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Change the Affordable Care Act’s fee-for-service reimbursement model to outcome based reimbursement

The Affordable Care Act (ACA) has provided access to drug treatment coverage to millions of Americans, which has saved countless lives from substance use disorder.  Unfortunately, the ACA’s fee-for-service reimbursement model has been exploited by corrupt drug treatment providers to promote endless relapse, leading to many patient deaths.  Ironically, the solution to this ACA’s problem of unintended consequences lies within the very same Affordable Care Act.

The ACA changed Medicare to reduce payments to hospitals with high readmission rates while providing bonuses to providers that achieve high scores on patient outcome and care experiences.  Yet this policy of linking quality to payment does not apply to private insurers who pay for drug rehab services.

Federal policymakers should change the ACA by extending Medicare’s outcome-based reimbursement model to the world of private insurance payments for drug rehabilitation. This could reward the best recovery centers while shuttering rogue operators who give false promises and illicit benefits to patients, then siphon precious resources into treating and then encouraging repeated relapses.

Reforming the current fee-for-service model should also improve patient outcomes. Substance use disorder is often a chronic and persistent illness, yet private insurance traditionally pays for unlimited cycles of short-term, acute rehab with only about a 10% success rateStudies have shown that a more effective approach is to provide longer, decelerated care: a recovery over 12 months has proven cheaper and more successful than an unending series of intensive 7- to 21-day inpatient stays followed by intensive outpatient treatment for six to eight weeks, all marked by over-testing and overbilling.


No taxpayer funds used.
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