SEC. 2. ESTABLISHING COVERAGE FOR CERTAIN RESIDEN-
TIAL SUBSTANCE USE DISORDER SERVICES 
UNDER THE MEDICARE PROGRAM. 
(a) COVERAGE UNDER PART A.—Section 1812(a) of 
the Social Security Act (42 U.S.C. 1395d(a)) is amend-
ed— 
(1) in the header, by striking ‘‘AND’’ and insert-
ing ‘‘, AND RESIDENTIAL SUBSTANCE USE DIS-
ORDER SERVICES’’ after ‘‘HOSPICE CARE’’; 
(2) in paragraph (4), by striking ‘‘and’’ at the 
end; 
(3) in paragraph (5), by striking the period at 
the end and inserting ‘‘;’’; and 
(4) by adding at the end the following new 
paragraphs: 
‘‘(6) clinically managed low-intensity residential 
substance use disorder services (as defined in section 
1861(nnn)(1)) furnished to an individual who is a 
resident of a clinically managed residential substance 
use 
disorder 
facility 
(as 
defined 
in 
section 
1861(nnn)(3)) if the individual’s initial need for 
such level of services is performed, and continued 
need for such level of services is reviewed and re-
affirmed periodically (on a frequency specified by the 
Secretary that is not less often than every 30 days), 
in accordance with the most current edition ap-
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proved by the Secretary of evidence-based, substance 
use disorder-specific criteria developed by a non-
profit medical association generally recognized for its 
expertise in addiction treatment; 
‘‘(7) clinically managed high-intensity residen-
tial substance use disorder services (as defined in 
section 1861(ooo)(1)) furnished to an individual who 
is a resident of a clinically managed residential sub-
stance use disorder facility (as defined in section 
1861(nnn)(3)) if the individual’s initial need for 
such level of services is performed, and continued 
need for such level of services is reviewed and re-
affirmed periodically (on a frequency specified by the 
Secretary that is not less often than every 30 days), 
in accordance with the most current edition ap-
proved by the Secretary of evidence-based, substance 
use disorder-specific criteria developed by a non-
profit medical association generally recognized for its 
expertise in addiction treatment; and 
‘‘(8) medically managed residential substance 
use 
disorder 
services 
(as 
defined 
in 
section 
1861(ppp)(1)) furnished to an individual who is a 
resident of a medically managed residential sub-
stance use disorder facility (as defined in section 
1861(ppp)(3)) if the individual’s initial need for 
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such level of services is performed, and continued 
need for such level of services is reviewed and re-
affirmed periodically (on a frequency specified by the 
Secretary that is not less often than every 10 days), 
in accordance with the most current edition ap-
proved by the Secretary of evidence-based, substance 
use disorder-specific criteria developed by a non-
profit medical association generally recognized for its 
expertise in addiction treatment.’’. 
(b) RESIDENTIAL SUBSTANCE USE DISORDER SERV-
ICES, PROGRAMS, AND FACILITIES DEFINED.—Section 
1861 of the Social Security Act (42 U.S.C. 1395x) is 
amended by adding at the end the following new sub-
sections: 
‘‘(nnn) CLINICALLY MANAGED LOW-INTENSITY RES-
IDENTIAL SUBSTANCE USE DISORDER SERVICES, PRO-
GRAM, AND FACILITY.— 
‘‘(1) CLINICALLY
MANAGED
LOW-INTENSITY 
RESIDENTIAL
SUBSTANCE
USE
DISORDER
SERV-
ICES.—The term ‘clinically managed low-intensity 
residential substance use disorder services’ means 
the following items and services furnished to an indi-
vidual in a clinically managed low-intensity residen-
tial substance use disorder program (as defined in 
paragraph (2)) and (except as provided in subpara-
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graph (C)) by such program for the treatment of 
substance use disorders and co-occurring conditions, 
including— 
‘‘(A) bed and board; 
‘‘(B) such clinical services and other re-
lated services (including substance use disorder 
and co-occurring condition assessments and 
treatment planning), such use of clinically man-
aged residential substance use disorder facili-
ties, and such medical social services (including 
recovery support services), as are ordinarily fur-
nished by the clinically managed low-intensity 
residential substance use disorder program for 
the care and treatment of individuals in such 
program, and such drugs, supplies, appliances, 
and equipment, for use in the clinically man-
aged low-intensity residential substance use dis-
order program, as are ordinarily furnished by 
such program for the care and treatment of in-
dividuals in such program; and 
‘‘(C) such other diagnostic or therapeutic 
items or services, furnished by the clinically 
managed low-intensity residential substance use 
disorder program or by others under arrange-
ments with them made by the clinically man-
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aged low-intensity residential substance use dis-
order program, as are ordinarily furnished to 
individuals either by such clinically managed 
low-intensity residential substance use disorder 
program or by others under such arrangements, 
excluding— 
‘‘(i) medical or surgical services pro-
vided by a physician, services described by 
subsection (s)(2)(K), and qualified psychol-
ogist services; and 
‘‘(ii) the services of a private-duty 
nurse or other private-duty attendant. 
