Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

JUNE GIBBS BROWN 

Inspector General 

NOVEMBER 1998 

OEI-07-97-00270 

Follow-up to Detoxification Services For 

Medicaid Beneficiaries 
OFFICE OF INSPECTOR GENERAL 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 

protect the integrity of the Department of Health and Human Services programs as well as the 

health and welfare of beneficiaries served by them. This statutory mission is carried out through a 

nationwide program of audits, investigations, inspections, sanctions, and fraud alerts. The 

Inspector General informs the Secretary of program and management problems and recommends 

legislative, regulatory, and operational approaches to correct them. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 

Inspector General. It conducts short-term management and program evaluations (called 

inspections) that focus on issues of concern to the Department, the Congress, and the public. The 

inspection reports provide findings and recommendations on the efficiency, vulnerability, and 

effectiveness of departmental programs. 

OEI's Kansas City regional office prepared this report under the direction of James H. Wolf, 

Regional Inspector General. Principal OEI staff included: 

REGION 

Dennis Tharp, Project Leader

Tim Dold

Perry Seaton

Hugh Owens

Michael Barrett

Linda Paddock

HEADQUARTERS

Elise Stein, Program Specialist

To obtain copies of this report, please call the Kansas City Regional Office at (816) 426-3697 

Reports are also available on the World Wide Web at our home page address: 

http://www.dhhs.gov/progorg/oei 
EXECUTIVE SUMMARY

PURPOSE 

To assess whether Medicaid and other State programs provide linkages for patient services 

between substance abuse detoxification and follow-up treatment programs. 

BACKGROUND 

Detoxification and substance abuse treatment are funded federally by the Health Care Financing 

Administration (HCFA) and the Substance Abuse and Mental Health Services Administration 

(SAMHSA). Annually, the SAMHSA spends over $1.5 billion on substance abuse prevention and 

treatment services. In addition, HCFA covers substance abuse detoxification and treatment in 

most State Medicaid programs. 

Substance abuse detoxification is the process through which a person who is physically dependent 

on alcohol, illegal drugs, prescription medications, or a combination of these is withdrawn from 

the drugs of dependence. Detoxification, the vital first step of the rehabilitative process, has 

moved in some States from inpatient hospitalization settings to outpatient programs. However, 

many treatment professionals expressed concerns that individuals enrolled in detoxification 

programs may not receive follow-up substance abuse treatment. 

We obtained information on detoxification and treatment programs through a mail survey to each 

Medicaid State agency. Analysis was conducted and follow-up contacts were made to clarify 

responses and to obtain additional information based on survey data. 

FINDINGS 

Fifteen States Report Having Formal Processes Providing Transition from Substance Abuse 

Detoxification to Treatment; Thirty-two have Informal Processes 

Fifteen States said they had written language addressing continuum of care in their Medicaid State 

plan, Medicaid managed care contract, or the State’s quality assurance plan. Thirty-two of 35 

remaining States report having informal processes to provide a transition for Medicaid 

beneficiaries to move from substance abuse detoxification to substance abuse treatment programs. 

Also, States without Medicaid-funded detoxification programs coordinate arrangements with 

other treatment entities outside the Medicaid program to facilitate a continuum of care. 

States Tailor Substance Abuse Programs to Complement Their Own Service Delivery Systems 

Substance abuse programs have evolved over the years into very State-specific oriented activities, 

with State directors of alcohol and drug abuse services choosing programs that they believe 

function optimally in their own particular State. States utilize a variety of treatment settings and 

types of staff in their Medicaid substance abuse programs to ensure that integrated systems of 

care exist for Medicaid beneficiaries in their State. 

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i 
States Have Limited Data on Detoxification and Treatment Activity and Outcomes 

We found that States vary in their capturing of quality and performance data. Over three-fourth’s 

of the States could not provide data on the average time elapsed for Medicaid beneficiaries from 

discharge from a detoxification program to onset of treatment. As a result, States which do not 

capture information on continuum of care linkages have little basis to assess whether beneficiaries 

are receiving timely treatment services. 

One-Third of States Conduct Performance Monitoring of Substance Abuse Programs 

Sixteen States report having performance oversight efforts which include case record reviews and 

site visits. Also, some managed care programs include performance requirements as part of their 

quality assurance plans. 

States Seldom Use Outpatient Settings for Detoxification Services 

Only 30 percent of States employ an outpatient component for detoxification services. Five 

States utilize a Medicaid outpatient detoxification component on a primary basis while another 10 

States use outpatient detoxification services on an alternative or less-extensive basis. In contrast, 

40 States cover Medicaid outpatient treatment programs, and 33 States have inpatient treatment 

programs available. Half of the States cover both Medicaid inpatient and outpatient treatment 

programs. 

RECOMMENDATION 

SAMHSA and HCFA Should Work With States to Develop Appropriate Performance 

Measures 

The SAMHSA should work with State agencies to develop performance indicators that measure 

linkages from substance abuse detoxification to treatment. We believe this will help ensure that 

linkages and coordination are a priority for improvement, and that Medicaid beneficiaries are not 

merely engaging in detoxification without treatment. 

