Colorado Medicaid extends coverage for substance abuse treatment

The Colorado Department of Health Care Policy and Financing (HCPF) announced Thursday Health First Colorado is including inpatient and residential substance use disorder (SUD) treatment services in its care plan beginning Jan. 1st. Prior to this addition, the result of HB 18-1136, the department only covered these services for outpatients.


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“Our Department provides physical and behavioral health coverage to about 1 in 4 Coloradans,” said Kim Bimestefer, Executive Director of HCPF. “Expanding substance use disorder benefits to encompass the full continuum of services is a significant step forward in treating substance use disorder and responding to the increased overall demands for behavioral health services. We want all the Coloradans we serve to receive appropriate, person-centered support that helps them recover from addiction and get their lives back.” 

Outpatient treatment services include urine analysis screenings, individual or group therapy and working with a case manager, according to the Deputy Medicaid Director for HCPF Laurel Karabatsos. She said the newly-covered inpatient and residential services include patient assessment services and withdrawal management. 

“In the past, Medicaid didn’t cover anything that was in a residential or inpatient setting,” Karabatsos said. “Those are expensive, higher-intensity services. Now we actually have the full continuum. As managed care organizations, we have a real emphasis on the care coordination aspect, so assessing a whole person, what services they need, and integrating those with their other medical or behavioral health services and meeting them where they are.”

Colorado Medicaid has covered outpatient SUD treatment since 2006, Karabatsos said. According to her, part of the reason inpatient and residential services were not covered in initial legislation was because the Department of Health Services’ (DHS) Office of Behavioral Health used to manage SUD benefits through contracts with numerous Managed Service Organizations (MSOs). The DHS wanted the MSOs to provide the full continuum of care, which Karabatsos said would needlessly fragment Medicaid services and thus halted full coverage through Medicaid.

Initial refusals to add inpatient and residential services to SUD care were also the result of high costs, Karabatsos said.

“It’s very expensive to treat substance abuse disorders,” she said. “It’s a difficult path to recovery. It’s not like getting a knee replacement where you go in and have surgery and you’re fine. People often relapse, so I imagine that the cost of providing those higher levels of care was also a factor.”

Karabatsos believes the legislature eventually decided to cover the cost of the full continuum of care in 2018 due to the increasing seriousness of substance abuse disorders.

“I think one of the big changes is just how much substance use disorders have become problematic, and the light that’s been shining on the issue, especially around opioid misuse and abuse, and the rise in overdose deaths,” she said. “The issue is more front and center. I think communities and organizations are also getting smarter in just understanding that while it may be more expensive to treat these things, there’s also a huge cost to not treating them.”