Enhanced Reimbursement for Inpatient SUD Rehab

Healing Lodge of the Seven Nations


American Indians and Alaska Native (AI/AN) communities experience some of the highest rates of substance-use disorder (SUD) of any ethnic group, and are also more likely to rely on public insurance, such as Medicaid. The Healing Lodge of Seven Nations (HL7N) is the only tribal youth residential program in the state of Washington, but its recently constructed facility—while essential for AI/AN people in Washington—lacked a clear path to financial sustainability.


The HL7N facility faced a set of challenges common to tribal health care provision, including low Medicaid reimbursement for SUD rehab, a lack of flexibility in how treatment centers can be funded, and challenges with workforce recruitment and retention.


The Washington State Medicaid plan allows tribes to apply for facility-specific, cost-based, per diem rates for residential SUD care. The model includes an annual growth rate, pegged to the IHS inpatient hospital rate, and would allow the HL7N facility to begin closing the financial gap. KAI worked with HL7N to submit a proper Enhanced Medicaid Reimbursement Rate Justification package to the Washington State Health Care Authority that satisfied all requirements for submission to the Centers for Medicare & Medicaid Services.


KAI empowered HL7N to charge a higher per diem Medicaid rate, which is a necessary step toward long-term financial sustainability.