The SAMHSA and HCFA should collaborate and encourage State Medicaid agencies to include 

language regarding continuity of substance abuse services in their managed care contracts. 

The SAMHSA and HCFA also should work with States to facilitate enhanced data collection on 

the continuum of care. Such treatment and outcome data are essential to capture information on 

what is occurring in the treatment field. This will enable reasonable conclusions to be drawn to 

enhance the quality of existing programs. 

AGENCY COMMENTS 

Both HCFA and SAMHSA concurred with our recommendation but emphasized they cannot 

ensure that States meet goals and provide treatment and outcome data. However, they expressed 

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ii 
a willingness to work with States in these efforts and toward greater continuity for treatment care 

following detoxification services. 

The SAMHSA also suggested exploring mechanisms for shifting to greater use of outpatient 

detoxification services which have been shown to be as safe and effective as, and more cost 

efficient than, inpatient detoxification. We agree this issue is important and warrants further 

examination. However, while our report contains a finding on the uneven use of this service 

among the States, our study was not sufficient to draw conclusions on outpatient detoxification 

safety and efficiency. 

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iii 
TABLE OF CONTENTS

PAGE 

EXECUTIVE SUMMARY 

INTRODUCTION .......................................................... 1

FINDINGS ................................................................ 4

Fifteen States Report Formal Processes from Detoxification to Treatment;

Thirty-two have Informal Processes ......................................... 4

States Tailor Programs to Complement Their Own Service Delivery Systems ........... 5

States Have Limited Data on Detoxification and Treatment ......................... 8

One-Third of States Conduct Performance Monitoring ............................ 9

States Seldom Use Outpatient Settings for Detoxification .......................... 9

RECOMMENDATION ...................................................... 11

COMMENTS ON THE DRAFT REPORT . . ..................................... 11

ENDNOTES .............................................................. 12

APPENDICES 

A: Data on Program Features and Services ................................... A-1

B: Services Linkages .................................................... B-1

C: Types of Care in State Medicaid Programs ................................. C-1

D: Types of Detoxification Services Reimbursed by Medicaid ..................... D-1

E: Text of HCFA and SAMHSA Comments .................................. E-1
INTRODUCTION

PURPOSE 

To assess whether Medicaid and other State programs provide linkages for patient services 

between substance abuse detoxification and follow-up treatment programs. 

BACKGROUND 

Detoxification and substance abuse treatment are funded federally by the Health Care Financing 

Administration (HCFA) and the Substance Abuse and Mental Health Services Administration 

(SAMHSA). Annually, the SAMHSA spends over $1.5 billion on substance abuse prevention and 

treatment services. In addition, HCFA covers substance abuse detoxification and treatment in 

most State Medicaid programs. 

Substance abuse detoxification is the process through which a person who is physically dependent 

on alcohol, illegal drugs, prescription medications, or a combination of these is withdrawn from 

the drugs of dependence. Detoxification, the vital first step of the rehabilitative process, is 

basically a mere stabilization of physiological functions. The treatment process or treatment phase 

of substance abuse services is perhaps the most critical determinant of a Medicaid beneficiary’s 

success. Substance abuse and mental health professionals believe that a treatment program should 

be undertaken subsequent to detoxification to assist the beneficiary in making the transition from 

addiction to recovery, to prevent relapses, and promote healthy alternative living skills for 

Medicaid beneficiaries to more effectively deal with their addictions. 

States utilize a combination of Medicaid fee for service and managed care programs in 

administering their inpatient and outpatient detoxification and treatment programs. Forty States 

still utilize a Medicaid fee for service program to reimburse for substance abuse detoxification 

services. Ten States have a Section 1915b behavioral health waiver to specifically treat the 

substance abuse population. Such waivers strictly deal with only a small subset of a State’s 

Medicaid population. Also, 28 States currently have a Medicaid managed care program in place 

for substance abuse detoxification services (see Appendix A). 

A review of the “SAMHSA Managed Care Tracking System: State Profiles on Public Sector 

Managed Behavioral Healthcare and Other Reforms” (July 1997) and various State Alcohol and 

Drug Rehabilitative Services manuals suggests that treatment services are a logical, integrated 

component of a continuum of substance abuse services offered to Medicaid beneficiaries in some 

States. However, in other States, detoxification services and treatment services are distinctly 

separate programs. Within these States, Medicaid beneficiaries may not receive substance abuse 

treatment or may not receive such treatment services in a timely manner following discharge from 

a detoxification program. 