‘‘(2) CLINICALLY
MANAGED
LOW-INTENSITY 
RESIDENTIAL
SUBSTANCE
USE
DISORDER
PRO-
GRAM.—The term ‘clinically managed low-intensity 
residential substance use disorder program’ means a 
residential program which— 
‘‘(A) is primarily engaged in providing 24- 
hour structure and support and integrated clin-
ical services for the diagnosis, treatment, and 
care of individuals with substance use disorders 
who need structure and support to build and 
practice their recovery and coping skills; 
‘‘(B) directly provides a substance use dis-
order-specific multidimensional level of care as-
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sessment at admission to determine the rec-
ommended level of care, using protocols devel-
oped by a physician or advanced practice pro-
vider with experience in specialty addiction 
treatment to confirm the appropriateness of 
treatment in such program for individuals who 
are intoxicated, experiencing withdrawal, or pre-
senting with biomedical comorbidities; 
‘‘(C) directly provides, or has a direct af-
filiation with, a provider or providers who can 
provide physical examinations, prescribe all ad-
diction and psychiatric medications, and provide 
medication management and laboratory testing 
as needed (except that access to methadone is 
not required if no providers of methadone for 
opioid use disorder are available, as determined 
by the Secretary); 
‘‘(D) directly provides weekly clinical serv-
ices, in hourly increments to be determined by 
the Secretary, in an amount, frequency, and in-
tensity appropriate to an individual’s needs as 
determined by a substance use disorder-specific 
multidimensional assessment, with structured 
services available seven days per week; 
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‘‘(E) maintains clinical records on all pa-
tients and maintains such records as the Sec-
retary finds to be necessary to determine the 
degree and intensity of the treatment provided 
to individuals entitled to clinically managed low- 
intensity residential substance use disorder pro-
gram insurance benefits under part A, provided 
that the Secretary shall not require a program 
to maintain such records in a manner that is 
more extensive, detailed, or stringent than what 
is required of an institution that is considered 
a ‘hospital’ under subsection (e); 
‘‘(F) coordinates patient referrals and 
transitions to other levels of care when needed, 
including transition planning in partnership 
with other providers participating in the Medi-
care program; and 
‘‘(G) meets such additional staffing re-
quirements and other conditions as the Sec-
retary shall specify to ensure the effective and 
efficient furnishing of such program’s services 
and the compliance of such program with clini-
cally managed low-intensity residential sub-
stance use disorder program standards de-
scribed in the most current edition approved by 
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the Secretary of evidence-based, substance use 
disorder-specific criteria developed by a non-
profit medical association generally recognized 
for its expertise in addiction treatment. 
Obtaining and maintaining certification from a certi-
fying body that has the necessary competencies to 
assess compliance with such program standards and 
is approved by the Secretary shall be deemed to 
demonstrate compliance with the standards de-
scribed in subparagraph (G). 
