Amid opioid epidemic, Minnesota seeks expanded Medicaid dollars to treat drug addiction

In response to a surge of opioid-related deaths, the Dayton administration is seeking federal permission to expand the use of Medicaid funding for residential drug treatment centers across the state.

This week, Minnesota joined a growing list of states requesting an exemption, or "waiver," to a 1960s-era rule that prohibits the federal-state Medicaid program from funding care at residential addiction treatment facilities with more than 16 beds. President Donald Trump and others have criticized the rule as an antiquated barrier to caring for millions suffering from drug addiction.

The request, if granted, would enable millions in new federal Medicaid dollars to flow to larger addiction-treatment facilities in Minnesota, and it would make services available to more low-income people who have been disproportionately affected by the escalating opioid epidemic. It would also encourage existing centers to expand and reduce long waits for admission into treatment centers. Currently, people can languish two months or longer on waiting lists.

"We have an addiction public health crisis, and this is one way to move us forward, by treating addiction like a chronic disease that requires multiple levels of care," said Claire Wilson, assistant commissioner for community supports at the Minnesota Department of Human Services, which submitted the waiver application.

Minnesota's waiver request is part of a broad package of changes as state and county agencies step up efforts around addiction treatment and prevention. This includes a more streamlined process for determining whether people struggling with addiction qualify for publicly funded care; as well as expanded Medicaid benefits for community-based services, such as care coordination and "peer recovery" support.

The changes come as the state struggles to contain a spike in the rate of deaths related to drug overdose. In 2016, 637 people died from drug overdose, up from 384 in 2010, according to the Minnesota Department of Health. In 2010, fewer than 10 people in Minnesota died from heroin overdose; by 2016, that number grew to 142.

Treatment centers across the state have eagerly anticipated the waiver request. They have been reluctant to expand until access to federal Medicaid funding is more certain.

Karina Forrest-Perkins, chief executive of Wayside Recovery Center, a St. Louis Park-based nonprofit, said lifting the 16-bed limit would enable her organization to more than double its treatment capacity. Currently, Wayside has a total of 61 beds at its two residential treatment centers in the Twin Cities for women and families with substance use disorders.

If the state's waiver request is approved, Wayside would begin construction "within months" and expand to more than 120 beds, she said.

Such an expansion would mark an end to Wayside's long waits for treatment, Forrest-Perkins said. At any point, about 70 to 100 people are waiting for admission there. In some extreme cases, people have not survived the long waits, she said, and have died of overdose while waiting their turn for treatment.

"This could save lives by giving people in crisis immediate access to care," Forrest-Perkins said of the state's waiver request. "As it stands, our ability to meet the demand for (treatment) services is limited by an archaic federal rule that has deadly implications."

That rule was intended to prevent federal Medicaid funds from covering treatment in large state psychiatric facilities, which were far more common when the law was written in 1965. Federal officials at the time were trying to reduce the large population of people confined in these institutions, where they were often subjected to barbaric treatment methods and inhumane living conditions. The 16-bed limit was intended to promote smaller, community-based mental health and addiction treatment centers.

Trump signaled his opposition to the decades-old provision in a speech at the White House last fall, in which he declared the epidemic of opioid abuse "the worst drug crisis in American history" and pledged to give states more flexibility to fight the crisis. As part of his emergency response, Trump pledged to introduce a new policy that would overcome the rule limiting Medicaid payments to certain treatment facilities with more than 16 beds.

Previously, the federal government had encouraged states to seek a waiver of this rule, provided that the care is offered as part of a comprehensive array of community services. All told, 11 states — California, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Maryland, New Jersey, Utah, Virginia, and West Virginia — have received the waiver, freeing up federal Medicaid dollars for addiction treatment in larger facilities.

Minnesota's waiver request encompasses more than just the 16-bed rule. The state is also seeking to extend Medicaid funding for a promising new treatment program that provides "one-stop shopping" for mental health and substance abuse treatment. Under the pilot program, patients are given access to a team of specialists who provide a range of services, including outpatient counseling, primary care screening and family support.

Since its launch last year, that program has been remarkably successful in providing coordinated care to thousands of Minnesotans with a range of disorders, including mental illnesses and substance use disorders, through a statewide network of community clinics. However, the Medicaid-funded pilot program was set to expire by July of next year. Minnesota's waiver request would extend the funding through June 2023.

"This is a major opportunity for us to build and grow our mental health [system] in our state, ensuring that individuals have access to these critically important services," said Jin Lee Palen, executive director of the Minnesota Association of Community Mental Health Programs, a St. Paul-based nonprofit that represents a statewide network of 32 mental health programs.

State officials said they expect to receive approval for the waiver request by July 1.

Chris Serres • 612-673-4308 Twitter: @chrisserres