The Trump administration is urging states to change a rule that will give psychiatric patients more places to stay while they receive treatment for serious mental illness.
The change would pay for Medicaid patients to get mental health care for up to 30 days in a facility, such as a hospital, even if it has more than 16 psychiatric beds. That’s not allowed under current Medicaid law, through a rule known as the institutions of mental diseases exclusion, or “IMD exclusion.” The rule has been in place for decades, but the Trump administration says it’s time for a change, and many advocates agree.
“Every official should be clamoring to sign on to this,” said Angela Kimball, national director of public policy and advocacy at the National Alliance on Mental Illness.
States have long sought to be allowed to lift the limits, but they face a long road ahead as they seek approval. They also face backlash from critics who are concerned that the arrangement would cause the U.S. to revert to a time when people with mental illness were institutionalized.
Preventing such institutionalization was the impetus behind passing the restrictions in 1965. Congress wanted states to provide services to people in their communities so they could be with their families and continue to work and go to school.
The services didn’t materialize, however, and patients instead were placed on long waiting lists as medical facilities shuttered or shrank. Since the 1950s, the number of inpatient beds available in the U.S. has decreased by 96.5 percent, according to the Treatment Advocacy Center.
“Now we have the worst of both worlds: We don’t have nearly enough inpatient residential facilities, and we lack community-based care,” Kimball said.
The mental disorders in question go beyond anxiety and depression. While an estimated 43.8 million people have mental health issues, a smaller subset — 10 million — are considered particularly serious, with conditions such as schizophrenia and bipolar disorder.
When untreated, the illnesses can get in the way of someone keeping a job. That’s why a bulk of people with serious mental illness rely on Medicaid, which is paid for by the government and covers low-income people and people with disabilities. Treating mental illness is highly specialized, requiring a mix of medication, therapy, and other services that help people with housing and finding jobs.
“Many will need outpatient care, informal care, but some will need more intensive, institutional care,” said Matt Salo, executive director of the National Association of Medicaid Directors.
Often, both types of care are missing, contributing to increases in the number of people in prisons and jails, to homelessness, and to suicide. Emergency departments are flooded with psychiatric patients who languish there for days, and doctors discharge them if they can’t find a specialized bed available. Sometimes patients, even children, are sent to get care out of state, far from where their families live.
“Our goal is not to hospitalize people,” said Dr. Elinore McCance-Katz, assistant secretary at the Substance Abuse and Mental Health Services Administration. “It’s to have a life-saving intervention when needed.”
President Trump has demonstrated support for criminal justice reform and pointed to the need for mental health treatment following mass shootings. But the main reason health officials alerted states to the latest opportunity is the 2016 passage of the bipartisan 21st Century Cures Act, signed into law by former president Barack Obama.
It gave the Centers for Medicare and Medicaid Services power to propose how states could use Medicaid waivers, known as “1115 waivers,” to care for adults with serious mental illness and children who have serious emotional disturbance. The authority went into effect under the Trump administration, which sent a 37-page letter to Medicaid directors in November asking them to consider lifting the IMD exclusion and telling them how to apply to do so.
For states, filing waivers is a cumbersome process, involving piles of paperwork and months of work with no guarantee of approval. It can involve top administration officials as well as actuaries, state officials, and governors. States have to show the move will be budget-neutral to the federal government, and that they will still invest in community programs. After the plans are submitted, they face a 30-day public comment period, and federal officials can’t make a decision until at least 45 days have passed and all comments are considered.
A senior CMS official said the administration is committed to helping the applications go faster by setting up templates and having states copy one another’s methods.
“We understand there is a sense of urgency, and we are looking at ways to increase efficiency,” the official said.
The National Association of Medicaid Directors had been asking for the change for a long time, and it was welcome news to many providers.
“I’m grateful for the opening,” said Louis Josephson, president and CEO of the Brattleboro Retreat in Vermont. “It’s one way to go, and we can certainly benefit if we get that waiver.”
Mary Ditri, director of professional practice at the New Jersey Hospital Association, said the group has advocated for the repeal for years, noting that actions in Congress were focused on preventing opioid overdoses but that often people who use drugs also have a mental health issue.
Not all organizations devoted to mental health are on board with the Trump administration’s plan. The Bazelon Center for Mental Health Law condemned the decision, saying the administration didn’t have the authority to lift the IMD exclusion. Lawmakers and the administration should instead follow through on providing community services, the group said.
“Expanding community-based services such as supported housing, mobile crisis services, assertive community treatment, peer support services, and supported employment would dramatically reduce psychiatric hospital admissions and help people thrive in their communities,” the Bazelon Center said in a statement.
The Trump administration has stressed that it wants to see both approaches.
“We’ll be looking at other requirements, such as discharge protocols, so that there is a transition of care from that residential treatment program back into the community, and to make sure there is appropriate follow up,” a CMS official said.
Congress has talked about throwing out the IMD exclusion in the past, but funding has been a roadblock. One Congressional Budget Office projection found it would cost $ 60 billion in a decade. That number has frustrated officials and advocates, who say cost savings should also be considered.
“One of the things that doesn’t get considered is how expensive it is to not treat,” McCance-Katz said. “Incarceration is far, far more costly than a hospital bed.”
Still, Democrats were concerned that Republicans, who had sought Medicaid cuts as part of an Obamacare repeal, would seek offsets to the program that would harm other areas.
Taking a waiver route helps to see whether cost projections bear out. The Trump and Obama administrations let states apply to lift the limits on treatment for patients with addictions, a move 21 states used. Congress partially repealed the exclusion in the legislation in order to tackle the opioid crisis.
Many advocates hope to see a similar outcome for treating serious mental illness.
“If we can start to show on a state-by-state basis that CBO’s projections are unfounded, that puts us in a stronger position if we want to go at this in Congress,” Salo said.