Private Coverage of Methadone in Outpatient Treatment Programs

The first step is to ensure that methadone treatment is a covered service in commercial health plans. Although some commercial insurance carriers have expanded coverage of methadone in some areas or plans, we encourage even more to follow suit, particularly those insurers who serve the communities hardest hit by the opioid epidemic. Given that methadone is one of the most frequently excluded or not explicitly covered treatment benefits for substance use disorder, insurance plans providing coverage for this medication should clearly state that methadone is a covered medical benefit in the plan’s evidence of coverage. Furthermore, an insurer directive to cover methadone is not sufficient; employer clients can dictate coverage policies managed by insurers. Insurance companies should educate their employer clients to help them overcome reticence to covering methadone.

Employer clients are an important constituency if coverage policies are to include methadone because most beneficiaries of private insurance receive employer-sponsored insurance. Most employer-sponsored coverage comes from employers who are self-insured, meaning the insurance company acts as the administrator of the health plan. In these cases, the employer has wide latitude in determining what services are covered in the plans that are offered to employees. Even if an insurance company sets internal policy to cover methadone or if the federal government sets parity policies that support treatment for mental and substance use disorders, employers are not required to cover these services, and many do not. Many employers may believe that covering methadone exposes them to conflict or controversy. Although this effective treatment can help employees live healthier, more functional lives and can reduce additional medical costs, stigma around addiction in general and methadone use specifically may prevent employers from viewing methadone as an appropriate treatment option, especially in job settings that involve driving or use of heavy machinery. These attitudes have inhibited changes to methadone coverage by self-insured employers. In addition, unlike state or federal policy changes, changes to employer coverage would likely occur one employer at a time, if at all. Although this transition would take some time, employers must embrace methadone coverage if expansions in coverage are ever to take hold.

In some cases, plans that cover methadone require prior authorization to ensure the treatment is medically necessary before it is approved (6). This requirement can delay access to the first dose, in some cases by more than a day—critical time that could result in relapse or even death for those suffering from opioid use disorder (7). The payers we interviewed described efforts to reduce prior authorization for medications, especially in trusted high-quality programs, but these efforts did not appear to be universal, indicating room for improvement.

When methadone treatment is covered by insurance and an individual has access to an OTP that accepts the insurance, there still may be other cost factors prohibitive to methadone access. Specifically, coverage for methadone maintenance typically sits within a traditional medical or behavioral health benefit whereby each specialist visit is subject to a copay. If the copay for each visit ranges from $10 to $35 or more, for the 20 visits needed for a month of treatment, copays alone could run over $700. This cost may be an insurmountable barrier for those trying to access treatment or may deter patients from using their insurance. Instead, patients may choose to pay out of pocket and incur a total monthly cost (about $126 per week) that is likely to be less than the cumulative copays. If methadone were instead available as a prescription, similar to buprenorphine-based medications, and covered under the pharmaceutical benefit, there could be a single copay for each prescription, usually spanning multiple days or weeks, resulting in lower out-of-pocket costs. Alternatively, a single bundled payment for a weekly or monthly course of methadone treatment could reduce out-of-pocket costs for patients while encouraging high-quality, comprehensive care.

Even if an individual’s health insurance covers methadone, the treatment may be hard or impossible to access in his or her geographic area. Although commercial payers reported covering methadone, they suspected treatments rates to be very low. This is, in part, due to scarcity of in-network methadone providers in many areas. In these cases, a candidate for methadone treatment would have to decide whether it would be worth the cost of out-of-network care or a long daily drive for treatment (8). These barriers may prevent patients from using methadone treatment at all, even when it may be the best option. Increasing provider reimbursement can create incentives for providers to offer methadone treatment and to participate in the insurer’s provider network (9).

Payers should examine their beneficiaries’ access to methadone treatment and leverage findings to inform creative solutions. For example, if a payer finds that there are several OTPs in a given geographic area, but these programs do not accept insurance, it may be because the reimbursement rates are not adequate or the contracting process introduces administrative complexities for the treatment programs that can be avoided by billing out of pocket. In these cases, payers may be able to create solutions in partnership with the OTPs. If no OTPs are in the area, payers may choose to work with state and community partners to identify reasons behind the shortage of providers and to implement solutions.