The IMD Exclusion: Still a Thorn in Our Side

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The IMD exclusion, a federal rule not allowing for Medicaid reimbursement of any inpatient facility larger than sixteen beds, was a popular topic in the 114th Congress, with several law makers expressing interest in reform. Even though landmark legislation benefiting substance use disorders was passed last year, the IMD rule was not reformed in any meaningful way. With the Trump presidency and current congress seeking to curb Medicaid spending, reforms from the federal level seemed to be on hold temporarily. Yet new legislation has emerged in the 115th Congress, once again making the topic one of bipartisan interest. Even though California operates under an 1115 waiver from the Center for Medicare & Medicaid services, allowing Medicaid to operate with more freedoms when it comes to inpatient care, CCAPP believes that our work on the issue is not complete. It remains a restrictive federal regulation, which requires a federal fix.

Rep. Brian Fitzpatrick (R-PA) has introduced the Road to Recovery Act. The bill enables states to expand access to inpatient treatment for substance use disorder, while not intruding on a state’s flexibility to implement care. Specifically, this bill amends the Social Security Act and CHIP to provide coverage for residential substance use disorder treatment in accredited and licensed facilities as determined by HHS and the Single State Authorities on Drugs and Alcohol. It also removes the arbitrary 16 bed limit currently in federal law, and also covers treatment for individuals under 65 years of age. There would be required periodic review of a consumer’s need for service every 60 days, and allows states to set standards for criteria when it comes to this evaluation.

Another bill has been introduced by Rep. Bill Foster (D-IL), the Medicaid Coverage for Addiction Recovery Expansion (Medicaid CARE) Act. It has also been introduced in the Senate by Senators Durbin, Portman, Brown, Capito, King, and Collins. The Medicaid CARE Act modifies the IMD Exclusion to allow Medicaid coverage for up to 40 beds in appropriately accredited “residential addiction treatment facilities” for up to 60 consecutive days for adults with substance use disorders. The bill allows individuals receiving addiction treatment in such a facility to maintain Medicaid coverage for other medical services, which are currently ineligible under the IMD Exclusion. The legislation also establishes a new $50 million youth inpatient addiction treatment grant program to fund facilities that provide substance use disorder treatment services to underserved, at-risk Medicaid beneficiaries who are younger than age 21, with an emphasis on rural communities. The bill would also increase flexibility for pregnant and postpartum women who are seeking treatment, and would allow them to access the services they need to ensure positive birth outcomes.

The IMD exclusion is also addressed in the interim report of the President’s Commission on opioid Abuse. Perhaps the most impressive recommendation of the commission is in regards to this regulation. In an effort to expand treatment capacity, the commission recommends that CMS grant waiver approvals for all 50 states to quickly eliminate barriers to treatment resulting from the federal Institutes for Mental Diseases (IMD) exclusion within the Medicaid program. This would, according to the commission, “immediately open treatment to thousands of Americans in existing facilities in all 50 states.” While this is a worthwhile pursuit, the waiver application process is long and arduous, and the results may come in time but certainly not “immediately.” The Commission stated that legislation would be necessary to repeal the exclusion in its entirety, which might be true- but legislation would NOT be needed to exempt SUD in patient treatment facilities from the rule. That could be done independently by CMS. As California is already operating under an 1115 waiver, however, this recommendation does little to advance care in the state.

In Washington, there are many calls for expanded access to care. Even as the states receive funds from sources such as the 21st Century Cures Act or the Comprehensive Addiction Recovery Act, there can be no increased access to inpatient treatment so long as the IMD rule remains in place. The IMD exclusion remains one of the most challenging and frustrating obstacles to increased care for substance use disorders, and will remain a high priority for CCAPP until it is reformed.

Article By:  Andrew Kessler, CCAPP Federal Policy Liaison

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