‘‘(3) CLINICALLY MANAGED RESIDENTIAL SUB-
STANCE USE DISORDER FACILITY.—The term ‘clini-
cally managed residential substance use disorder 
treatment facility’ means a facility which— 
‘‘(A) is enrolled under section 1866(j); 
‘‘(B) is accredited by an accrediting body 
approved by the Secretary; 
‘‘(C) is legally authorized to provide a 
clinically managed low- or high-intensity resi-
dential substance use disorder program under 
the law of the State (or under a State regu-
latory mechanism provided by State law) in 
which the facility is located; and 
‘‘(D) meets such additional conditions as 
the Secretary finds necessary in the interest of 
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the health and safety of individuals who are 
residents of such facilities and are furnished 
clinically managed low-intensity residential sub-
stance use disorder services (or clinically man-
aged high-intensity residential substance use 
disorder services, as the case may be). 
‘‘(ooo) CLINICALLY
MANAGED
HIGH-INTENSITY 
RESIDENTIAL SUBSTANCE USE DISORDER SERVICES AND 
PROGRAM.— 
‘‘(1) CLINICALLY
MANAGED
HIGH-INTENSITY 
RESIDENTIAL
SUBSTANCE
USE
DISORDER
SERV-
ICES.—The term ‘clinically managed high-intensity 
residential substance use disorder services’ means 
the following items and services furnished to an indi-
vidual in a clinically managed high-intensity residen-
tial substance use disorder program (as defined in 
paragraph (2)) and (except as provided in subpara-
graph (C)) by such program for the treatment of 
substance use disorders and co-occurring conditions, 
including— 
‘‘(A) bed and board; 
‘‘(B) such clinical services and other re-
lated services (including substance use disorder 
and co-occurring condition assessments and 
treatment planning), such use of clinically man-
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aged residential substance use disorder facili-
ties, and such medical social services (including 
recovery support services), as are ordinarily fur-
nished by the clinically managed high-intensity 
residential substance use disorder program for 
the care and treatment of individuals in such 
program, and such drugs, supplies, appliances, 
and equipment, for use in the clinically man-
aged high-intensity residential substance use 
disorder program, as are ordinarily furnished 
by such program for the care and treatment of 
individuals in such program; 
‘‘(C) such other diagnostic or therapeutic 
items or services, furnished by the clinically 
managed high-intensity residential substance 
use disorder program or by others under ar-
rangements with them made by the clinically 
managed high-intensity residential substance 
use disorder program, as are ordinarily fur-
nished to individuals either by such clinically 
managed high-intensity residential substance 
use disorder program or by others under such 
arrangements, excluding— 
‘‘(i) medical or surgical services pro-
vided by a physician, services described by 
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subsection (s)(2)(K), and qualified psychol-
ogist services; and 
‘‘(ii) the services of a private-duty 
nurse or other private-duty attendant. 
