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Same Medicare, Different Math
This blog is part of ASAM’s ‘Recovery Readout’ series, which breaks down the latest data and trends impacting addiction medicine and practice management.
While payments for opioid treatment programs have been annually updated to help keep pace with rising practice costs, payments for services furnished by addiction-treatment clinicians outside of OTPs have not.
Data in Focus
The proposed 2027 Medicare Physician Fee Schedule is out. On the surface, it includes several positive updates for clinicians who treat substance use disorder (SUD). The Centers for Medicare & Medicaid Services (CMS) is seeking feedback on whether to update the SUD bundled codes G2086, G2087, and G2088, as well as proposing to increase valuations for certain psychotherapy services and related services. Opioid Treatment Programs (OTPs) would also receive another positive update.
Yet, even where CMS increases the underlying valuation of addiction treatment services, the lower 2027 conversion factor that Medicare uses to set physician payment, partially offsets those gains for clinicians paid under the Medicare Physician Fee Schedule.
Not true for OTP payments, which are not calculated under the same methodology.
In fact, since Medicare began covering OTP opioid use disorder services in 2020, the non-drug component of OTP payments has received a positive Medicare Economic Index (MEI)-based update every year. Since 2021, those updates have compounded to approximately 21%. 1, 2
Data Disconnect
The story is different for clinicians treating addiction in outpatient settings outside OTPs.
Over the same period, modeled Medicare payment for a representative basket of services3 furnished by those clinicians increased by only about 5%.
A key structural reason is straightforward. Medicare updates the non-drug component of OTP payments annually using the MEI, which measures changes in medical practice costs. The MPFS does not include a comparable permanent MEI-based update, although the American Medical Association and other stakeholders have called for one.
Table 1 compares the annual MEI-based OTP update with the year-over-year change in payment for a representative basket of MPFS services furnished by addiction treatment clinicians. The final column shows the percentage-point gap between the MEI-based OTP update factor and the modeled MPFS fixed-basket payment change.
Table 1: Annual MEI vs. MPFS Payment Change
| Payment Year | MEI-Based OTP Update | MPFS Basket Change | Difference |
| 2022 | +2.1% | +2.4% | +.3 pp |
| 2023 | +3.8% | +0.2% | -3.6 pp |
| 2024 | +4.6% | +2.6% | -2.0 pp |
| 2025 | +3.5% | -2.1% | -5.6 pp |
| 2026 | +2.7% | +3.6% | +0.9 pp |
| 2027 proposed | +2.5% | -1.8% | -4.3 pp |
| Cumulative Changes | +20.8% | +4.9% | -15.9 pp |
The annual differences may appear modest, but they compound. As an illustrative example, from 2021 through proposed 2027, the representative MPFS basket generated approximately $15 million less in modeled payment than it would have if payment had kept pace with MEI. By proposed 2027 alone, the modeled annual gap reaches approximately $5 million. 4
Zoom Out
Digging deeper, there are some other notable observations from this exercise, including:
- We do not have a great way to identify everyone treating addiction in the Medicare program. No single Medicare specialty or taxonomy captures all clinicians treating SUD. Using multiple identifiers, ASAM’s analysis identified 665 clinicians providing addiction treatment in 2024.
- E/M visits are still king among Medicare payments for the identified cohort. Office and outpatient E/M services accounted for nearly 40% of the ASAM cohort’s Medicare payments.
- Addiction treatment clinicians provide substantial ongoing medical management services. CPT code 99214 (established patient office visit, moderate level of decision-making/30 minutes or more of time) was the most billed code among the identified cohort.
- Psychotherapy and care management services. Psychotherapy codes in the top 20 codes billed by the cohort accounted for about $2.2 million, while chronic care-management codes accounted for another $2.1 million.
- Medicare's dedicated SUD bundles remain a relatively small part of the cohort’s billing. ASAM pointed out last year that there is low utilization and likely structural barriers related to these codes. In 2024, nearly 79% of the identified clinicians billed 99214, compared with about 20% who billed G2087 and just 1% who billed G2086.
