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Medicaid Directors push for coverage for long-term treatment of mentally ill

April 27, 2013

On April 18, 2013, the National Association of Medicaid Directors sent a letter to Congress outlining several recommendations regarding mental health legislation. Two key recommendations in the letter focused on doing away with a policy that generally prohibits state Medicaid programs from covering long-term treatment for the mentally ill ages 21 to 64, and ensuring continuity of care for individuals with mental illness who transition between Medicaid and Qualified Health Plans (QHPs) offered through Exchanges. (Now, if we can only get them to write a similar letter focused on children and youth!)

Download the full letter here. Read excerpts from the letter below.

  • IMD exclusion
    We support immediate removal of the so-called IMD exclusion so that all states may create greater capacity in the mental health system and provide long-term care services for beneficiaries with mental illnesses on par with services provided to beneficiaries with physical health needs. The IMD exclusion prohibits federal Medicaid funds from being used to pay for the cost of medically necessary inpatient care provided to individuals 21 to 64 years of age who reside in IMDs. IMDs are inpatient facilities of more than 16 beds whose patient roster is more than 51 percent people with severe mental illness.

    The severely mentally ill usually are unable to obtain employment –and in turn do not have access to employer sponsored insurance. However, federal Medicaid policy, with some technical exceptions, prohibits states from covering long-term treatment for the mentally ill ages 21 to 64. This arcane federal payment exclusion policy has been in place since Medicaid was enacted in 1965 – a time when state and local psychiatric hospitals housed and funded care for the large numbers of persons with severe mental illness. The policy leaves adults with severe mental illness as the sole category for whose inpatient care Medicaid will not reimburse except under circumstances which narrowly limit choice, and likely compromise quality. Not only is this outdated policy discriminatory, it also impedes advancement of the federal and state government’s policy priorities and preferred delivery system structures.

  • Continuity of mental health services
    We also recommend that Congress examine the unique set of issues that will impact individuals with mental illness who transition between Medicaid and Qualified Health Plans (QHPs) offered through Exchanges. Medicaid is one of the largest payers for mental health services and offers a robust level of benefits. However, when a person transitions to a QHP, there may be a difference in the breadth of mental health services covered. Medicaid also may have a different network of mental health professionals and facilities as compared to a QHP’s network. These issues present challenges as states try to facilitate continuity in the scope and type of care for low-income individuals, including those with mental and behavioral illnesses.

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