Lesson 4: What increased funding at the state and federal level is available to address the crisis?

You must first complete Lesson 3: What clinical approaches are used to address the crisis? before viewing this Lesson

Lesson Goal


For you to become familiar with the increased funding being made available by CMS and state officials, as well as to become familiar with role of Governors and other officials in confronting the crisis.

Lesson Summary


There has been a push to increase funding for treatment and education to help lessen the impact of the opioid crisis. Significant new federal dollars are being made available, and state governors are often taking the lead role in securing those dollars.

The Big Topics in This Lesson


1- New funding to address the crisis

2- Key political leaders in the effort to fight the crisis

Lesson Video


Lesson Q & A


Click on each question to learn more

Q1: What new funding has been allocated to deal with the opioid crisis?

Increased Funding- With increased awareness of the scope of the opioid crisis, there has been an increase in program funding made available to address it.

The 21st Century Cures Act (passed in 2016) included $1B in funding to states for opioid treatment and prevention programs. The federal Substance Abuse and Mental Heal Services Administration (SAMHSA) administers the Opioid State Targeted Response grants (part of the Cures Act funding).

CMS has also begun to approve waivers specifically designed to address opioid addiction using Medicaid programs. In 2018, Illinois received $2B to pilot opioid treatment programs.


The importance of Medicaid as a provider of opioid addiction treatment- Medicaid plays a key role in fighting the opioid crisis for several key reasons:

  1. Medicaid historically has paid for more addiction treatment than all other insurance types combined.
    1. Medicaid spent $9.4B on people with opioid addiction in 2013.
    2. 24% of all buprenorphine prescriptions were paid for by Medicaid in 2016.
    3. Medicaid spends more on opioid treatment than any other HHS agency.
  2. Treatment is usually expensive, and most patients can’t afford it. Often times only those with Medicaid can access treatment since the patient does not have to cover costs
  3. Medicaid covers a wider range of services than other payers, and can be used for more comprehensive recovery plans
  4. Medicaid waivers serve as an important available financing mechanism to distribute new dollars to fight the crisis



This chart shows that Medicaid provides more access to treatment than private commercial coverage. This may be due to the significant out of pocket costs that commercial coverage members have compared to Medicaid members.


Relaxing IMD rule- One of the more critical changes in policy related to addressing the crisis is the relaxing of the long standing non-payment rule for mental institutions with larger numbers of beds for certain services (called the “IMD rule”, or “Institutions for Mental Disorders” rule). The rule was originally created in the 1970s to address another crisis – the overuse of inpatient residential facilities for patients with severe mental illness. The IMD rule prohibits Medicaid payments to residential facilities with more than 16 beds so that federal dollars are not used to further the problem of mass institutionalization of the mentally ill. Unfortunately, due the nature of detox treatment which often requires longer term stays, this rule also limits capacity for treating the opioid-addicted population.

The Medicaid Managed Care Rule (2016) and recent approval of related-waivers by the Trump administration have allowed states important exemptions to this rule to address the opioid crisis.

Q2: What role have political leaders played in dealing with the crisis?

Increased Executive Focus – President Trump and Governors have played a key role in bringing attention to the crisis in recent years. A few highlights include:

  1. President Trump appointed a commission to address the opioid epidemic and declared the crisis to be a national emergency in August of 2017.
  2. Attorney General Jeff Sessions created an Opioid Fraud Abuse Detection Unit in August 2017.
  3. Arizona Governor Doug Ducey signed a bill in the summer of 2017 that limits initial prescriptions to a 5-day supply
  4. Governors from 45 U.S. states have joined the "Compact to Fight Opioid Addiction". The compact includes agreements to coordinate efforts in dealing with opioid manufacturers and medical associations.

Medicaid Dictionary

 New Terms from this lesson:
  1. Substance Abuse and Mental Heal Services Administration (SAMHSA)-an agency within the HHS that focuses on public health related to mental illness and substance abuse.
  2. Institutions for Mental Disorders rule– The “IMD rule” prohibits Medicaid payments to residential facilities with more than 16 beds as a safeguard against federal dollars funding mass institutionalization of those with mental illnesses.
  3. Medicaid waiver– a state exemption allowance approved by the federal government with purpose to allow states to accomplish specific goals that reduce cost or improve the care of specific groups.

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