Cigarette smoking is one of the greatest drivers of adverse health outcomes and costs for state Medicaid programs. By investing in comprehensive tobacco cessation programs, states have reduced smoking rates and health care costs and have improved health outcomes. Tobacco treatment is one of the most cost-effective preventive services with as much as a $2-$3 return on every dollar invested. CMS encourages our state partners to pursue these outcomes by:
- Using Medicaid administrative funding to enhance quitlines;
- Implementing mandatory coverage of tobacco cessation counseling for pregnant women and providing cessation services for all other Medicaid beneficiaries; and
- Ensuring coverage of all FDA-approved tobacco cessation medications.
For more information, please contact: MedicaidCHIPPrevention@cms.hhs.gov
Investing in Tobacco Cessation Improves Health and Reduces Cost
Cigarette smoking is one of the greatest drivers of adverse health outcomes and costs for state Medicaid programs. Yet, while 70 percent of U.S. smokers report that they want to quit, few who try to quit use evidence-based treatments that can significantly increase their odds of success.
States can reduce smoking rates and health care costs and improve health outcomes by investing in comprehensive smoking cessation programs. Tobacco dependence treatment is one of the most cost-effective preventive services, providing substantial return on investment in both the short and long term.
The "cost per quit" of smoking cessation interventions ranges from a few hundred to a few thousand dollars, while the average cost for treating a single case of lung cancer can be over $40,000. A study published in 2012 by Hockenberry, et al. shows that tobacco cessation treatment in the outpatient setting lowers health care costs within 18 months of quitting. The study found that 18 months after their quit date, continuous sustained quitters cost $541 less per quarter than those who continued smoking. Another study found that the expenditures for smoking cessation programs could be offset by health care cost savings within 3 years.
Massachusetts - Produces High Return on Investment
Massachusetts recently implemented a highly effective smoking cessation program including a medical cessation benefit that:
- Is based on powerful evidence: the 2008 United States Public Health Service Clinical Practice Guideline, Treating Tobacco Use and Dependence, known as "The PHS Guideline"
- Is designed to remove barriers to access and encourage benefit utilization by providing broad coverage for evidence-based tobacco cessation treatments under Medicaid
- Includes an innovative service delivery component-a widespread communications and promotional campaign directed at both Medicaid consumers and clinicians.
Over the first two and a half years of the Massachusetts program:
- 37 percent of Massachusetts Medicaid enrollees who smoked utilized the benefit; and
- The prevalence of smoking among adult Medicaid members in Massachusetts fell from 38 percent to 28 percent.
Reports on health outcomes showed:
- A 46 percent decline in hospitalizations for heart attacks;
- A 49 percent decline in hospitalizations for other acute coronary heart disease diagnoses; and
- For every dollar expended on the program, there was a $2.12 return on investment within 3 years.
- Fiore MC, Jaén CR, Baker TB, et al. Treating Tobacco Use and Dependence: 2008 Update. Clinical Practice Guideline. Rockville, MD: U.S. Department of Health and Human Services. Public Health Service. May 2008.
- Greene J, Sacks RM, McMenamin SB. The Impact of Tobacco Dependence Treatment Coverage and Copayments in Medicaid. American Journal of Preventive Medicine. April 2014.
- Hockenberry, J, Curry S, Fishman P Baker T, Fraser, Cisler R,Jackson T, Fiore, M. Healthcare Costs Around the Time of Smoking Cessation. Am J Prev Med 2012;42(6):596-601.
- Kutikova L, Bowman L, Chang S, Long S, Obasaju C, Crown WH. (2005) The Economic Burden of Lunch Cancer and the Associated Costs of Treatment Failure in the United States. Lung Cancer 2005: 50(2): 143-154.
- Land T, Warner D, Paskowsky M, Cammaerts A, Wetherell L, et al. (2010) Medicaid Coverage for Tobacco Dependence Treatments in Massachusetts and Associated Decreases in Smoking Prevalence. PLoS ONE 5(3): e9770.
- Making the Business Case for Smoking Cessation Programs: 2012 Update” A report by Leif Associates.
