Editor’s Note: Prior to the COVID-19 pandemic, many governors were looking for ways to strengthen substance use disorder (SUD) provider capacity as part of their comprehensive response to the opioid epidemic. With the COVID-19 crisis raging, however, the imperative is now greater than ever as providers and states face unprecedented fiscal challenges due to the COVID-19-related economic downturn. Additionally, there are increasing reports that the country is seeing an increase in the need for SUD treatment as a result of the stress, social isolation and job loss associated with the pandemic.
In a new issue brief prepared for the National Governors Association in partnership with the Technical Assistance Collaborative, summarized below, Manatt describes strategies that governors are using to address these SUD challenges as they face the most severe fiscal crisis seen in decades. To download a free copy of the full issue brief, click here.
Many governors are significantly leveraging federal funding opportunities, taking advantage of new emergency flexibilities granted by the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Drug Enforcement Administration (DEA) to support access to medication-assisted treatment (MAT), working with SUD providers to develop and disseminate information, and integrating SUD treatment providers and patients into their states’ broader responses to COVID-19. States also continue to invest some of their shrinking general revenue funds into SUD interventions, reflecting the urgent need to bolster an already strained behavioral health system and invest in SUD treatment that can save money by averting even more costly medical care, as well as criminal justice and child welfare expenses.
Factors Driving Fiscal Pressure on SUD Providers
Like other providers, SUD providers have been hit hard by COVID-19, as people avoided medical care to comply with social distancing requirements or out of fear of contracting the virus. On average, outpatient providers (including SUD providers) reported a 33% drop in visits as of May 2020. In the weeks and months ahead, they may face new pressures as states are required to respond to their budget shortfalls.
At the same time, COVID-19 has introduced new costs, such as:
- Providing Personal Protective Equipment for staff and, depending on the setting, patients as well.
- Testing. States increasingly are encouraging behavioral health providers to test patients before they enter residential treatment, as well as to conduct testing of staff and patients in group or congregate settings, particularly if they display any symptoms.
- Reconfiguring space to create more distance between patients and, in residential and other congregate settings, allowing for the isolation of any patient who becomes ill or has been exposed to someone with COVID-19.
- Expanding operating hours at opioid treatment programs (OTPs) or other outpatient clinics to reduce the flow of patients seeking treatment at the same time.
- Offering hazard pay and backup staffing to encourage staff to work despite the risk of contracting COVID-19, and preparing for the possibility that regular staff will be out due to child care obligations, a sick family member or their own illness.
Office-based opioid use disorder (OUD) treatment providers face many of the same issues, including lost revenue from lower utilization, the need for PPE and an imperative to change the way that they provide care by reconfiguring their workspaces and using telehealth.
Strategies for Supporting SUD Providers
Before COVID-19, governors were working effectively to strengthen SUD provider capacity as part of responding to the opioid epidemic and broader challenges in the SUD treatment system. Now, however, they are developing and evaluating additional strategies to reflect the unique issues generated by COVID-19 and the new budget realities confronting their states.
1. Systematically gather data on SUD providers.
To better understand the scope and severity of the financial and operational challenges confronting SUD providers during the COVID-19 crisis, states are looking to systematically assess how their providers are faring through strategies such as analyzing Medicaid claims, conducting surveys of SUD providers and establishing a provider dashboard to track which are closing and if they have plans to reopen.
2. Provide information on high-priority federal funding opportunities and support SUD providers in accessing federal funding.
With state revenues falling, many governors are making it a priority to support their SUD providers (and other providers) in taking advantage of federal funding opportunities. Following are some of the most important sources of funding (in terms of the dollar amounts available and the breadth of eligible providers) for which SUD providers are still potentially eligible, as well as how governors are working to assist providers in taking advantage of such funding opportunities.
Tax and Loan Opportunities for SUD Providers as Employers
Paycheck Protection Program (PPP):
In early May, Congress allocated an additional $310 billion to the PPP, first established by the CARES Act, to disburse loans through the end of June to small businesses to maintain operations and retain staff. Small businesses with up to 500 employees are eligible to apply to a participating bank for a loan equal to ten weeks of a company’s payroll, up to $10 million, that can be used to cover rent, payroll, mortgage payments and utilities.