Treatment journals such as Psychiatric Services1

 and the American Journal of Public Health2 

emphasize the critical importance of substance abusers receiving immediate, follow-up treatment 

services. If Medicaid beneficiaries are not linked into a treatment program right away, the 

beneficiary may abandon the recovery effort. For example, Medicaid beneficiaries often present 

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1 
other problems in addition to their dependence on drugs or alcohol. The Medicaid substance 

abuser may be having difficulties in the areas of employment, and medical and psychiatric health 

as well. The presence of these factors often complicates the provision of substance abuse 

treatment, and other problems, if left unattended, can provoke a relapse to substance use or abuse 

even among well-motivated, abstinent individuals. Therefore, the provision of treatment services 

is seen as vitally important both for the purpose of retaining beneficiaries in a treatment program 

and for reducing the risk of a relapse. 

Coordinating continuum of care poses a challenge in the delivery of adequate and appropriate 

substance abuse services to Medicaid beneficiaries. In addition, States are increasingly relying on 

managed care plans to provide behavioral health services to Medicaid populations which include 

vulnerable beneficiaries who may have special health problems.3 Some States are also attempting 

to “carve-out” certain populations or services from mainstream managed care plans moving them 

toward other systems of care offering specialized services for individuals with particular 

conditions. 

Provision of Medicaid services by managed care organizations is relatively new in the delivery of 

health care, especially in the field of substance abuse. To ensure accountability within Medicaid 

managed care contracts and State plans, some States have adopted specific provisions to describe 

substance abuse activities and services which are guaranteed to be provided as a condition of the 

contract or plan. However, there are no requirements mandated by the Medicaid program on 

continuum of care or linkage from detoxification to treatment. 

METHODOLOGY 

We mailed surveys to each Medicaid State agency to determine whether State Medicaid programs

provide for substance abuse treatment following detoxification programs. The surveys were

completed by State agency-designated respondents from various disciplines. Many States

coordinated a comprehensive response by assembling appropriate individuals from the State

Medicaid health care policy division, State department or bureau of alcohol and drug treatment

services, and a managed care division representative. Follow-up contacts were made with both

Medicaid State agencies and alcohol and drug treatment professionals for the States to clarify

responses and to obtain additional information from the 35 States that initially indicated that they

had no formal continuum of care from detoxification to treatment within their State Medicaid

coverage policies.

We collected information on the following topics: types of detoxification and treatment programs

reimbursed by Medicaid; settings and staff involved in substance abuse programs; managed care

and Medicaid fee for service; linkage of services from detoxification to treatment; traditional

hospital-based inpatient programs versus outpatient programs; waivers and

“carve-out” programs; recidivism; admission and treatment data; program expenditures; and

future programmatic concerns.

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2 
We asked States whether their substance abuse detoxification programs are provided by a 

Medicaid managed care contract, and if so, whether the contract specifies that treatment follows 

detoxification. We did not request nor review specific contracts. We asked States to list and 

define performance indicators that apply to their States’ detoxification and treatment programs. 

We requested States to identify managed care providers of detoxification and treatment services, 

recidivism data, and Medicaid expenses for various drug categories. In order to determine types 

of detoxification services reimbursed by the State Medicaid agencies, we had States select 

placement settings based upon the American Society of Addiction Medicine (ASAM) criteria. We 

obtained information based on the five generally accepted categories of patient placement criteria 

promoted by ASAM. 

We analyzed information from a compiled survey database to determine whether State Medicaid 

programs, especially those that contract with managed care organizations, have specific 

provisions for detoxification and for follow-up substance abuse treatment. We also determined if 

they are incorporating substance abuse detoxification and treatment issues into writing their 

managed care contracts. Since we did not review medical treatment records, we did not draw any 

conclusions regarding quality of care of Medicaid recipients in the States’ substance abuse 

programs. 

We also conducted onsite visits in two States that offer detoxification services on an outpatient 

basis to obtain in-depth material on their detoxification programs, treatment, and coverage 

policies and processes. We met with directors of family services, directors of mental health and 

substance abuse departments, Medicaid policy staff, Medicaid program chiefs, managed care 

representatives, and directors of State bureaus of alcohol and drug treatment services. 

We conducted our review in accordance with the Quality Standards for Inspections issued by 

the President’s Council on Integrity and Efficiency. 

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3 
FINDINGS

Fifteen States Report Having Formal Processes Providing Transition from Substance Abuse 

Detoxification to Treatment; Thirty-two have Informal Processes 

Fifteen States said they had written language addressing continuum of care in their Medicaid State 

plan, Medicaid managed care contract, State’s quality assurance plan or within other formal 

agreements among State entities (See Appendix B). Ten of the 15 States employ Medicaid 

managed care as part of their substance abuse detoxification programs. 

Since only 15 States initially reported formal linkage or transition policies to assure continuation 

of services from detoxification to treatment, we re-contacted the remaining 35 States to determine 

the level of their coordination efforts. While only 15 States had formal processes to provide a 

transition for Medicaid beneficiaries in moving from substance abuse detoxification programs to 

treatment services, 32 of the 35 remaining States report having informal processes at various 

levels in local communities to facilitate the transition from detoxification programs to treatment 

programs. 

