Recovery House CEO urges new definitions and Medicaid rate review for residential substance use disorder treatment; committee considers adding language to draft

Chad Vijay, chief executive officer of Recovery House ACH and president of the Vermont Substance Use Treatment Collaboratives, presented proposed language to the Senate Health & Welfare committee on March 14 to change statutory terminology and to require a Medicaid payment-model review for residential substance use disorder treatment services.

Vijay proposed replacing the term "long-term residential treatment" with "high intensity residential treatment for substance use disorder and co-occurring conditions," and separating "low-intensity residential treatment" as a distinct category. He asked the committee to reaffirm that treatment providers determine appropriate length of stay and to require rate reviews that account for the actual cost of care, co-occurring medical and mental health needs, and "environmental needs" that affect recovery, such as homelessness or hazardous home environments.

"The reimbursement rate should reflect that," Vijay said, describing circumstances that require longer or more resource-intensive care for some patients. When asked to clarify "environmental needs," Vijay said those needs include homelessness, a loved one in the home who is actively using substances, and other environmental hazards that require additional resources to address during recovery.

Legislative counsel (Caden Glenn) told the committee that the Agency of Human Services had requested a date of Dec. 1 for a review and report back on aligning Medicaid payment models to clinical needs and transitions across levels of care. Glenn summarized the draft language he had integrated from agency materials and Vijay's memo: the AHS review would "include recommendations and proposed legislation to align the Medicaid payment model with clinical needs of individuals receiving residential substance use disorder treatment services and ensure coordinated transitions between residential substance use disorder treatment providers offering varying acuity of care," and the report would be submitted to the House Human Services and Senate Health & Welfare committees on or before Dec. 1.

Committee members discussed whether to add statutory definitions in Title 33 and whether to combine Vijay's proposed language with the agency's requested review. One committee member asked whether 30 or 60 days are appropriate lengths of stay; Vijay and other presenters said length of stay should be variable and driven by clinical need, not a fixed statutory day count. The committee asked staff to draft option language that would place Vijay's definitions in Title 33 and to include the rate-review study in the bill's language so the two approaches are coordinated.

Why it matters: the proposals seek to align Medicaid reimbursement with clinical complexity and transitional needs for people receiving residential treatment, recognize provider discretion in determining length of stay, and require a state review of payment adequacy. The committee did not adopt final statutory language on March 14 and directed staff to produce redraft options and to coordinate timing with other committee work.