In a November 13, 2018, speech to the annual conference of the National Association of Medicaid Directors (NAMD), United States Health and Human Services (HHS) Secretary Alex Azar announced a new opportunity for states to expand Medicaid coverage of patient care at institutions for mental disease (IMDs). The announcement, which was followed by a letter to state Medicaid directors, outlined a framework under which state Medicaid programs could develop behavioral health care delivery systems that include short-term stays in IMDs for patients with serious mental illnesses and children with serious emotional disturbance. Federal funding will also be available under the demonstrations for care that would ordinarily be covered by Medicaid for patients in IMDs. States that participate by submitting 1115 waivers to the Centers for Medicare and Medicaid Services (CMS) outlining their plans will also be expected to include community-based care as a cornerstone of their approaches to serious mental illnesses.
Azar’s announcement goes a step further than recent action taken by Congress when it relaxed IMD restrictions in recent legislation. The legislation, the SUPPORT for Patients and Communities Act, gives states the option to cover care for individuals with a substance abuse disorder in an IMD setting. Under the SUPPORT Act, individual states may receive federal reimbursement for up to 30 days of care in an IMD setting per eligible patient, per year. Additionally, to date, CMS has approved 1115 waivers that allow IMD coverage for substance abuse disorder in 17 states.
The announcement and expansion as outlined by Secretary Azar require that states submit waivers to CMS under section 1115 of the Social Security Act with a plan for addressing serious mental illnesses and children with serious emotional disturbance, and paying for treatment in an IMD setting can be a part of that plan.
In his speech, Secretary Azar also touted the waivers that CMS has approved that allow states to institute work requirements as a condition for Medicaid enrollment for certain populations. He emphasized that CMS has set guardrails to protect beneficiaries and acknowledged that the initiatives increase paperwork burdens. However, he said, “we believe the benefits of setting the right incentives can far outweigh these costs.” Secretary Azar also indicated that CMS would be interested in working more closely with managed care organizations, which offer privately-managed Medicaid plans, on work requirements in the future.
In his speech, Secretary Azar seemed to indicate that CMS would begin to find ways to support and/or provide mental health services, saying that states and Medicaid have previously failed in their responsibilities to beneficiaries with mental illnesses. He framed the demonstration opportunities as a first step to expanding access to mental health services, in both inpatient and outpatient settings, to those who need them most.
Secretary Azar highlighted Medicaid’s role in fighting addiction, and in particular the opioid epidemic. He pointed to the success of 1115 waivers allowing states greater flexibility in treating SUD, and he praised the Administration’s speed in approving such waivers. He also mentioned some specific innovative programs developed by individual states, such as the success of Vermont’s hub-and-spoke model in which a medication-assisted treatment (MAT) provider acts as a central coordinator for a variety of different providers focused on addiction treatment.