Main Street Lending Program:
The Federal Reserve created a $600 billion loan program for small and midsized businesses with up to 15,000 employees or annual revenues in 2019 of up to $5 billion that is expected to begin accepting applications in the near future.
Employee Retention Tax Credit:
Qualified employers that have experienced a slowdown of operations and revenue due to COVID-19, including eligible nonprofit organizations, can claim a tax credit of up to 50% of wages, up to $5,000 per employee, for wages paid to employees between March 13, 2020, and December 31, 2020.
Employers that have obtained a PPP loan are ineligible for this credit.
Payroll Tax Delay:
Employers that have not received a PPP loan may defer paying the employer share of payroll taxes otherwise due for 2020 wages, with the first half of the deferred payment obligation due on December 31, 2021, and the second half due on December 31, 2022.
Provider Relief Fund:
The Provider Relief Fund consists of $175 billion that the Department of Health & Human Services (HHS) is distributing to Medicare, Medicaid and other providers to help defray the impact of new costs and lost revenue attributable to COVID-19. It includes multiple tranches of money, many of which already have been distributed to providers, including $50 billion set aside for Medicare providers. On June 11, HHS announced that $15 billion of the $175 billion will be distributed to Medicaid providers that had not received funding from the $50 billion.
Assist SUD Providers in Accessing Federal Funding:
For many SUD providers, especially smaller organizations with limited administrative staff, it can be daunting to sort through the available federal funding options and processes to apply for support. In response, some states are assisting SUD providers in securing federal funding by providing technical assistance, coordinating with state associations for SUD providers and seeking clarification from federal agencies on behalf of providers.
3. Leverage Medicaid as a tool to support providers.
A number of governors are using Medicaid flexibilities to help prevent SUD providers (and other providers) from going out of business as a result of the pandemic. Since Medicaid requires a nonfederal share, states typically turn to it only if federal COVID-19 dollars are not available or would take too long to reach financially fragile providers. In the Families First Coronavirus Response Act, Congress temporarily increased the federal Medicaid matching rate by 6.2 percentage points for nearly all Medicaid beneficiaries, except for low-income adults covered as a result of Medicaid expansion, increasing its viability as a tool for supporting providers. The specific ways in which Medicaid can be used include direct payments to SUD providers, increased fee-for-service payments to reflect lower utilization rates and COVID-19 costs, and financial rewards to SUD providers for meeting performance metrics.
4. Reduce barriers to care for people with SUD during COVID-19.
In addition to payment strategies to ensure that providers are fiscally sound, states have adopted a number of additional regulatory and policy strategies to support broader access to treatment for people with SUD. The pandemic has spurred changes in when and how people with SUD can gain access to MAT and other services. For MAT specifically, states generally must “take up” these options after they are made available by SAMHSA and the DEA. They can also play a role in alerting providers about the changes and providing them with guidance and support in taking advantage of them.
States can reduce barriers to care by allowing the initiation of buprenorphine without an in-person visit, promoting alternate dispensing of methadone, eliminating or suspending counseling requirements, eliminating prior authorization and other barriers to treatment, and using Medicaid to support virtual counseling through telehealth and by telephone.
Looking Ahead
States have a number of options for supporting continued access to SUD treatment through the pandemic, and many have already taken significant action to do so. Some states acted quickly to support providers in keeping their doors open, and nearly all updated their policies to take advantage of new opportunities to promote access to MAT and expand access to telehealth. As it becomes increasingly apparent that the medical, economic and fiscal fallout from the pandemic may be felt for an extended period of time, the question arises of how states will support continued access in the longer term. With the notable exception of federal funding opportunities that are closing, state strategies can work to support provider networks and maintain access to critical SUD services in both the short and longer terms.
Acknowledgments
The National Governors Association Center for Best Practices (NGA Center) would like to acknowledge the Centers for Disease Control and Prevention (CDC) for its generous support in developing this issue brief. The contents of the brief are solely the responsibility of the authors and do not necessarily represent the views of the CDC or the U.S. Department of Health & Human Services.