The Impact
These observations raise some important questions. First, can targeted investments in individual codes as CMS has done in recent years (and plans to do in 2027) outpace the downward payment trajectory of Medicare’s physician payment system? This analysis suggests no. While CMS has made investments in G2086–G2088, those changes can only go so far when nearly four in five clinicians identified in this analysis billed 99214 in 2024, compared with about one in five who billed G2087 and just 1% who billed G2086.
Second, the number of Medicare-enrolled OTPs and the number of addiction treatment clinicians identifiable under ASAM’s claims-based methodology followed a different trajectory.
Looking at table 2 below and the current CMS OTP enrollment file, OTPs with Medicare ID effective dates by year-end increased at a steady pace every year from 2021 through 2024, culminating in a cumulative growth of 16%. On the other hand, the number of clinicians identified under ASAM's methodology was less steady, declining nearly 9% in 2023 before rebounding in 2024. Overall, ASAM’s cohort grew about 11%, roughly 5 percentage points less than Medicare OTP enrollment.
While these numbers cannot tell us whether Medicare’s payment policies influenced these trajectories, they do raise another question. Is CMS doing enough to ensure addiction treatment is financially sustainable outside of OTPs?
Table 2: Trends in Medicare OTP Enrollment and Identified MPFS Addiction-Treatment Clinicians, 2021–2024
| Year | Medicare OTPs enrolled by year-end* | Annual growth | Identified MPFS addiction-treatment clinicians | Annual growth |
| 2021 | 1,007 | — | 600 | — |
| 2022 | 1,061 | +5.4% | 619 | +3.2% |
| 2023 | 1,112 | +4.8% | 564 | -8.9% |
| 2024 | 1,170 | +5.2% | 665 | +17.9% |
| 2021-2024 cumulative growth | — | +16.2% | — | +10.8% |
*OTP counts represent providers appearing in CMS’s current OTP enrollment file with a Medicare ID effective date on or before the end of each year. They are not historical enrollment snapshots and may exclude providers that were previously enrolled but no longer appear in the current file. MPFS clinician counts reflect clinicians identified using ASAM’s methodology and should not be interpreted as a complete count of all clinicians treating SUD in Medicare.
Takeaways
The analysis highlights several opportunities for CMS and policymakers. Here are some things that could meaningfully change the picture painted by this analysis:
- Apply the MEI update to the MPFS. CMS could not do this without an act of Congress, but this analysis provides another example of why it matters. From 2021 through proposed 2027, the MEI-based update factor used for OTP non-drug payments compounded by about 21%, while modeled payment for the representative basket of services furnished by addiction treatment clinicians increased only about 5%.
- Make the SUD bundled payments work better for clinicians. Utilization remains limited for G2086–G2088, particularly for G2086. CMS has asked for feedback on these codes, including whether additional coding is needed, in the proposed 2027 rule. This is an important first step in examining whether the structure and requirements of these codes create barriers to their use and whether additional changes are needed to make them a viable payment pathway for office-based addiction treatment.
- CMS could improve how it identifies the addiction treatment workforce. Medicare already has an Addiction Medicine specialty code, but it does not capture many of the clinicians identifiable through addiction medicine taxonomies or claims. Better coordination among Medicare specialty designations, provider taxonomies, and claims-based indicators could give policymakers a clearer picture of who is providing addiction treatment. Better coordination could also help CMS more accurately track the addiction treatment workforce, assess access to care, strengthen, and assess the impact of its program integrity efforts by giving CMS a more accurate baseline for distinguishing expected patterns of addiction care from anomalous billing.
- Addiction treatment faces a growing practice sustainability concern in Medicare. The Medicare payment trends documented here come as clinicians and practices prepare for other significant changes to the health care financing landscape, including implementation of Medicaid community engagement/work reporting requirements. For practices treating patients in either federal program, those pressures could increasingly affect whether providing addiction treatment is financially sustainable.
