Specific Recommendations Recommendation 11

Pass substance abuse parity legislation.

Providing parity for substance abuse services in North Carolina is arguably the most important legislation that the General Assembly could pass to enhance the long-term prospects of developing a complete and accessible substance abuse service system. Parity is of course a largely political issue that will be achieved (or not) through the General Assembly’s normal political processes. It is also an issue that is likely to be influenced by legislators’ critical review of insurance industry claims that often describe (contrary to current research) substance abuse parity as “just too expensive.” If there is the political will to pass such parity legislation this legislative session, congratulations are due to North Carolina political leaders for expanding access to such a key and cost- effective health care service.

" Recommendation 11.1.1

Mandate an evaluation of substance abuse parity in the North Carolina State Employee Plan.

If there is not the political will to pass such parity at this time, then we highly recommend that the General Assembly, at minimum, inform the process with data and mandate an evaluation of the North Carolina State Employee Plan, which now has accumulated a sizable amount of data on the cost of including substance abuse parity.

Recommendation 11.2

Implement a multiprong substance abuse services funding strategy.

To build the necessary regional continuums of substance abuse services, North Carolina should consider developing a multiprong funding strategy to supplement its standard funding strategies. Below are some strategies we believe the state should consider to generate stable funding sources for providing accessible substance abuse services to all of its citizens.

Substance Abuse System Recommendations

" Recommendation 11.2.1

Utilize an alcohol sales tax to provide ongoing and stable funding for substance abuse services.

As of the writing of this report, the General Assembly is considering devoting some of the proceeds of an increased state alcohol tax to the DMHDDSAS and to the substance abuse service system. We support this effort and believe it is an appropriate use of these new potential revenues. Consideration should be given to these revenues being stable funding sources over time. Additionally, consideration should be given to the idea that specific percentages of funding be directed to the substance abuse services system development given that the tax is based on sales of the most abused drug in North Carolina.

" Recommendation 11.2.2

Utilize Medicaid options to expand services for those with substance abuse problems.

The Balanced Budget Act (1997) gave the states greater flexibility in many ways, including increased flexibility in designing and implementing managed care-related strategies and in providing services to consumers. The state should examine whether this increased flexibility can be used to expand the number of substance abuse-related services that are supported through Medicaid and/or to utilize selected managed care-related strategies to improve the quality of services provided.

" Recommendation 11.2.3

Mandate an evaluation of potential legislative changes in insurance regulations to increase coverage options for those with substance abuse disorders.

Insurance regulations, policies, and practices can create barriers to accessing needed substance abuse services. Common barriers include unrealistic annual or lifetime limits on coverage, lack of coverage for certain needed services, and so forth. We recommend that the General Assembly mandate an evaluation of potential legislative changes in insurance regulations that would increase coverage options for those with substance abuse disorders.

" Recommendation 11.2.4

Promote support of substance abuse services by the North Carolina business sector.

North Carolina businesses—large and small—experience the impact of substance abuse in terms of lost productivity, increased health care costs, increased sick time, and so forth. It is in the best interest of the business community to help address this problem with their employees and in the communities where they conduct business. The state and interested others should explore all opportunities for fully engaging the business community in being an active partner in the prevention and treatment of substance abuse in North Carolina.

Substance Abuse System Recommendations

Page 4-41

" Recommendation 11.2.5

Direct savings generated from diversion of substance abuse- related admissions from state hospitals to development of ADATC and community resources.

The diversion of over 3,000 admissions per year of those with primary substance abuse problems from state hospitals will potentially produce significant savings in the state hospitals in terms of reduction of staff and the possible closing of wards.7 If this were to occur, the General Assembly or DHHS should redirect some of those cost savings and/or staff positions—directly or indirectly—to support expansion of ADATC capabilities.

Additionally, we believe it would be appropriate for any Olmstead- related transition funds that may be made available at a future time to initially be directed to assisting the transfer of substance abuse admissions from state hospitals to ADATC or community resources, because the funds would help support the creation of an immediate and cost-effective solution to what has been an intractable system problem.

" Recommendation 11.2.6

Seek innovative sources of funding and strategies to address the complex needs of indigent individuals with severe addictive disorders.

One of the greatest challenges of the public substance abuse service system is effectively providing and managing services for indigent individuals. These individuals have a large impact on community life (e.g., homelessness), and they are some of the hardest to treat successfully with existing services and systems. To better meet the need of indigent individuals with serious and persistent substance abuse problems, considerations should be given to a variety of innovative financial and clinical management strategies to achieve better outcomes with this population. These possibilities include:

! setting aside indigent funds at the state and local levels. Funds are currently lumped together and the only “attention-getting” fund for providers is Medicaid due to its stability (indigent funds could theoretically have the same visibility);

! incorporating the indigent populations as targeted population and holding the local programs accountable for service outcomes;

It is not likely that wards will be closed due to the diversion of substance abuse admissions, despite the fact that they represent about 20 percent of admissions. Current admission wards are quite overcrowded, leading to much use of overtime and use of expensive nursing agencies to supply nurses. Our interviews and analyses suggest that it is difficult to predict with accuracy the ultimate ramifications of the successful diversion of substance abuse admissions. However, analysis of the numbers suggest that such a move would likely reduce client levels in Admission wards to normal capacity (or even below) and thus save money in terms of reduced use of overtime and of expensive nursing services, but not to the closing of wards.

Substance Abuse System Recommendations

! developing collaborative projects with industry, schools, juvenile justice, criminal justice, and public health, and then leveraging the monies already spent in the public and private systems to achieve better outcomes; and

! seeking national foundation money to conduct pilot projects that can demonstrate the cost-effectiveness of different strategies for serving this population effectively.

4.7

Recommendation 12

Implement previous SAS overall substance abuse system recommendations.8 4.7.1 Goal

Incorporate past substance abuse services development plans into the current reform effort.

4.7.2 Findings

The following 12 overall system recommendations are a combination of policies to be adopted, services to be developed, training to be provided, and standards to be maintained. Some are of these recommendations are incorporated to some degree into our current recommendations; others are not. Each should be reviewed and implemented as necessary.

4.7.3 Specific Recommendations