‘‘(2) CLINICALLY
MANAGED
HIGH-INTENSITY 
RESIDENTIAL
SUBSTANCE
USE
DISORDER
PRO-
GRAM.—The term ‘clinically managed high-intensity 
residential substance use disorder program’ means a 
residential program which— 
‘‘(A) is primarily engaged in providing 24- 
hour supervision for the diagnosis, treatment, 
and care of individuals with substance use dis-
orders who need a safe and stable living envi-
ronment to develop sufficient recovery skills so 
that they do not immediately relapse or con-
tinue to use in an imminently dangerous man-
ner upon transition to a less intensive level of 
care; 
‘‘(B) directly provides a substance use dis-
order-specific multidimensional level of care as-
sessment at admission to determine the rec-
ommended level of care, using protocols devel-
oped by a physician or advanced practice pro-
vider experienced in specialty addiction treat-
ment to confirm the appropriateness of treat-
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ment in such facility for individuals who are in-
toxicated, experiencing withdrawal, or pre-
senting with biomedical comorbidities; 
‘‘(C) directly provides, or has a direct af-
filiation with, a provider or providers who can 
provide physical examinations, prescribe all ad-
diction and psychiatric medications, and provide 
medication management and laboratory testing 
as needed (except that access to methadone is 
not required if no providers of methadone for 
opioid use disorder are available, as determined 
by the Secretary); 
‘‘(D) directly provides 20 hours or more of 
clinical services per week in an amount, fre-
quency, and intensity appropriate to individual 
patient needs as determined by a substance use 
disorder-specific multidimensional assessment, 
with structured services available seven days 
per week; 
‘‘(E) directly provides clinically managed 
residential withdrawal management, including 
24-hour supervision, observation, and support 
for individuals who are intoxicated or experi-
encing withdrawal, who do not need medically 
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monitored or managed care (as determined 
through a medical evaluation); 
‘‘(F) maintains clinical records on all pa-
tients and maintains such records as the Sec-
retary finds to be necessary to determine the 
degree and intensity of the treatment provided 
to individuals entitled to clinically managed 
high-intensity residential substance use disorder 
program insurance benefits under part A, pro-
vided that the Secretary shall not require a pro-
gram to maintain such records in a manner 
that is more extensive, detailed, or stringent 
than what is required of an institution that is 
considered a ‘hospital’ under subsection (e); 
‘‘(G) management of patient referrals and 
transitions to other levels of care when needed; 
and 
‘‘(H) meets such additional staffing re-
quirements and other conditions as the Sec-
retary shall specify to ensure the effective and 
efficient furnishing of such program’s services 
and the compliance of such program with clini-
cally managed high-intensity residential sub-
stance use disorder program standards de-
scribed in the most current edition approved by 
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the Secretary of evidence-based, substance use 
disorder-specific criteria developed by a non-
profit medical association generally recognized 
for its expertise in addiction treatment. 
Obtaining and maintaining certification from a certi-
fying body that has the necessary competencies to 
assess compliance with such program standards and 
is approved by the Secretary shall be deemed to 
demonstrate compliance with the standards de-
scribed in subparagraph (H). 
‘‘(ppp) MEDICALLY MANAGED RESIDENTIAL SUB-
STANCE USE DISORDER SERVICES, PROGRAM, AND FA-
CILITY.— 
‘‘(1) MEDICALLY MANAGED RESIDENTIAL SUB-
STANCE USE DISORDER SERVICES.—The term ‘medi-
cally managed residential substance use disorder 
services’ means the following items and services fur-
nished to an individual in a medically managed resi-
dential substance use disorder program (as defined 
in paragraph (2)) and (except as provided in sub-
paragraph (C)) by such program for the treatment 
of substance use disorders and co-occurring condi-
tions, including— 
‘‘(A) bed and board; 
‘‘(B) 24-hour nursing services; 
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‘‘(C) such clinical services and other re-
lated services (including substance use disorder 
and co-occurring condition assessments and 
treatment planning), such use of medically 
managed residential substance use disorder fa-
cilities, and such medical social services (includ-
ing recovery support services), as are ordinarily 
furnished by the medically managed residential 
substance use disorder program for the care 
and treatment of residents of such program, 
and such drugs, supplies, appliances, and equip-
ment, for use in the medically managed residen-
tial substance use disorder program, as are or-
dinarily furnished by such program for the care 
and treatment of residents of such program; 
‘‘(D) such other diagnostic or therapeutic 
items or services, furnished by the medically 
managed residential substance use disorder pro-
gram or by others under arrangements with 
them made by the medically managed residen-
tial substance use disorder program, as are or-
dinarily furnished to residents either by the 
medically managed residential substance use 
disorder program or by others under such ar-
rangements, excluding— 
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‘‘(i) medical or surgical services pro-
vided by a physician, services described by 
subsection (s)(2)(K), and qualified psychol-
ogist services; and 
‘‘(ii) the services of a private-duty 
nurse or other private-duty attendant. 
