Financial barriers to treatment make recovery challenging. Funds from recent pharmaceutical settlements could help.
By Anna Deen, originally published September 30, 2021
For North Carolinians with addiction, finding a suitable treatment plan is only the beginning of an often lifelong process.
After patients navigate the matrix of treatment services and regulations, they have to find a way to pay for care. A lack of funding can cause a life-or-death setback.
Methadone treatment can cost more than $100 per week, said Dr. Carlyle Johnson, director of provider network strategic initiatives at Alliance Health, a local management entity–managed care organization. LME-MCOs are regional government entities the state created to facilitate behavioral health services. Alliance’s region includes Cumberland, Durham, Wake and Johnston counties.
If uninsured patients run out of the money needed to pay for treatment, they must taper off the medication and drop out of the program in what’s called a “financial taper,” Johnson said. Some might continue returning to and dropping out of the program as their income ebbs and flows, and overdose and die in the process.
Others can’t afford to pay $400 or more per month for ongoing treatment in the first place, even if they are insured.
Dr. Eric Morse, an addiction and sports psychiatrist with the Morse Clinics and Carolina Performance, treats patients with methadone and other medications. In his experience, private insurance companies do not cover methadone in North Carolina, though he’s hopeful that could change if private insurance companies contract with OTPs as a result of Medicaid Transformation.
To cover the difference, grants and funding at county, state and federal levels are essential.
Alliance Health serves Medicaid, uninsured and underinsured patients and determines the need for publicly funded treatment services for mental health, developmental disabilities and substance-use disorders.
LME-MCOs contract with providers, who will be paid with Medicaid or state and county funds. When providers submit claims, the LME-MCOs reimburse them for their services, out of funding they receive from the state and federal government for each member each month, across a number of categories.
If funds are left over, the LME-MCOs can reinvest and develop other services, giving the agencies an incentive to manage funds effectively. If they mismanage funds, they have to pay out of pocket.
Changing history
The current LME-MCO structure, which 2011 legislation created, is in the process of changing.
Alliance Health is one of seven agencies the state has selected to be a regional Behavioral Health Intellectual/Developmental Disability Tailored Plan. They are designed to deliver additional specialized, behavioral health services, effective July 1, 2022.
This change could mean new outcomes for patients seeking opioid treatment services. Alliance Health will be responsible for Medicaid claims for pharmacy, which means if someone were, for example, prescribed pain medications from two practitioners or several medications with potential interactions, the agency could provide guidance.
Additionally, opioid use can lead to medical complications, including infective endocarditis, osteomyelitis, sepsis or final abscess. Currently, Alliance Health doesn’t cover the lengthy and expensive treatment required for a condition like infective endocarditis, but as a tailored plan, it would.
“That’ll lead us to align our clinical and financial incentives to say, … ‘let’s do a better job preventing this next admission and getting people connected to care from the hospital to aftercare,’” Johnson said.
Funding for the uninsured primarily comes through federal grants, which are doled out by the state’s General Assembly and sometimes through the counties.
For instance, through the 21st Century Cures Act, North Carolina received millions of dollars of federal grants to address the opioid crisis. The funds make a big difference for agencies like Johnson’s. He used the money to expand access to care by increasing the number of OTP providers of services to the uninsured from one to six across all four counties within a month, he said.
The State Opioid Response grant from SAMHSA, awarded $35 million to state health officials for the 2020 fiscal year. The grant money would mostly be doled out by LME-MCOs to provide MAT, prevention and recovery services, support around opioid-use disorder for the Eastern Band of the Cherokee Indians and implementation funds for MAT in some detention and reentry facilities.
Legal settlements to fund assistance
A recent settlement between the state and drug distributors could yield an influx of up to $750 million, which would be used to address the opioid epidemic, over an 18-year period. A large portion of the funds comes from a $26 billion national settlement with pharmaceutical company Johnson & Johnson and distributors Cardinal, McKesson and AmerisourceBergen.
“The agreement we’ve reached with the counties is we’re letting each county decide how to best use these resources,” said N.C. Attorney General Josh Stein, a lead negotiator in the settlement.
The settlement is the latest in the string of agreements announced with Purdue Pharma, McKinsey Consulting, Mallinckrodt and Insys Therapeutics. According to the N.C. Department of Justice, these collective settlements represent the second largest attorney general multistate enforcement action in U.S. history.
Another roughly $100 million in settlement funding could come from Purdue Pharma, the maker of OxyContin, through a bankruptcy plan that a judge conditionally approved Sept. 1.
The plan would grant immunity from additional opioid litigation but not criminal charges to the Sackler family, Purdue Pharma’s founders and owners. The Sacklers, who aren’t bankrupt, would pay about $4.3 billion in settlements and forfeit their ownership of the drug maker.