About the analysis
ASAM identified a cohort of 665 clinicians providing addiction treatment to Medicare beneficiaries in 2024 using Medicare specialty designation, addiction medicine and addiction psychiatry taxonomy codes, and Medicare claims for selected addiction treatment and related services. 5, 6 Clinicians could qualify through multiple identification pathways, and NPIs were deduplicated across pathways. ASAM then identified the 20 services on the Medicare Physician Fee Schedule that accounted for the greatest Medicare payments among this cohort. Because clinicians may furnish addiction treatment using standard E/M codes without billing one of the selected addiction-related services, this approach may not identify every clinician treating SUD in Medicare.
To isolate changes in Medicare payment policy, ASAM held the 2024 service volume and mix constant and repriced this basket using the Medicare payment rules applicable in each year from 2021 through proposed 2027. The analysis incorporates annual conversion factors, including applicable congressional adjustments, as well as code-specific payment changes and site-of-service differences.
The modeled MPFS payment trajectory was then compared with a counterfactual in which the 2021 basket increased annually by the Medicare Economic Index (MEI), consistent with the inflationary update CMS applies to the non-drug component of OTP payments.
These estimates are intended to illustrate changes in Medicare payment policy and do not represent actual historical Medicare spending by these clinicians in each year.
Use of artificial intelligence
Generative AI tools were used to assist with Python coding, extraction and organization of CMS data, and calculation checks. ASAM staff directed the analysis, reviewed the underlying source files and outputs, made all methodological adjustments, and edited and approved the final approach.
1 ASAM calculated this increase by applying each year’s MEI update cumulatively to a 2021 baseline, consistent with CMS’s methodology for updating the non-drug component of OTP payments.
2 OTP payment methodology: ASAM used 2021 as the baseline year and applied CMS’s annual MEI updates for the non-drug component of OTP payments: 2.1% for 2022, 3.8% for 2023, 4.6% for 2024, 3.5% for 2025, 2.7% for 2026, and 2.5% proposed for 2027. Because these updates are applied sequentially, they compound to approximately 20.8% from the 2021 baseline through proposed 2027.
3 Representative MPFS basket: ASAM identified the 20 MPFS services accounting for the greatest total Medicare payments among the 2024 cohort of identified addiction-treatment clinicians. The basket therefore reflects the services that were most financially significant to these clinicians in 2024, rather than a predetermined list of addiction-specific codes. ASAM held the 2024 service mix and volume constant and repriced those services using the Medicare payment rules applicable in each year from 2021 through proposed 2027. This approach isolates changes in Medicare payment policy from changes in service utilization or clinician volume.
4 Modeled payment gap: ASAM calculated the payment gap by holding the 2024 claims volume and mix of services in the representative MPFS basket constant across all years. The basket was first priced using actual Medicare payment rules for each year from 2021 through proposed 2027, including annual conversion factors and applicable code-specific adjustments. ASAM then constructed a counterfactual in which the same 2021 basket was instead increased annually by the MEI. The approximately $15 million represents the cumulative difference between these two modeled payment trajectories from 2022 through proposed 2027; the approximately $5 million represents the difference in 2027 alone. These figures are modeled estimates and do not represent actual foregone Medicare payments or historical spending.
5 Clinician identification methodology: ASAM identified clinicians using three overlapping pathways: (1) Medicare specialty 79 (Addiction Medicine); (2) addiction-related NPPES taxonomy codes, including addiction medicine and addiction psychiatry; and (3) claims indicating direct addiction treatment. For the specialty and taxonomy pathways, clinicians were required to appear in Medicare claims for at least one selected addiction-treatment or related service, including the G2086–G2088 SUD bundles, injectable buprenorphine or naltrexone, psychotherapy, drug or alcohol testing, injection administration, and visit-complexity services. The direct treatment claims pathway included G2086–G2088 and selected injectable addiction medications. NPIs meeting more than one criterion were counted only once. OTP and SBIRT services were excluded. Because clinicians may provide SUD treatment using standard E/M or other services without billing one of the selected services, this methodology may not identify every clinician treating SUD in Medicare.
6 Selected services: G2086–G2088; J2315; Q9991–Q9992; J0576–J0578; 90833, 90836, 90838, and 90853; 80305–80307; 82075; and 96372: and G2211. Availability of certain injectable buprenorphine codes varied by year.