‘‘(2) MEDICALLY MANAGED RESIDENTIAL SUB-
STANCE USE DISORDER PROGRAM.—The term ‘medi-
cally managed residential substance use disorder 
program’ means a residential program which— 
‘‘(A) is primarily engaged in providing 
management of substance withdrawal and bio-
medical 
comorbidities, 
including 
diagnosis, 
treatment, and care, for individuals with sub-
stance use disorders who need 24-hour observa-
tion, monitoring, and treatment, but do not re-
quire the full resources of a hospital; 
‘‘(B) directly provides a comprehensive 
nursing assessment at the time of admission, 
with a substance use disorder-focused history 
obtained as part of the initial assessment which 
is reviewed by a physician or advanced practice 
provider within 24 hours of admission; 
‘‘(C) directly provides a comprehensive 
physical examination by a physician or ad-
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vanced practice provider within 24 hours of ad-
mission; 
‘‘(D) directly provides sufficient biopsycho-
social screening and assessments of the pa-
tient’s substance use disorders and co-occurring 
disorders to determine the appropriate rec-
ommended level of care and treatment planning; 
‘‘(E) directly provides daily medical inter-
ventions, including nursing and medical moni-
toring for stabilization of acute withdrawal, bio-
medical and psychiatric conditions, and psycho-
social services to encourage engagement in on-
going treatment, all in an amount, frequency, 
and intensity appropriate to individual patient 
needs as determined by a substance use dis-
order-specific multidimensional assessment; 
‘‘(F) directly provides essential medications 
on site with policies and procedures that define 
essential medicines based on current standards 
of clinical practice and that ensure these medi-
cations are stocked and access to all Food and 
Drug Administration-approved medications for 
the treatment of substance use disorders (ex-
cept that access to methadone is not required if 
no providers of methadone for opioid use dis-
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order are available, as determined by the Sec-
retary); 
‘‘(G) directly provides residential intoxica-
tion and withdrawal management services and 
residential management of biomedical condi-
tions; 
‘‘(H) maintains clinical records on all pa-
tients and maintains such records as the Sec-
retary finds to be necessary to determine the 
degree and intensity of the treatment provided 
to individuals entitled to clinically managed 
high-intensity residential substance use disorder 
program insurance benefits under part A, pro-
vided that the Secretary shall not require a pro-
gram to maintain such records in a manner 
that is more extensive, detailed, or stringent 
than what is required of an institution that is 
considered a ‘hospital’ under subsection (e); 
‘‘(I) management of patient transitions to 
other levels of care when needed; and 
‘‘(J) meets such additional staffing re-
quirements and other conditions as the Sec-
retary shall specify to ensure the effective and 
efficient furnishing of such program’s services 
and the compliance of such program with clini-
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cally managed high-intensity residential sub-
stance use disorder program standards de-
scribed in the most current edition approved by 
the Secretary of evidence-based, substance use 
disorder-specific criteria developed by a non-
profit medical association generally recognized 
for its expertise in addiction treatment. 
Obtaining and maintaining certification from a certi-
fying body that has the necessary competencies to 
assess compliance with such program standards and 
is approved by the Secretary shall be deemed to 
demonstrate compliance with the standards de-
scribed in subparagraph (J). 
‘‘(3) MEDICALLY MANAGED RESIDENTIAL SUB-
STANCE USE DISORDER FACILITY.—The term ‘medi-
cally managed residential substance use disorder 
treatment facility’ means a facility which— 
‘‘(A) is enrolled under section 1866(j); 
‘‘(B) is accredited by an accrediting body 
approved by the Secretary; 
‘‘(C) is legally authorized to provide a 
medically managed residential substance use 
disorder program under the law of the State (or 
under a State regulatory mechanism provided 
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by State law) in which the facility is located; 
and 
‘‘(D) meets such additional conditions as 
the Secretary finds necessary in the interest of 
the health and safety of individuals who are 
residents of such facilities and are furnished 
medically managed residential substance use 
disorder services.’’. 