Detoxification programs often refer Medicaid beneficiaries to available treatment services 

programs in the State. States report that the referral to treatment programs is primarily made 

before discharge from the detoxification facility. States also reported that such linkages to 

treatment are immediate if there are treatment center slots available at the time. Moreover, in 

some States, the treatment is part of a comprehensive plan of care (including both detoxification 

and treatment), and the Medicaid beneficiary is immediately transferred to the appropriate 

treatment program. 

Treatment services can be provided at an inpatient treatment center, a community mental health 

center, a psychiatric center, residential center, or a community based health organization. 

Depending upon the assessment of the Medicaid beneficiary, it may be determined that the person 

should be seen by a psychologist or licensed clinical social worker. Therefore, a beneficiary might 

see a mental health professional (e.g., a psychologist) in addition to treatment at an outpatient 

clinic. 

Most States have Medicaid covered detoxification and treatment programs (See Appendix C). 

However, in States such as Minnesota and Kansas where Medicaid does not cover substance 

abuse detoxification services, they use a variety of options. For example, Minnesota counties are 

required to arrange for the provision of detoxification services for anyone who requires them. 

Local funds pay for detoxification services with State funds paying for some transportation costs. 

In Kansas, community-based detoxification services are provided, but are not paid by Medicaid. 

Other funding mechanisms which States utilize for substance abuse services include SAMHSA 

treatment grants, community development block grants, and State general assistance and local 

monies to treat the Medicaid population. 

Also, States without Medicaid-funded detoxification programs coordinate arrangements with 

other entities outside the Medicaid program to facilitate a continuum of care from detoxification 

programs to treatment programs. This is not an obstacle for Minnesota or Kansas. In both these 

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4 
States, planning for the treatment begins well before the beneficiary completes detoxification. 

Twenty of the 35 States re-contacted mentioned community-based, local, or State-sponsored 

treatment programs available in locations throughout their State. Two-third’s of these States 

reported “timely” or immediate linkage to treatment, with no interruption of services. They 

emphasized that the beneficiary must be compliant, noting that there is nothing they can do to 

change a beneficiary’s will or decision to abstain from entering treatment. However, 7 of the 

32 States having informal detoxification to treatment linkage processes expressed concerns about 

fragmented services in their State, or that their State has had difficulty in the past in coordinating 

a full range of services (from detoxification to treatment). 

States Tailor Substance Abuse Programs to Complement Their Own Service Delivery Systems 

We found that detoxification programs within the States vary widely. Each have evolved over the 

years into very State-specific oriented activities. These programs also differ widely in 

composition, with some programmatic changes occurring over the last few years to the States’ 

current configurations of inpatient and outpatient programs. There has been a general movement 

towards outpatient settings for substance abuse programs, especially intensive outpatient 

treatment programs. In addition, some States are moving toward outpatient detoxification 

services, sometimes as part of a managed care initiative. However, inpatient detoxification 

services are more common. 

State bureaus of alcohol and drug abuse services oversee the coordination of substance abuse 

detoxification and treatment programs within and outside of State Medicaid programs. Each 

State has developed functional working relationships among various substance abuse treatment 

providers and programs, despite application of different funding sources for programs. State 

directors of alcohol and drug abuse services choose programs that they believe function optimally 

in their own particular State. Substance abuse treatment and addiction professionals use 

resources as efficiently as possible, given the constraints of various funding streams and the often 

scattered programs that exist throughout many States. 

Also, State bureaus provide technical assistance to local programs and oversee the delivery of 

diverse treatment programs at urban and rural locations. Each provide interpretation of level of 

care distinctions, assist substance abuse detoxification and treatment program providers in 

determining approved reimbursement rates for the various levels of care, and may publish 

administrative informational bulletins to clarify State policies and provisions. 

State bureaus may assist treatment programs in determining appropriate level of care settings for 

Medicaid beneficiaries who also have a mental illness. Each help to ensure that integrated systems 

of care exist for all Medicaid recipients in their State, regardless of a beneficiary’s particular 

substance of abuse or co-occurring health or mental health problems. Bureaus may also become 

involved in transportation and access to services issues, and certification or approval of certain 

treatment programs reviewed during their on-site visits. 

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5 
As noted in Table 1 below, States utilize a variety of treatment settings for their State Medicaid 

detoxification programs. More than half of the States indicated that both acute care hospitals and 

inpatient psychiatric hospitals are the most common settings. 

Table 1 

TYPES OF TREATMENT SETTINGS 

No. Of Medicaid 

Programs using 

each setting 

Type of Setting of Medicaid 

Detox Programs 

28 Acute care general hospital 

27 

Psychiatric hospital 

inpatient unit 

15 Hospital outpatient department 

15 Hospital emergency room 

10 Addiction treatment facility 

9 

Freestanding detoxification 

center 

8 Day hospital program 

6 Freestanding urgent care 

6 Social detoxification program 

3 Clinic 

1 Home health care agency 

1 Regional treatment center 

States vary in their usage of different types of placement criteria in determining which categories 

of Medicaid beneficiaries should receive particular kinds of detoxification services. The American 

Society of Addiction Medicine (ASAM) has established levels of settings for adult patients in need 

of detoxification. Thirty-six States said that their substance abuse detoxification setting most 

closely resembles the ASAM category of “medically managed intensive inpatient detoxification” 

(See Appendix D). Many of these States utilize other categories of placement settings or a 

mixture of inpatient and outpatient detoxification settings. Ten States use clinically managed 

residential detoxification. (See Appendix D, pages D-4 and D-5, for an explanation of the five 

generally accepted categories of patient placement criteria published by ASAM.) 

