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Residential Addiction Treatment Centers Must Stay Small to Qualify for Medicaid


treatment beds

A federal law requires residential addiction treatment centers to have 16 or fewer beds in order to qualify for Medicaid coverage, The New York Times reports. The law is impeding efforts to expand addiction treatment coverage under the Affordable Care Act (ACA).

The ACA allows states to expand Medicaid to many more people with low incomes. So far, 26 states have done so, the article notes. The law also categorizes substance abuse treatment as an “essential health benefit.”

But another federal law, enacted almost 50 years ago, restricts the number of beds a facility can have in order to receive Medicaid coverage. The law is likely to prevent many patients from entering residential programs at a time when heroin addiction is on the rise. Ninety percent of addiction treatment beds in California are in programs with more than 16 beds.

The intent of the law was to prevent Medicaid from paying for treatment in state psychiatric hospitals, and instead to have states provide funding. The law included residential substance abuse treatment programs.

“The federal government basically said to the states, ‘We’re not going to pay for your institutional care,’” Becky Vaughn, Executive Director of the State Associations of Addiction Services, told the newspaper. “Addiction services never should have been wrapped into that because we are not long term.”

Congress could change the law, a move urged by treatment centers and state Medicaid directors. It is unlikely Congress will make a change, however, because it seems unwilling to deal with any health care issues, and because a change could be costly.

Paul Samuels, Director of the Legal Action Center, a nonprofit group that advocates for people with addiction, said outpatient treatment, which usually consists of one or more group counseling sessions a week, is not enough for the severely ill.

6 Responses to this article

  1. MJB / July 21, 2014 at 7:08 am

    I don’t know the statistics on this, but it is a safe bet to say that most inpatient programs with 16 beds or less are most likely private, luxury rehabs, who would never take Medicaid, anyway. I agree with Mr. Lynch, how could a program this small actually pay for itself or provide adequate services?

    • Caley / August 5, 2014 at 2:31 pm

      Giving adequate care certainly is longterm. Alcoholism s a chronic disease. Smaller provide better treatment. Who said one a week counseling was enough ?
      Providing education is not so costly as some are indicating.

  2. Tom Lohff / July 17, 2014 at 1:50 pm

    I work for the state of Kansas and license residential facilities that have many more than 16 beds. The facilites take Medicaid, statefunding, DOC funding and private pay. I beleive the interpretation is that you cannot have more than16 Medicaid beds in a single facility, however you may have more than 16 of the other funding streatms. The intent is to not have programs only taking federal dollars for treatment. in this manner the medicaid dollars are split among the provider network in a manner than does not limit the small programs.

  3. Carey Wainwright / July 15, 2014 at 5:32 pm

    Our legislative leaders have become anachronisms regarding the people’s needs, concerns and well-being. The Affordable Care Act is a wonderful piece of legislation however capital poliiticians must update or eliminate antiquated laws which hampr full implementation.
    Residential treatment is woefully underfunded when the comprehensive services that clients are provided while in treatment. Residential treatment must be funded to help stem the rising tide of need.

  4. Karolyn / July 15, 2014 at 2:45 pm

    Please update article to reference federal law limiting number of beds, please.

  5. Martin D. Lynch / July 15, 2014 at 1:24 pm

    This requirement will eliminate any ability of a program to realize an economy of scale.
    Providing effective treatment for 16 clients, while meeting all education and experience requirements and feeding clients will be impossible for any well run program.

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