- Richard P, West K, Ku L (2012) The Return on Investment of a Medicaid Tobacco Cessation Program in Massachusetts. PLoS ONE 7(1): e29665.
- Warren JL, Yabroff KR, Meekins A, Topor M, Lamont EB, Brown ML. Evaluation of Trends in the Cost of Initial Cancer Treatment. J Natl Cancer Inst 2008;100: 888-897.
Medicaid and Quitting Tobacco
Tobacco quitlines that follow the evidence-based protocols set forth in the Public Health Service (PHS) Guideline are considered an allowable Medicaid administrative activity for the "proper and efficient" administration of the Medicaid state plan, to the extent that the quitline provides support to Medicaid beneficiaries under the auspices of the state Medicaid agency.
States can claim Federal Financial Participation (FFP) for quitline expenditures in accordance with the applicable cost principles under OMB Circular A-87. In order for states to claim expenditures related to quitlines as an administrative cost at the 50 percent Federal Medicaid matching rate, such claims may not duplicate costs that have been, or should have been, paid through another source. States can only claim FFP for the quitline to the degree that the quitline serves Medicaid beneficiaries. Allowable costs must also be allocated in accordance with the relative benefits received by the Medicaid program. For more information, see State Medicaid Director Letter #11-007, "New Medicaid Tobacco Cessation Services."
How to Obtain Federal Medicaid Funding for Tobacco Quitlines
Steps will vary state by state, but here is an example of how a state can proceed:
- Create agreements between the state tobacco control program and the State Medicaid Agency to clarify how the funding will flow. A memorandum of understanding (MOU) between the agencies may be needed if the quitline operator has a contract with an agency that is not the Medicaid agency. See Maryland or Arkansas' MOUs as examples.
- Document the extent to which the quitline provides services to Medicaid beneficiaries. States can use a variety of methods, including, but not limited, to:
- Survey callers to determine Medicaid eligibility; or
- Calculate a Medicaid eligibility ratio to determine the approximate percentage of Medicaid-eligible callers in the total universe of callers served by the quitline; or
- Use an existing plan from the State Medicaid Agency as a model. For example, Maryland used an existing cost allocation plan that was accepted by Medicaid for a Poison Control Center.
- Ensure that there is no duplication of funds.
What is a quitline?
A quitline is a tobacco cessation service available through a toll-free telephone number that is staffed by counselors who are trained specifically to help smokers quit. Quitlines allow smokers to access many different types of cessation information and services, including:
- Free support and advice from an experienced cessation counselor;
- A personalized quit plan and self-help materials;
- Social support and coping strategies to help the participant deal with cravings;
- The latest information on cessation medications; and
- In some instances, over-the-counter nicotine replacement medications (NRT) to help during a quit attempt.
Currently, all states offer some quitline services via a single toll-free portal, 1-800-QUIT-NOW. State quitlines provide different menus of cessation treatment options based on their budgets.
Quitlines play an important role in a comprehensive state tobacco control program, and the evidence suggests that smokers who receive quitline counseling are approximately 60 percent more likely to succeed than smokers who receive minimal or no counseling. Key reports from the Institute of Medicine, the Centers for Disease Control and Prevention, and others urge states to provide enough funding to the national quitline network to reach 5-10 percent of smokers annually.
Are Quitlines Cost Effective?
Quitlines are a cost-effective and efficient way to reach a large number of smokers. Studies indicate that for every smoker who quits in response to tobacco control measures, such as through a quitline, total health care costs over the next five years drop, on average, by approximately $2,400. Additionally, quitlines are cost-efficient because they provide economies of scale by serving large numbers of tobacco users. Quitlines are able to offer resources to priority populations such as pregnant women, can deliver services to multi-lingual groups, and make large-scale promotional campaigns more feasible and effective.
Maryland - Quitline Example
Maryland's Department of Health and Mental Hygiene (DHMH), which includes the state public health and Medicaid programs, was one of the first states to obtain approval for a cost allocation plan to claim federal Medicaid administrative match for quitline activities. Medicaid's partnership with the public health agency in supporting the quitline has resulted in improved cessation services to Medicaid enrollees, improved sustainability for the quitline, and a demonstrated model of third-party reimbursement.
