States Can Now Offer Broader Mental Health Treatment Thanks to Medicaid Changes

While it is important to assure that people with SUD receive genuine support during the early days of their recovery, it is also important not to allow these increases in segregation to be used to bolster provider revenue through gaming for people with mental illness or developmental disabilities who aren’t addicts…

In a speech Tuesday to state Medicaid directors, Health and Human Services Secretary Alex Azar said the Centers for Medicare and Medicaid Services will allow states to seek waivers from a rule known as an “IMD exclusion,” so states can carry out more inpatient mental health treatment for Medicaid beneficiaries. The “institution for mental disease” exclusion rule has prohibited states from using Medicaid funding to cover treatments in mental health facilities with more than 16 beds, such as state mental hospitals. The rule was put in place when Medicaid was enacted in 1965 with good intentions—to prevent states from using federal funds to “warehouse” patients into their facilities, which in the past typically provided substandard treatment, often in horrific conditions.

However, the growing number of people suffering from the opioid crisis and the perception that mental illness was a factor in recent mass shootings have prompted the Trump administration to add flexibility to the IMD exclusion, according to the AP.

“We have the worst of both worlds: limited access to inpatient treatment and limited access to other options,” Azar said. “More treatment options are needed, and that includes more inpatient and residential options that can help stabilize Americans with serious mental illness.”

In his speech, Azar mentioned how his agency granted similar waivers in the past to help patients with substance use disorders, first under the Obama administration in 2015 and under the current administration last year, when it approved 13 waivers. So far, the CMS has approved waivers for Medicaid-funded substance abuse treatment for 17 states.

Virginia has benefited from this waiver. An expansion in the number of spots for residential drug treatment programs in 2016 coincided with a 39 percent decrease in opioid-related emergency room visits and a 31 percent decrease in all substance-use-related emergency room visits, according to the Trump administration.

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