A federal division of the Justice Department filed an appeal to block the plan on Sept. 15, saying the Sackler family’s release from liability is “unconstitutional” and “unlawful,” while a U.S. trustee for the Justice Department, filed a request for an “expedited stay” preventing the settlement from going into effect.
The funds would be distributed across the state and local governments as outlined in a memorandum of agreement: 15% to the state to be allocated by the General Assembly, 80% to counties and municipalities, and 5% to an incentive fund.
Local governments would be able to decide how to use funds to best suit their needs, by choosing from a list of strategies — which range from funding evidence-based addiction treatment to prevention work — outlined in the memorandum.
“The agreement we’ve reached with the counties is we’re letting each county decide how to best use these resources,” Stein said.
While the infusion of funds could be a substantial windfall for recovery efforts, it is not a permanent solution for uninsured and underinsured patients.
The issue with relying on grants is money inevitably runs out. “It’s feast or famine with the funding for the uninsured,” Johnson said.
For uninsured clients in North Carolina, their regional LME-MCO holds much of the authority to cover four separately funded parts of a system: labs, medications, counselors and psychiatrists. According to Johnson, Alliance Health is looking for a way to make that makeshift system sustainable.
The variability means that LME-MCOs have to make tough decisions. For instance, if clients want to get treatment through a residential program requiring patients to use detox medications, including controlled substances like buprenorphine, Alliance Health could send them out to a doctor once a month for a buprenorphine injectable called SUBLOCADE.
These shots, though covered by Medicaid, cost about $1,700 per month for the uninsured, making them unaffordable for most.
At that point, the LME-MCO has to decide whether it should spend limited funds by serving that one person, or four people seeking cheaper forms of treatment.
The question of Medicaid expansion
North Carolina is one of 12 states that hasn’t adopted Medicaid expansion. The possible expansion has been a sticking point in budget negotiations between Gov. Roy Cooper and legislative leaders in prior years. This year, Cooper again included Medicaid expansion to his proposal for the next fiscal year.
Approving Medicaid expansion would cover an additional 500,000 people across the state, according to the N.C. Department of Health and Human Services’ updated Opioid Action Plan.
“Close to 40% of people who present to the emergency department with an overdose are self-pay, indicating that they do not have health insurance,” said Catie Armstrong, spokesperson for the state Department of Health and Human Services.
Rural residents are 40% more likely to be uninsured and eligible for Medicaid expansion, according to data from the N.C. Council on Health Care Coverage.
Those who would be eligible are more likely to be younger, working for essential industries, and include many families, Armstrong added.
States without Medicaid expansion are also associated with the relatively low usage of medications for opioid-use disorder, according to a study conducted by Johns Hopkins University.
“A lot of this funding that we’re using currently to fund medications, we could use for infrastructure,” said Jesse Bennett, N.C. Harm Reduction Coalition executive director and a former IV-drug user. “Then, Medicaid would help fund medication.”
Johnson said federal funds could also be used for other areas that assist with recovery — housing, transportation, job skills and development. Medicaid expansion could help fund a “person-centered” approach to recovery that isn’t solely focused on a single substance or diagnosis, he said.
With 21st Century Cures Act funding, Bennett has glimpsed a possible future: When folks have six months of medication paid for, they can focus on the rest of their lives.
“Even if they do have a return to use or a relapse … they reengage a lot quicker, because they know that that financial responsibility on the medication side isn’t there,” he said.
A study by Alex Gertner, an addiction researcher and M.D./Ph.D. candidate at the University of North Carolina, found the rate of people with opioid use disorder who sought medication treatments, while low overall, was higher for those with Medicaid than those with private insurance. The study did not look at data on uninsured populations. This result was a surprise, he said.
“I think it’s because Medicaid has been much more responsive to the overdose crisis,” Gertner said. In part, Medicaid reimburses for treatment in a way that private insurance just hasn’t done: Some private insurers still don’t pay for some forms of medication treatment, especially methadone, instead choosing to focus on reducing opioid prescriptions, he said.
“The addiction treatment system in the United States has been so neglected for so long that no one policy unfortunately is going to fix it,” he said.
North Carolina Health News is an independent, non-partisan, not-for-profit, statewide news organization dedicated to covering all things health care in North Carolina. Visit NCHN at northcarolinahealthnews.org.
The high cost of treating addiction in North Carolina presents significant challenges for many families. With the recent wegovy supply update, there is a growing concern about how treatment expenses will be impacted. Wegovy, a drug used for weight management, has been touted for its potential benefits in addiction treatment. However, the fluctuating availability and rising costs may further strain the already limited resources for addiction recovery in the state.