Support grows for Medicaid pay for mental health institutions

Lawmakers and mental health advocates agreed during a Senate hearing Wednesday that Medicaid should pay for short-term stays at residential mental health facilities as part of the broader goal of improving access to such services.

At a hearing of the Senate Health, Education, Labor and Pensions Committee, mental health professionals praised efforts to allow Medicaid to cover these services and otherwise increasing resources for patients with severe mental illness

Since its inception, Medicaid has excluded payment to most institutes of mental disease or IMDs. Fifty years ago, the stigma of mental illness was strong and short-term treatments weren't widely available. Medicaid generally excluded coverage because policymakers wanted state mental hospitals to pay for the care.

Eleven states and the District of Columbia began a three-year demonstration program to pay for the residential services for adults in July 2012 with $75 million from the Affordable Care Act.

Mark Covall, CEO of the National Association of Psychiatric Health Systems, said the program was abruptly cut off months early because some of the states expanded Medicaid access and the funding ran out more quickly than expected.

But the program was working and patients in the participating states were benefiting, Covall said. “The final evaluation is not out, he said, but, “it has had a huge impact in eliminating backups.”

Last month, President Barack Obama signed a bill into law that will extend the demonstration program through this fall and require HHS to submit a final report and recommend whether the program should be continued and expanded to other states.

At the hearing Wednesday, Penny Blake, an emergency room nurse in North Palm Beach, Fla., said many mental health patients with nowhere else to go for care come to the emergency room, which is far from ideal for treatment.

They usually are boarded at the ER for several hours and sometimes days before they can be transferred to a psychiatric facility for an inpatient stay, she said.

“I cannot think of a single time in the past year that any of our patients has been accepted immediately when the request has been made,” Blake said.

The Mental Health Reform Act of 2015, which is considered a possible vehicle for bipartisan mental health reform this session, would create an exception to the exclusion for stays at psychiatric hospitals with an average length of stay of less than 20 days. This would go into effect only if the CMS actuary certifies it would not lead to a net increase in federal spending. Companion legislation in the House has a similar provision.

Covall said there could be disagreement about an exception that goes beyond short-term stays, but otherwise it is likely to make it through to any final reform bill.

“Generally speaking, there's strong bipartisan support for making a change,” he said.

Sen. Susan Collins (R-Maine) said Wednesday the demonstration project had promising results in her state and she supports the reform efforts to take more permanent action.

In June, the CMS issued a proposed rule that would allow Medicaid managed-care plans to pay facilities for stays of 15 days or fewer in a month.


Shannon Muchmore

Shannon Muchmore reports from Washington on health politics and policy. Before joining Modern Healthcare in 2015, she was the health reporter at the Tulsa (Okla.) World. She has a bachelor’s degree in news editorial journalism from Oklahoma State University.

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