Organizations representing state officials and people with mental illness say no one wants to go back to warehousing patients. But they also say that federal action is needed to reverse a decades-old law known as the “IMD exclusion,” which bars Medicaid from paying for treatment in mental health facilities with more than 16 beds. IMD stands for “institution for mental diseases.”
State officials would welcome a change to Medicaid’s exclusionary rule, said Matt Salo, head of the nonpartisan National Association of Medicaid Directors, which supports full repeal of the policy and, short of that, expanded waivers.
“There is a need for a spectrum of services for people suffering from mental illness and substance abuse,” Salo said. “That spectrum should include everything from community-based resources as well as more structured institutional care.”
“Finding ways for states to maximize mental health treatment through all health care avenues, including Medicaid, continues to be a topic of bipartisan discussions,” Chairman Orrin Hatch, R-Utah, said Tuesday in a statement.
“The IMD exclusion makes it very difficult for people with serious mental illness to get a bed when they need that care, and the 24-7 safety, security and treatment that an inpatient facility provides,” said Elinore McCance-Katz, assistant secretary of Health and Human Services for Mental Health and Substance Use. “That contributes to jails and prisons becoming de facto mental institutions in this country.”
McCance-Katz also said expansion of community-based and outpatient treatment is needed.
Last year a government advisory panel recommended repealing Medicaid’s IMD exclusion, and the idea has bipartisan support in Congress. But the cost of full repeal has been estimated at $40 billion to $60 billion over 10 years, daunting for lawmakers. State waivers may provide a more manageable path.
Advocates question the cost estimates, saying that savings from keeping mentally ill people out of jail should be factored in as well.
“There is no argument that stepping forward and addressing the IMD exclusion would have a huge benefit to mental health systems in states across the country,” said John Snook, executive director of the Treatment Advocacy Center, a nonprofit trying to broaden access to mental health treatment.