The Maryland Tobacco Quitline serves both Medicaid and non-Medicaid populations. The Maryland Medicaid agency and the state tobacco quitline collaborated to develop and submit a cost allocation plan to the CMS for reimbursement of quitline services for Medicaid members as an administrative match. Upon calling the quitline, individuals are asked their insurance status and the name of their insurance carrier. Monthly client utilization data is compiled from an intake survey conducted when callers initiate service. Allowable reimbursement includes a 50 percent match of counseling expenditures for Medicaid callers, who currently make up about 30 percent of quitline users.
From July 2011 through June 2012, Maryland served 2,108 Medicaid participants through the state quitline and has submitted administrative claims for $161,542.55. This support came at a critical time for the quitline, as the overall call volume grew from 14,132 inbound calls in state fiscal year 2011 to 18,590 inbound calls in state fiscal year 2012.
Maryland's leadership in the quitline-Medicaid partnership has garnered interest by national colleagues. Maryland Department of Health and Mental Hygiene staff has presented on this partnership nationally, including a webinar in January 2012 for North American Quitline Consortium members, entitled, "Securing Federal Financial Participation for Quitline Services".
Smoking During Pregnancy
An estimated 20 percent of pregnant women enrolled in Medicaid smoke during pregnancy. The prevalence is even higher in certain geographic areas and among some groups such as women younger than 24 years. Smoking during pregnancy and the reproductive years is harmful for women and infants (For the most recent data, see the 2014 Surgeon General's Report: The Health Consequences of Smoking-50 Years of Progress, Chapter 9, "Reproductive Health.").
The Affordable Care Act requires states to expand Medicaid coverage of cessation services for pregnant women, which can save lives and save money.
Tobacco dependence interventions for pregnant women are particularly cost-effective because they can:
- Reduce perinatal deaths;
- Reduce the number of premature and low birth-weight babies; and
- Reduce use of newborn intensive care units, shorten lengths of stay, and decrease service intensity.
Based on 2002 birth certificate data, at least 5% of preterm-related deaths and at least 23% of sudden infant deaths would be avoided if prenatal smoking was eliminated.
A 2006 analysis indicated that implementing a smoking cessation intervention among pregnant women could cost from $24 to $34 per pregnant smoker counseled and may save $881 per pregnant smoker in averted neonatal costs, potentially resulting in net savings of from $400,000 to $8 million. The Congressional Budget Office estimated that the savings derived from Medicaid coverage of comprehensive tobacco cessation services for pregnant women more than offset their costs, resulting in reduced costs for states and the Federal government.
Action Steps for States
- States must add counseling and pharmacotherapy benefits for pregnant women, which under Section 4107 of the Affordable Care Act are now mandatory benefits under Medicaid. This coverage is defined as diagnostic, therapy, counseling services, and pharmacotherapy for cessation of tobacco use by pregnant women. For more information, please see State Medicaid Director Letter #11-007 and contact your regional CMS office.
- Promote cessation benefits to pregnant women and all women of reproductive age.
- Make use of the many resources available to the public and to health care providers to help women quit smoking. See this Resource Guide for a list of highlighted resources.
- Encourage providers to review best practices for smoking cessation. Continuing education credits are available for the free training, "Smoking Cessation for Pregnancy and Beyond: A Virtual Clinic."
For technical assistance and additional resources, contact MedicaidCHIPPrevention@cms.hhs.gov.
- Ayadi MF, Adams EK, Melvin CL, Rivera CC, Gaffney CA, Pike J, Rabius V, Ferguson JN. Costs of a smoking cessation counseling intervention for pregnant women: comparison of three settings. Public Health Reports 2006;121:120-126.
- Dietz PM, England LJ, Shapiro-Mendoza CK, Tong VT, Farr SL, Callaghan WM. Infant morbidity and mortality attributable to prenatal smoking in the U.S. Am J Prev Med 2010;39(1):45-52.