New Jersey Doubles Reimbursement Rate for Medicaid Drug Monitoring Program

By Paul Gaita 02/13/17

Doctors in New Jersey were previously reluctant to participate in the Medicaid program due to its low reimbursement rate. 

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A handshake and exchange of money.

Doctors in New Jersey who help manage patients' medication regimen will now receive double the standard reimbursement rate, thanks to the state's commitment to bolstering support for residents with addiction and mental health issues.

The NJ Department of Human Services informed provider organizations of the increase on January 31, which will allow psychiatrists to collect twice as much as they currently do for medication management, a program that assists Medicaid users to combat cravings and withdrawal through regular outpatient checkups.

The new rates earned the praise of nonprofit provider groups across the state, as well as from Governor Chris Christie, who has championed efforts to assist in addiction issues among his constituents.

Prior to the rate reform, doctors in New Jersey were reluctant to participate in the Medicaid program due to its historically low reimbursement, according to NJ Spotlight. Early last year, Christie announced that $127 million—most of which came from federal funding—would be added to the Medicaid program in an effort to boost reimbursement rates, but providers discovered that the increase only aided certain mental health and addiction services.

In some cases, such as outpatient treatments, reimbursement rates were actually lowered. Nonprofit organizations met with the state's Division of Mental Health and Addiction Services (DMHAS) to press for greater rate reductions and extend the time period for a required transition from a contract reimbursement system to a fee-for-service model.

The state agreed to allow some organizations to delay the transition until July 2017 and to grant some funding to bridge any financial gaps during the switch. A state measure to create a panel that would oversee the transition was also approved, though it has yet to be signed into law. The announcement from the Department of Human Services on January 31 eased concerns from many providers about proper coverage for medication management. 

Debra Wentz, CEO of the New Jersey Association of Mental Health and Addiction Agencies, called the move a "great step forward" and thanked the DMHAS for helping to implement the changes and make the fee-for-services model "more viable."

Under the new rates, payment for medication management services has increased from $24.63 for ten minutes to $49.06, with 40-minute sessions now reimbursed at $161.02 over the previous rate of $81.40.

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Paul Gaita lives in Los Angeles. He has contributed to the Los Angeles Times, Variety, LA Weekly, Amazon.com and The Los Angeles Beat, among many other publications and websites. 

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