Objective: This analysis examines how institutional constraints, comprising federal actions and states’ substance abuse (SA) policy environments, influence states’ decisions to activate Medicaid reimbursement codes for screening, brief intervention, and referral to treatment (SBIRT) for risky substance use.

Methods: A discrete-time logistic duration model was employed to estimate the effect of institutional constraints on the likelihood of activating the Medicaid reimbursement codes. The primary constraints include federal SBIRT grant funding, SA priority, economic climate, political climate, and interstate diffusion. The analysis sample includes 187 state-year observations on 50 states between 2007 and 2011. All data were collected from publicly available, secondary data sources.

Results: Federal SBIRT grant funding did not significantly affect the likelihood of activation. States with higher levels of per capita SA expenditures, enacted parity laws, certain clauses in the State Medicaid Plan, and a Democratic-controlled state government were more likely to activate the codes. States with higher levels of per capita block grant funding and higher unemployment rates were less likely to activate the codes.

Conclusion: While the Patient Protection and Affordable Care Act pushes integration of the health and behavioral health system at the federal level, this analysis suggests that activation of integrative financing policies at the state level varies due to institutional constraints. This provides a cautionary tale for the widespread implementation of financial reforms at the state level as states’ SA priority and capacity differentially affect their willingness and ability to respond to federal rule changes.