Medicaid plays a role in addressing the substance use disorder (SUD) crisis, particularly for low-income Americans. Federal laws require Medicaid to cover a range of addiction treatment services, making it a primary payer for behavioral healthcare. Because Medicaid is administered at the state level, the precise services and the number of facilities that accept it vary significantly by state. Understanding the federal mandates and practical steps for finding care is essential for accessing treatment.
The Scope of Medicaid Coverage for Addiction Treatment
The foundation of Medicaid’s coverage for SUD services was established by the Affordable Care Act (ACA), which designated substance use disorder treatment as one of the ten Essential Health Benefits (EHBs). This means all new individual, small group, and Medicaid expansion plans must cover these services, ensuring a baseline level of care. This requirement encompasses a continuum of care, including assessment, counseling, and Medication-Assisted Treatment (MAT).
Federal law mandates that this coverage must comply with the Mental Health Parity and Addiction Equity Act (MHPAEA). This act requires that the financial requirements (such as co-pays and deductibles) and the treatment limits for SUD services cannot be more restrictive than those applied to medical or surgical benefits. For example, if a plan does not require prior authorization for a standard medical procedure, it cannot require one for a comparable SUD treatment service.
While federal law requires coverage for core services, states retain flexibility in determining which services are covered beyond the EHB framework. States must cover mandatory services, but they may choose to include optional services, such as specific types of residential treatment or peer support services, in their state plan. This state-level discretion means a service available in one state may not be accessible in a neighboring one.
Finding In-Network Treatment Providers
To find a facility that accepts Medicaid, use the federal Substance Abuse and Mental Health Services Administration’s (SAMHSA) Behavioral Health Treatment Services Locator. This national directory allows users to filter results specifically for facilities that accept Medicaid, providing a direct path to in-network providers. However, it is always best to double-check the facility’s acceptance status directly due to the dynamic nature of insurance contracts.
A challenge in finding residential treatment is the Institutions for Mental Disease (IMD) exclusion, a federal rule that prevents Medicaid from paying for services for most adults aged 21 to 64 in residential facilities with more than 16 beds. To bypass this exclusion, more than 35 states have received federal Section 1115 waivers. These waivers allow states to use federal Medicaid funding for short-term residential SUD treatment, greatly expanding the number of facilities that can serve beneficiaries.
Specific types of outpatient care are widely covered by Medicaid, including Intensive Outpatient Programs (IOP) and Partial Hospitalization Programs (PHP). Opioid Treatment Programs (OTPs), often called “methadone clinics,” are also major provider types and must be certified by SAMHSA. Medicaid covers all three FDA-approved medications for Opioid Use Disorder (OUD)—methadone, buprenorphine, and naltrexone—with most states including these medications with minimal or no cost-sharing.
The Enrollment and Verification Process
Medicaid is administered by each state, meaning eligibility criteria and the application process vary, though income requirements are set by federal guidelines. For individuals not already enrolled, the first step is applying through the state’s Medicaid agency or the Health Insurance Marketplace. Eligibility for treatment services, especially for residential or high-intensity programs, is determined through a clinical assessment using standardized criteria, such as the American Society of Addiction Medicine (ASAM) criteria, to certify the appropriate level of care.
Once enrolled, the beneficiary must determine if their state uses a Fee-for-Service (FFS) model or a Managed Care Organization (MCO) model. FFS plans allow direct access to any enrolled provider, while MCOs contract with a specific network of providers, requiring the beneficiary to work within that network. In both models, prior authorization (PA) may be required for higher-intensity services, like residential treatment or certain medications, to ensure medical necessity.
Beneficiaries must be aware of the need for an annual redetermination or renewal of their eligibility. States are federally required to review a person’s eligibility periodically, and failure to respond to renewal notices can result in an unexpected loss of coverage. Contacting the state Medicaid office or the MCO directly to verify coverage and understand any prior authorization requirements before starting treatment is the most important administrative step.