REVOLVING DOOR FOR ADDICTS ADDS TO MEDICAID COST

With grim humor, some doctors in New York call them "frequent fliers"
- -- addicts who check into hospital detoxification units so often that
dozens of them spend more than 100 nights a year in those wards.

Through its Medicaid program, New York spends far more than other
states on drug and alcohol treatment, including more than $300 million
a year paid to hospitals for more than 30,000 detox patients. One
reason for the high cost is that $50 million is spent just on the 500
most expensive patients, at a cost of about $100,000 a person. These
patients check in and out of detox wards, on average, more than a
dozen times a year -- a practice that experts say would not be
tolerated in most states.

In the state's 2004 fiscal year, one patient was admitted to such
units 26 times at 17 different hospitals around New York City,
spending a total of 204 nights, Medicaid records show. In fiscal year
2005, there was one patient who spent 279 nights in detox wards, at a
cost of about $300,000.

New York State spends more than enough money to provide all the needed
treatment, but "the dollars are being spent in the wrong settings,"
said Deborah S. Bachrach, the state's Medicaid director. In Gov. Eliot
Spitzer's campaign to overhaul Medicaid, she said, "this is very high
on our agenda."

George Epps, 59, was a heavy user of alcohol, cocaine and heroin and
says he went through detox programs around New York City 20 to 25
times over several years. "I would come out of detox and rent a room,
squander my money on drugs and women, be homeless again for a while,
and check back into detox," said Mr. Epps, who added that he had been
clean for more than six years.

He was far from being one of the most extreme examples, but he says he
understands the thinking of the repeat patient.

"I would tell myself I was just a brother who needed a rest, not
somebody who had a problem," he said. "I could mimic what they said
with such grace and conviction, they would swear I was cured."

Among state officials, doctors who treat addiction, service groups
dedicated to helping the homeless and mentally ill, even the addicts
themselves, there is remarkable agreement on why the treatment system
in New York is overpriced and inefficient.

In other states, most addicts who go through detox programs do so on
an outpatient basis, while in New York the vast majority are
inpatients. Medicaid rules in New York also encourage hospitals to
provide the most expensive kind of inpatient detoxification, though it
is often not medically necessary, while many other states favor a less
expensive form of inpatient treatment.

And in New York, when patients are discharged -- typically after about
five days -- the needed transition to an outpatient treatment program
often never occurs. That is one reason many patients do not fully
recover from their addictions and return to detox wards, experts say.

The system suits the most frequent patients -- most of them homeless,
mentally ill, or both -- who see the programs as a source of shelter
and food. And the most expensive treatment, which usually involves
some sedation, can reduce the discomfort of withdrawal better than
other methods.

Some drug users, especially those on opiates, also set out to clean
their systems so they can reduce the dose needed to get high,
according to addicts and those who treat them. For a homeless addict,
the cost of each dose is a major concern.

But at its core, experts say, the overuse of costly inpatient programs
is connected to the lack of housing for homeless people. People are
less likely to admit themselves to hospitals, and more likely to
adhere to treatment programs, when they are not living on the streets.
For more than a decade, the city and state have invested in such
housing, including some that accept residents who are not yet
drug-free, but demand for housing still far exceeds supply.

"For this small group of what are basically professional inpatient
detoxification users, it's really a whole series of linked problems,
and none of the parts of the system work very well," said Dr. Richard
N. Rosenthal, an addiction specialist and chairman of psychiatry at
St. Luke's-Roosevelt Hospital Center in Manhattan. "There's been some
progress on each element, but not enough."

The most intensive form of treatment, "medically managed" withdrawal
takes place in a hospital, usually involves some sedation, and
requires a great deal of care by doctors and nurses. The next level,
"medically supervised withdrawal," can be done in a hospital, or
sometimes on an outpatient basis, and requires less medical
intervention and less staff.

In New York, Medicaid pays an average of more than $100 a day for
outpatient medically supervised withdrawal, and close to $400 a day
for the inpatient version.

But it pays more than $1,300 a day for medically managed detox -- and
state officials estimate that more than 40 percent of that is profit
for the hospitals. Hospital executives say the margin is not that
high, but they concede that the most expensive form of detoxification
is a significant money-maker.

As a result, many hospitals offer that program, but not the cheaper
ones. By law, hospitals cannot turn away emergency patients, and drug
or alcohol withdrawal is considered an emergency. So about 80 percent
of the detox patients handled by hospitals in New York are treated at
the most expensive level -- often because it is the only one available.

Federal officials say they do not keep state-by-state Medicaid
records, but experts and state officials say it is clear that New York
spends far more on drug treatment than any other state, because other
states mostly provide outpatient treatment. Figures compiled by the
Department of Health and Human Services support that claim, showing
that New York has more hospital admissions for drug or alcohol abuse
- -- whether paid by Medicaid or someone else -- than California, Texas
and Florida combined.

Of the patients in medically managed detox in New York, "about 80
percent of them are uncomplicated and could be provided with a lower
service," said Karen M. Carpenter-Palumbo, commissioner of the state's
Office of Alcohol and Substance Abuse Services.

Spitzer administration officials say the state needs to pay less for
the top level of care, and possibly pay more for the others, to spur
the development of those services. That fits with the governor's plan
to review what Medicaid pays for all services, with an eye to
encouraging less expensive forms of care.

But those officials also know that when George E. Pataki tried twice
as governor to change the detox payment system, the hospital industry,
which has been losing money over all, persuaded the Legislature to
protect one of its few sources of profit.

Everyone in the field agrees that drug treatment would be more
effective and less expensive if a patient consistently went to the
same hospital and the same set of doctors.

But in New York, a hospital has no way of checking a patient's history
at other hospitals. The state has talked for years of making that
information available right away, and requiring that patients be
transferred to their "home" hospitals, but to no avail.

Beyond medically managed and medically supervised detox, there is the
least intensive form, called medically monitored withdrawal, which is
often done in a residential treatment center, to remove addicts from
the influences that contribute to their drug use. The cost per day is
comparable to outpatient detox, but patients can stay for weeks.

But under rules laid down decades ago by the federal government, which
pays half of New York's Medicaid bills, Medicaid will not pay for drug
treatment in a residential center, as opposed to a hospital. The state
pays for a limited amount, using non-Medicaid funds.

In interviews, several current and recovering addicts who have also
been homeless said they would happily accept less expensive forms of
treatment, as long as they were given shelter. Sam Tsemberis,
executive director of Pathways to Housing, a nonprofit group based in
Manhattan, works with many such people.

"People use it instead of the shelter system," he said. "It's safer,
you get three hots and a cot, the meals are better than a shelter, the
beds are better, you get a clean change of clothes."

When patients are discharged from hospital detox wards, the hospitals
are supposed to refer them to follow-up treatment, usually through
other organizations.

"The handoff doesn't happen," said Shari Noonan, who was the acting
commissioner of the state substance abuse office last year. "There are
no incentives for the hospital to make sure it happens."

Medicaid records show that in New York State, 80 percent of patients
do not have any form of outpatient treatment soon after leaving
hospital detox. For almost half of them, the next drug treatment they
get is another detox admission.

Ms. Carpenter-Palumbo said the state is looking into ways to correct
those failings, providing incentives to hospitals to follow up, and
assigning case managers to track patients. But again, such steps might
require getting stable housing first.