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6 
States identified many types of staff who participate in their State’s Medicaid detoxification 

programs. While a physician is utilized in 84 percent of the States, Table 2 below identifies 

various medical professionals and social workers who function as participants in the detoxification 

process. 

Table 2 

PARTICIPANTS IN THE DETOXIFICATION PROCESS 

Treatment 

Professionals # of States 

Physician, not including 

psychiatry 42 States 

Registered nurse 37 States 

Psychiatrist 36 States 

Licensed practical nurse 

(LPN) 30 States 

Psychologist 27 States 

Certified alcohol/drug 

counselor 23 States 

Licensed clinical social 

worker 22 States 

Degreed social worker 

(e.g., MSW) 20 States 

Physician assistant 18 States 

Non-licensed counselor 11 States 

All hospital staff 5 States 

Acupuncturist 3 States 

Another critical distinction among States is the numerous care settings that may exist within their 

Medicaid detoxification programs. States reported that they commonly use the following 

categories: inpatient hospitalization - 42 States; outpatient hospitalization - 13 States; clinical 

services - 11 States; and rehabilitation - 9 States. 

Also, some States use multiple categories, and one State indicated it uses all these types of 

categories for Medicaid reimbursement. This variety among States may hinder the capturing of 

consistently reliable data on detoxification programs. 

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7 
States Have Limited Data on Detoxification and Treatment Activity and Outcomes 

We found that States vary in their capturing of quality and performance data, whether reimbursed 

by Medicaid fee for service or part of a managed care program. Over three-fourth’s of States 

could not provide data on the average time elapsed for Medicaid beneficiaries from detoxification 

discharge to onset of treatment. Among 11 States that responded to a question on waiting times 

for Medicaid covered treatment, elapsed waiting time from detoxification to enrollment into a 

treatment program averaged 4.9 days, ranging from 1 to 30 days. 

Of the 28 States with managed care programs, 23 States responded they did not know whether 

managed care substance abuse detoxification services are less costly than providing these services 

through Medicaid fee for service. Only 5 of the 28 States said that Medicaid managed care for 

substance abuse detoxification is less costly than Medicaid fee for service. 

Some respondents said that detoxification programs are expected to refer Medicaid beneficiaries 

to treatment, but no one oversees or collects data on this function. We also heard that 

detoxification programs are indeed referring Medicaid beneficiaries to available treatment 

programs, but it is up to the beneficiary to oversee their individual recovery. Only 16 States 

reported that they have case management to monitor a beneficiary’s progress. Twelve of those 16 

States had managed care programs (See Appendix A). 

Only 15 States were able to provide information on Medicaid expenditures for detoxification for 

fiscal year 1996. Some States did not have management information systems to break out 

admission data by drug, and only two States had information on numbers of Medicaid 

beneficiaries who were admitted for detoxification and subsequently enrolled into a treatment 

program. 

States which do not capture information on continuum of care linkages have little basis to assess 

whether beneficiaries are receiving timely treatment services, or even if the initial referral was 

adhered to or heeded. As a result, State departments or bureaus of substance abuse services may 

be unaware of the overall effectiveness of their substance abuse program services. 

Only seven States reported recidivism data. The average recidivism rate was 47 percent covering 

a range of 23 percent to 93 percent (23%, 27%, 28%, 40%, 50%, 70%, and 93% were the 

responses from the 7 States) of Medicaid beneficiaries readmitted for detoxification services 

within one year. This figure from the seven States is consistent with information from the 1997 

Drug Abuse Treatment Outcomes Study commissioned by the National Institute of Drug Abuse 

which found that between 40 to 50 percent of beneficiaries entering drug treatment have prior 

treatment experience. Five of the seven States reported the following breakout of known 

recidivism rates by episodic categories: 

! 45 percent of beneficiaries were readmitted 1 - 2 times 

! 17 percent of beneficiaries were readmitted 3 - 5 times 

! 15 percent of beneficiaries were readmitted more than 5 times 

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8 
One-Third of States Conduct Performance Monitoring of Substance Abuse Programs 

Survey responses indicate that 16 States conduct quality assurance performance oversight efforts. 

These include case record reviews and site visits by the States’ departments or bureaus of alcohol

and drug abuse programs. Also, some of the managed care programs have their own performance

requirements listed in their quality assurance plans. These performance requirements may include

engaging beneficiaries in the treatment process after being discharged from inpatient

detoxification, reducing recidivism rates of beneficiaries, and increasing the number of Medicaid

beneficiaries served.

