Does Medicaid Institutions for Mental Diseases Exclusion Waiver Crowd Out the Access to Treatment Among Commercially Insured Substance Use Disorder Patients? An Empirical Study Using Commercial Insurance Claims Data

Introduction: Medicaid payment exclusion waivers for substance use disorder (SUD), as part of the Section 1115 demonstration program, allow states to pay for SUD-related services received in institutions for mental diseases (IMDs). As of the end of 2020, 28 states obtained such waivers. Due to the limitation in treatment capacity and long treatment cycle, questions are raised about the potential crowd-out effect of expanding Medicaid benefits on commercially insured patients. This paper examines whether adopting Medicaid IMD exclusion waivers crowds out the access to treatment of commercially insured SUD patients. Methods: The study uses a synthetic control difference-in-difference approach to examine the waiver effect, with commercial insurance claims data during the period 2012-2020. The analysis is repeated for SUD patients with mental health comorbidities and compares the differences between the two groups of patients. Results: In general, commercial plan enrollees use more outpatient SUD treatment (41.5%) compared to inpatient or residential (14.9%) and intensive outpatient/partial hospitalization (1.4%). Instead of finding a crowd-out impact on access, the findings suggest adopting an IMD SUD waiver contributes to a 0.2 percentage point increase in access to intensive outpatient or partial hospitalization treatment services among commercially insured SUD patients. No impact is found on access to inpatient, outpatient, and medication-assisted treatment. Conclusions: This study offers insights into access to treatment among commercially insured SUD patients. It provides evidence of the importance of Medicaid policies in shaping the treatment market beyond the Medicaid population.