health care 
(including SUD treatment) services.  Data collection and analysis activities could also include a 
needs assessment of the Medicaid population with a SUD and an assessment of the provider 
network capacity to address these needs.  This gap analysis could assist states in better targeting 
efforts to enhance access to services.   
 
Through the LC, CMS will support states in navigating the appropriate federal pathways to 
successfully redesign their systems and implement desired reforms.  High-intensity LC states 
will have access to individualized technical assistance from CMS and strategic partners on an 
ongoing and real-time basis. The technical assistance available through the LC will be designed 
to support states as they lay the groundwork and prepare to submit successful SPAs and waivers 
necessary to introduce and achieve key reforms.   
 
As part of their work in the high-intensity IAP SUD Learning Collaborative, participating states 
will develop a work plan that will outline and describe their state-specific ideas for system 
reforms. In consultation with CMS, states will identify an appropriate strategy for introducing 
coverage, delivery, data and policy reforms necessary for improving care provided to treat 
individuals with a SUD in their state. The work plan can serve as a blueprint for transformation, 
guiding each states participation in the IAP SUD Learning Collaborative. 
 
To learn more about states areas of interest and levels of readiness, CMS will hold one-on-one 
discussions with states interested in participating in the high-intensity LC during the month of 
November. Our hope is that these conversations will help inform the LCs curriculum and serve 
as a starting point for states to develop their work plans. Please fill out the Expression of Interest  CMCS Informational Bulletin  Page 6 
form and email it to  MedicaidIAP@cms.hhs.gov with SUD LC in the subject line no later 
than November 21, 2014. 
 
Additional IAP Opportunities for Substance Use Disorder 
 
For states that may choose not to participate in this high intensity LC, there are opportunities for 
other forms of technical assistance with the aim of improving services for individuals with a 
SUD.  Over the next several months, CMS will be actively soliciting feedback from states to 
identify and develop additional opportunities for states interested in SUD. If your state is 
interested in receiving technical assistance in other areas of focus related to SUD benefits and 
delivery, please email MedicaidIAP@cms.hhs.gov. In the email, please describe your states 
needs and areas of interest as they relate to the system of care for SUD services.  In addition, 
CMS is committed to disseminating materials and lessons learned from early efforts, so all states 
can learn and benefit from the experience of the IAP SUD learning collaborative work.  
 
Substance Use Disorder High-Intensity Learning Collaborative  
Expression of Interest 
 
 
State/Territory:  
[Insert a brief description of what your state wants to achieve through participating in 
this learning collaborative. As part of this description, you can include information such 
as specific topic areas you want to focus on, the types of data analysis your team would 
like to do, etc.]   
 
 
Team Members  Name and Contact Information 
Medicaid lead*   
Data lead   
SSA for Substance   
Use Disorder lead 
Other potential   
stakeholders for team 
(e.g., health plans, 
provider groups) 
*Please identify a single point-of-contact 
 
Please email this form to MedicaidIAP@cms.hhs.gov with SUD LC in the subject line no later 
than November 21, 2014.  Please provide the name and contact information for the representative 
from the Medicaid agency that will be the primary point of contact for the Learning 
Collaborative.