States which have performance indicators are able to demonstrate results in several areas. Some

of these areas include: beneficiaries are abstinent/drug-free at termination of the program;

reduction of use of the primary abuse substance; referral to alcohol and drug treatment or

continued treatment; employability improvement or academic improvement of beneficiaries;

beneficiaries are not being arrested during treatment or not driving under the influence;

pregnant women abstinent 30 days before delivery; and beneficiaries are experiencing continued

abstinence at regularly-checked intervals (e.g., one month, three months, six months, one year). 

States with performance requirements have sobriety maintenance goals to monitor beneficiaries’

continued periods of abstinence or reduction of drug use. In addition, two States have specific

programs and another two States are implementing programs to follow pregnant and post-partum

women through their rehabilitation. 

States Seldom Use Outpatient Settings for Detoxification Services 

Some States appear to be limited by what they can provide under Medicaid reimbursement 

provisions. For example, a State Medicaid agency may historically reimburse only for inpatient 

detoxification. Geographical considerations also influence the delivery of detoxification and 

treatment services. Two States report having large outlying rural areas where managed care is 

neither practical nor cost-feasible. In these States, Medicaid fee for service may be used for 

substance abuse services or in distinct geographic areas only. In addition, a State may only offer 

Medicaid detoxification to adults under emergency circumstances. Other States use the inpatient 

detoxification component primarily for acute cases, and some offer inpatient detoxification in 

exceptional circumstances, such as the Medicaid beneficiary who has an accompanying illness or 

is pregnant. Nearly all (44 States) offer some form of Medicaid inpatient care for detoxification. 

According to analysis of State responses, only five States (Georgia, Maryland, Massachusetts, 

South Carolina and Vermont) have moved from a primarily hospital-based (i.e., inpatient) 

detoxification program to State detoxification programs where outpatient detoxification is a 

standard choice. Another 10 States utilize outpatient detoxification on an alternative or less 

extensive basis. However, each State continues to offer Medicaid inpatient detoxification services 

when medical conditions require a medically-managed or medically-monitored inpatient 

detoxification. 

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9 
Maryland and Vermont have covered outpatient detoxification services for Medicaid recipients for 

15-20 years. Massachusetts moved to managed care programs about six years ago, opening up 

many different types of detoxification alternatives, including various outpatient programs. 

Georgia has offered outpatient detoxification services provided by Community Mental Health 

Centers for the past four years, with their State mental hospitals discontinuing inpatient 

detoxification treatment in 1994. However, inpatient detoxification is still available in acute care 

hospitals when conditions warrant. South Carolina began offering outpatient detoxification 

services in 1997. 

Forty States cover Medicaid outpatient substance abuse treatment compared to 33 States that 

cover Medicaid inpatient treatment. Half of the States cover both inpatient and outpatient 

treatment programs. In three States, Medicaid does not pay for substance abuse treatment 

services except through the Early Periodic and Screening Diagnosis and Treatment program for 

children under the age of 21. Also, a few States provide inpatient treatment only when the 

Medicaid beneficiary presents a co-occurring psychiatric illness or diagnosis; otherwise, an 

outpatient setting is appropriate for the remaining Medicaid beneficiaries. 

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10 
RECOMMENDATION

Whether in established programs covered by Medicaid, Federal grants, or State and local funding, 

States find it very difficult to capture extensive information in the areas of treatment completion, 

linkage from detoxification to treatment, sobriety maintenance, and recidivism. This is 

particularly apparent with substance abuse beneficiaries who move to and from programs and are 

not required to report progress in their recovery or lack of recovery. Therefore, to bridge the 

gaps in performance information and to enhance cost effective detoxification and treatment, we 

recommend that: 

SAMHSA and HCFA Should Work With States to Develop Appropriate Performance 

Measures 

The SAMHSA should work with State agencies to develop performance indicators that measure 

linkages from substance abuse detoxification to treatment. We believe this will help ensure that 

linkages and coordination are a priority for improvement, and that Medicaid beneficiaries are not 

merely engaging in detoxification without treatment. 

The SAMHSA and HCFA should collaborate and encourage State Medicaid agencies to include 

language regarding continuity of substance abuse services in their managed care contracts. 

The SAMHSA and HCFA also should work with States to facilitate enhanced data collection on 

the continuum of care. Such treatment and outcome data are essential to capture information on 

what is occurring in the treatment field. This will enable reasonable conclusions to be drawn to 

enhance the quality of existing programs. 

AGENCY COMMENTS 

We received comments on the draft report from HCFA and SAMHSA. The full text of their 

comments is included in Appendix E. 

Both HCFA and SAMHSA concurred with our recommendation but emphasized they cannot 

ensure that States meet goals and provide treatment and outcome data. However, they expressed 

a willingness to work with States in these efforts and toward greater continuity for treatment care 

following detoxification services. 