(c) INCLUDING RESIDENTIAL SUBSTANCE USE DIS-
ORDER FACILITIES AS MEDICARE PROVIDERS.—Section 
1866(e) of the Social Security Act (42 U.S.C. 1395cc(e)) 
is amended— 
(1) in paragraph (2), by striking at the end 
‘‘and’’; 
(2) in paragraph (3), by striking the period at 
the end and inserting ‘‘;’’; and 
(3) by adding at the end the following new 
paragraphs: 
‘‘(4) clinically managed residential substance 
use disorder facilities (as defined in paragraph (3) 
of section 1861(nnn)), but only with respect to the 
furnishing of clinically managed low-intensity resi-
dential substance use disorder services (as defined in 
paragraph (1) of such section) and clinically man-
aged high-intensity residential substance use dis-
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order services (as defined in paragraph (1) of section 
1861(ooo)), as applicable; and 
‘‘(5) medically managed residential substance 
use disorder facilities (as defined in paragraph (3) 
of section 1861(ppp)), but only with respect to the 
furnishing of clinically managed low-intensity resi-
dential substance use disorder services (as defined in 
paragraph (1) of section 1861(nnn)), clinically man-
aged high-intensity residential substance use dis-
order services (as defined in paragraph (1) of section 
1861(ooo)), and medically managed residential sub-
stance use disorder services (as defined in paragraph 
(1) of section 1861(ppp)), as applicable.’’. 
(d) PROSPECTIVE PAYMENT SYSTEM FOR RESIDEN-
TIAL SUBSTANCE USE DISORDER SERVICES.—Section 
1886 of the Social Security Act (42 U.S.C. 1395ww) is 
amended by adding at the end the following new sub-
section: 
‘‘(u) PROSPECTIVE PAYMENT
FOR RESIDENTIAL 
SUBSTANCE USE DISORDER FACILITIES.— 
‘‘(1) DEVELOPMENT
OF
SYSTEM.—The Sec-
retary shall develop a per diem prospective payment 
system for low-intensity clinically managed, high-in-
tensity clinically managed, and medically managed 
residential substance use disorder services, as those 
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terms 
are 
defined, 
respectively, 
in 
sections 
1861(nnn)(1), (ooo)(1), and 1861(ppp)(1) (collec-
tively, ‘residential substance use disorder services’). 
Such system shall include appropriate adjustments 
to reflect the differing resource-intensity of low-in-
tensity clinically managed, high-intensity clinically 
managed, and medically managed residential sub-
stance use disorder services, and may include an 
adequate patient classification system that reflects 
differences in patient resource use and cost. In de-
veloping such system, the Secretary may require 
clinically managed and medically managed residen-
tial substance use disorder facilities, as those terms 
are defined in sections 1861(nnn)(3) and (ppp)(3), 
respectively (collectively, ‘residential substance use 
disorder facilities’), to submit such information to 
the Secretary, including cost reports, as the Sec-
retary may require to develop such system. 
‘‘(2) IMPLEMENTATION.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
provide, for cost reporting periods beginning on 
or after October 1, 2025, for payments for resi-
dential substance use disorder services fur-
nished by residential substance use disorder fa-
cilities in accordance with the prospective pay-
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ment system established by the Secretary under 
this subsection. 
‘‘(B) PAYMENTS.— 
‘‘(i) INITIAL
PAYMENTS.—The Sec-
retary shall implement such prospective 
payment system in the initial fiscal year so 
that the estimated aggregate amount of 
prospective payment rates is equal to 100 
percent of the estimated amount of reason-
able costs incurred by residential substance 
use disorder facilities in furnishing such 
services. 
‘‘(ii) 
PAYMENTS
IN
SUBSEQUENT 
YEARS.—Payments rates in years after the 
year of implementation of such system 
shall be the payment rates in the previous 
year, adjusted by an increase factor. Such 
factor shall be based on an appropriate 
percentage increase in a market basket of 
goods and services comprising the services 
for which payment is made under this sub-
section.’’. 
Æ 
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