Billing for addiction treatment Medicaid patients in Texas is relatively straight-forward as long as you follow a few simple rules. Sadly, Texas does have an issue with low reimbursement rates for addiction treatment services that makes Medicaid billing more trouble than it’s worth for many providers. More on that below. 

If you are undeterred, then you’ll find that Medicaid in Texas is most compatible with less resource-intensive services like outpatient treatment/IOP and MAT. Residential treatment and other higher dollar services will require a few more hoops for Medicaid patients that you’ll need to be aware of in order to bill successfully in Texas. 

What are Medicaid reimbursement rates like for mental health services in Texas?

Recent proposed legislation in Texas has so far failed to remedy the low reimbursement rates for mental health services in the state. Not only do low reimbursement rates affect the profit margin of addiction treatment centers and programs in Texas, but they also limit the number of providers even offering these services to Medicaid patients. In this sense, low reimbursement rates for services are a problem for both providers and patients. 

House Bill 1879 attempted to allow pre-licensure social workers and counselors to accept Medicaid patients, which would have effectively widened the provider pool for patients, but even that failed to pass the Texas Senate.

Does Texas Medicaid - including CHIP, STAR and STAR+PLUS - cover addiction treatment services? 

Yes, all Texas Medicaid programs cover addiction treatment services. In Texas, Medicaid is administered through several different health plans, including Children’s Health Insurance Program (CHIP), STAR and STAR+PLUS.

STAR is the largest managed care program representing Medicaid in Texas. It’s for low-income children, pregnant women and families. STAR+PLUS is for seniors and adults with disabilities.CHIP covers families who earn too much income to qualify for STAR but still need help with covering the cost of health insurance. 

Be sure to check that Medicaid patients have current coverage during your admissions process. As part of Medicaid unwinding, Texas recently ejected over 500,000 people from their Medicaid program over the course of a single month. Texas is one of the few states that has not expanded Medicaid coverage to bring the program in alignment with federal guidelines. Because of this state-level choice, many people who otherwise would receive Medicaid coverage must go without, further reducing access to addiction treatment services as well as mental health services for low income people in Texas. 

What addiction treatment services does Texas Medicaid cover?

According to the Texas Medicaid Provider Procedures Manual, Volumes 1 and 2, published in November 2023, Medicaid in Texas covers many different levels of care for the treatment of Substance Use Disorder, including: 

• Withdrawal management 

• One-on-one and group counseling 

• Outpatient treatment 

• Residential treatment 

• MAT or medication assisted treatment 

• SUD evaluation and co-occurring disorders evaluations

Interestingly, Texas Medicaid does not cover any treatment services for tobacco use disorder as a primary diagnosis. However, for SUD patients with a secondary diagnosis of tobacco use disorder who want to quit or reduce their smoking as part of their overall SUD treatment plan, smoking cessation services are covered.

What addiction treatment services require prior authorization for Medicaid patients in Texas?

Again, according to the Texas Medicaid Provider Procedures Manual, these four services require prior authorization for Medicaid patients in Texas: 

• Outpatient withdrawal management 

• Residential withdrawal management 

• Outpatient treatment for patients who have already exceeded the benefit limit

• Residential treatment services of any kind 

What addiction treatment services do NOT require prior authorization for Medicaid patients in Texas?

These three services don’t require prior authorization for Medicaid patients in Texas:

• Assessment

• MAT 

• Outpatient treatment

Are Peer Specialist Services for addiction treatment covered under Texas Medicaid programs?

Yes. Peer specialist services may be billed under H0038 for Texas Medicaid patients. 

In Texas, peer specialist services for SUD treatment may include: 

• “Recovery and wellness support services” (ie recovery planning and relapse prevention-type work)

• Mentoring, particularly around how to access and participate in community resources and services 

• Advocacy and responsive support, particularly around obtaining services, as well as helping get patients connected with treatment programs and other community-based supports 

Is recovery housing or sober living covered under Medicaid programs in Texas? 

No. 

In general, Medicaid coverage does not extend into recovery housing because it is not considered an official part of the “continuum of care” by ASAM. 

However, some organizations operate both sober living homes as well as outpatient treatment programs, billing Medicaid for the outpatient treatment portion and seeking alternative reimbursement for the room and board portion of their services. 

Billing Medicaid for Addiction Treatment in Texas? Behave Health is here to help.

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PS. Just getting started with behavioral health? Need help with certification, too? Behave Health can also help direct you to the right resources for help with Licensing or Accreditation by either The Joint Commission or CARF. Mention to your product specialist that you’re interested in this service after you start your free trial!