The SAMHSA also suggested exploring mechanisms for shifting to greater use of outpatient 

detoxification services which have been shown to be as safe and effective as, and more cost 

efficient than, inpatient detoxification. We agree this issue is important and warrants further 

examination. However, while our report contains a finding on the uneven use of this service 

among the States, our study was not sufficient to draw conclusions on outpatient detoxification 

safety and efficiency. 

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11 
ENDNOTES

1

"Outcome of Patients in A Veterans Affairs Ambulatory Detoxification Program,” Psychiatric 

Services, February 1997 (Vol. 48, No. 2), pp. 200 - 203. 

2

"Alcohol and Drug Use, Abuse, and Dependence among Welfare Recipients,” American Journal 

of Public Health, October 1996 (Vol. 86, No. 10), pp. 1450 - 1454. 

3

"Negotiating the New Health Care System: An Analysis of Contracts between State Medicaid 

Agencies and Managed Care Organizations,” Center for Health Policy Research and the Center 

for Health Care Strategies. © Center for Health Policy Research, George Washington University, 

February 1997. 

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12 
APPENDIX A

STATES WITH SUBSTANCE ABUSE MANAGED CARE

DETOXIFICATION PROGRAMS HAVE LIMITED DATA

ON FEATURES AND SERVICES

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A - 1 
STATES WITH SUBSTANCE ABUSE MANAGED CARE

DETOXIFICATION PROGRAMS HAVE LIMITED DATA

ON FEATURES AND SERVICES

Managed Use Patient Case Have Capture 

Care Performance Placement Mgt. Follow-up/ Recidivism 

States Indicators Criteria Svcs. Aftercare Data 

Arizona X X X X 

Colorado 

Connecticut 

Delaware X 

Georgia X 

Hawaii X X 

Illinois X 

Iowa X X X X 

Maryland X X X X 

Massachusetts X X X X 

Missouri X 

Nebraska X 

Nevada X 

N. Hampshire X 

New Mexico X X 

New York X X X 

No. Dakota X 

Ohio 

Oklahoma 

Pennsylvania 

R. Island X 

So. Carolina X 

So. Dakota 

Tennessee X X X 

Texas X X X X 

Utah 

Vermont X X 

Wisconsin X X 

TOTALS 11 11 12 6 4 

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A - 2 
APPENDIX B

LINKAGES AND CONTINUUM OF CARE

ARRANGEMENTS OF STATES

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B - 1 
LINKAGES AND CONTINUUM OF CARE

ARRANGEMENTS OF STATES

Basis for Linkage States 

Within the State’s Medicaid Plan for services Missouri* 

Expressly written in the Medicaid managed 

care contract 

Maryland* 

Ohio* 

Oregon 

Rhode Island* 

South Carolina* 

Within a quality assurance plan mandated by 

the managed care contract 

Arizona* 

Illinois* 

Massachusetts* 

Within the State’s general quality integrity or 

quality assurance plan 

Alaska 

Illinois (also within contract’s quality plan) 

Maine 

South Carolina (also in managed care plan) 

Wyoming 

Utilization management contractor ensures 

link between hospitals and State substance 

abuse/mental health authorities 

Florida 

Linkage of services is assured by the Division 

of Mental Health, Mental Retardation, and 

Substance Abuse Standards 

Georgia* 

The Behavioral Health Organizations are 

required to provide medically necessary 

services 

Tennessee* 

* States with Medicaid Managed Care detoxification programs. 

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B - 2 
APPENDIX C

MEDICAID LEVELS OF CARE COVERING

DETOXIFICATION AND

TREATMENT PROGRAMS BY STATE

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C - 1 
MEDICAID LEVELS OF CARE COVERING DETOXIFICATION

AND TREATMENT PROGRAMS BY STATE

STATES Medicaid I/P Detox Medicaid O/P 

Detox 

Medicaid I/P 

Treatment 

Medicaid O/P 

Treatment 

Medicaid Managed 

Care Detox 

Linkage of Detox 

to Treatment within 

Medicaid 

Managed Care 

Detox Services Less 

Costly than FFS 

ALABAMA X X 

ALASKA X X X X X 

ARIZONA X X X X 

ARKANSAS X X 

CALIFORNIA X X 

COLORADO X X X X X 

CONNECTICUT X X X X X 

DELAWARE X X X 

FLORIDA X X X 

GEORGIA X X X X X X 

HAWAII X X X X X 

IDAHO X X X 

ILLINOIS X X X X X 

INDIANA X X X 

IOWA X X X X X 

KANSAS X 

KENTUCKY 

LOUISIANA X X 

))))))))))) C - 2
STATES 

Medicaid I/P 

Detox 

Medicaid O/P 

Detox 

Medicaid I/P 

Treatment 

Medicaid O/P 

Treatment 

Medicaid Managed 

Care Detox 

Linkage of Detox 

to Treatment within 

Medicaid 

Managed Care 

Detox Services Less 

Costly than FFS 

MAINE X X X X X 

MARYLAND X X X X X 

MASSACHUSETTS X X X X X X X 

MICHIGAN X X 

MINNESOTA X 

MISSISSIPPI X X 

MISSOURI X X X X X 

MONTANA X X 

NEBRASKA X X X X 

NEVADA X X X 

NEW HAMPSHIRE X X X X 

NEW JERSEY X X X X X 

NEW MEXICO X X X 

NEW YORK X X X X 

N. CAROLINA X X 

N. DAKOTA X X X 

OHIO X X X X X 

OKLAHOMA X X X X 

OREGON X X 

PENNSYLVANIA X X X X 

RHODE ISLAND X X X X X X 

S. CAROLINA X X X X X X 

))))))))))) C - 3
S. DAKOTA X X X 

STATES 

Medicaid I/P 

Detox 

Medicaid O/P 

Detox 

Medicaid I/P 

Treatment 

Medicaid O/P 

Treatment 

Medicaid Managed 

Care Detox 

Linkage of Detox 

to Treatment within 

Medicaid 

Managed Care 

Detox Services Less 

Costly than FFS 

TENNESSEE X X X X X X 

TEXAS X X X X X 

UTAH X X X 

VERMONT X X X X X 

VIRGINIA 

WASHINGTON X X X 

W. VIRGINIA X X X 

WISCONSIN X X X X 

WYOMING X X X 

TOTALS 44 15 33 40 28 15 5 

))))))))))) C - 4
APPENDIX D

TYPES OF DETOXIFICATION SERVICES REIMBURSED 

BY STATE MEDICAID PROGRAMS 

(using American Society of Addiction Medicine categories) 

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D - 1 
TYPES OF DETOXIFICATION SERVICES1

 REIMBURSED 

BY STATE MEDICAID PROGRAMS 

STATES 

O/P Detox 

w/o extended 

onsite 

monitoring 

O/P Detox w/ 

extended 

onsite 

monitoring 

Clinically 

managed 

Residential 

Detox 

Medically 

monitored I/P 

Detox 

Medically 

managed 

intensive I/P 

Detox 

Other kinds of 

Medicaidreimbursed 

Detox 

programs 

ALABAMA X 

ALASKA X X 

ARIZONA X X2 

ARKANSAS X X X3 

CALIFORNIA X 

COLORADO X 

CONNECTICUT X X X X X4 

DELAWARE X X X X X X5 

FLORIDA X 

GEORGIA X X X 

HAWAII X X 

IDAHO X 

ILLINOIS X 

INDIANA X X X 

IOWA X X 

KANSAS 

KENTUCKY 

LOUISIANA X 

MAINE X X 

MARYLAND X X X 

MASSACHUSETTS X X X X 

MICHIGAN X 

MINNESOTA 

MISSISSIPPI X 

MISSOURI X X 

MONTANA X6 

NEBRASKA X 

NEVADA X 

NEW HAMPSHIRE X 

NEW JERSEY X X 

NEW MEXICO X X 

))))))))))) 

D - 2
STATES 

O/P Detox 

w/o extended 

onsite 

monitoring 

O/P Detox w/ 

extended 

onsite 

monitoring 

Clinically 

managed 

Residential 

Detox 

Medically 

monitored I/P 

Detox 

Medically 

managed 

intensive I/P 

Detox 

Other kinds of 

Medicaidreimbursed 

Detox 

programs 

NEW YORK X X 

N. CAROLINA X X7 

N. DAKOTA X X 

OHIO X X 

OKLAHOMA X 

OREGON X 

PENNSYLVANIA X X X 

RHODE ISLAND X X X X 

S. CAROLINA X X X X X 

S. DAKOTA X 

TENNESSEE X8 

TEXAS X X 

UTAH X 

VERMONT X X X X X 

VIRGINIA 

WASHINGTON X 

W. VIRGINIA X X 

WISCONSIN X 

WYOMING 

TOTALS 10 10 10 19 36 7 others 

1 American Society of Addiction Medicine categories of services, as identified in pages D-4 and D-5. 

2 Medically necessary inpatient detoxification in an acute care general hospital. 

3 Rehabilitative services for persons with mental illness. 

4 Community clinics. 

5 Delaware has outpatient detox w/o monitoring; outpatient detox w/ monitoring; clinically-managed detox; 

and medically-monitored detox through managed care only. Medically-managed intensive inpatient 

detoxification is through both Medicaid fee for service and Medicaid managed care. 

6 Inpatient hospital four-day detoxification. 

7 Outpatient services such as intensive outpatient and day hospital are reimbursed when provided through 

a community mental health center. 

8 The Medicaid (Tenncare) program does not directly reimburse for any detox service. The behavioral health 

organizations have the latitude to reimburse for any service they choose. 

))))))))))) 

D - 3 
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D - 4
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D - 5
APPENDIX E

AGENCY COMMENTS 

HEALTH CARE FINANCING ADMINISTRATION 

SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES 

ADMINISTRATION 

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E - 1 
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E - 2
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E - 3
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E - 4
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E - 5
))))))))))) 

E - 6