Medicaid's role in preventing crime

Here's another reason for states to expand Medicaid: preventing crime by mentally ill offenders.

In the wake of the Newtown tragedy, many Americans wonder how we might do a better job preventing violence by disturbed, violent offenders. This is a huge challenge because it is almost impossible to predict that a specific individual will commit a mass atrocity.

Some politicians call for a national registry of the mentally ill. It's not clear what this would accomplish. Millions of Americans suffer from bipolar disorder, schizophrenia and other serious mental illness. Only a small minority will ever commit a violent crime. Stigmatizing people who seek help for these conditions is both unjust and unwise.

There is a subset of the mentally ill that poses genuine public safety concerns—young men who are “dual-diagnosed” with mental health and substance-use disorders. Many of these men (and some women) are frequent fliers within the criminal justice system, cycling between secure institutions, mental health facilities, shelters and the street. On any given day, Cook County Jail in Chicago houses about 2,000 inmates with significant psychiatric disorders.

No one quite knows how best to serve and monitor this population. At least one immediate opportunity hides in plain sight: Expand and improve Medicaid services for mental health. Medicaid has always provided an important financial foundation in mental health. If anything, the program has become even more important since the Great Recession. Since 2008, cash-strapped states and localities have imposed punishing cuts in community-based services for low-income uninsured patients.

Almost by definition, these uninsured patients are young men who are very poor, yet who can't check off any of the standard boxes that bring Medicaid coverage to groups like single moms or those with federally recognized disabilities. The homeless inebriated man begging quarters in the street is typically uninsured. As my recent article in Washington Monthly pointed out, it's a big challenge to provide him with needed mental health or substance-abuse treatment through many localities' poorly coordinated and poorly financed patchwork of safety net care.

Fortunately, the Patient Protection and Affordable Care Act extends Medicaid to millions of low-income Americans with incomes below 138% of the federal poverty line. That's a shade over $15,000 per year for a single adult. Medicaid (as well as private insurance plans offered on the new health insurance exchanges) will also offer a notably better package of evidence-based mental health and substance use services pertinent to the dual-diagnosed population.

There is one catch, though, courtesy of the U.S. Supreme Court. States aren't required to implement the Medicaid expansion. So the ACA will be a game-changer for mentally ill residents of California and New York, and even more-conservative states such as Arizona that have opted into the Medicaid expansion. Yet residents of deep-red states such as Texas won't receive the same help, at least for a while.

Another more obscure issue also holds back coverage. If you have a spinal cord injury requiring specialized rehabilitation, Medicaid will pay for medically indicated treatment performed by a properly credentialed provider. It won't do the same if you are a working-age adult requiring inpatient treatment for severe mental illness.

Since 1965, Medicaid has maintained something called the “institution for mental diseases,” or IMD, exclusion. Put simply, Medicaid will not pay for inpatient care at a psychiatric facility with more than 16 beds. The federal government created the policy because it didn't want to assume the full cost of extensive state and local mental hospital systems built to warehouse the mentally ill.

But times have changed. State hospital systems have markedly shrunk, creating new challenges for psychiatric emergency rooms and acute-care facilities. Private psychiatric hospitals might pick up the slack. Yet because of the IMD exclusion, they are effectively excluded from Medicaid reimbursement.

The IMD exclusion brings other unintended consequences—not least the housing of mentally ill patients in settings such as nursing homes that were not designed for that purpose. This exclusion hinders other efforts to address access problems. If, for example, a not-for-profit organization wants to build a long-term residential treatment facility for multiply challenged heroin or crack users, there is a strong incentive to stay below the 16-bed IMD limit. This isn't always feasible. So the IMD exclusion becomes one more obstacle to needed care.

These are intricate matters. Mental health advocates disagree among themselves about whether and how the IMD exclusion should be altered. A buried provision of the ACA supports a $75 million demonstration project. Eleven states will relax the IMD exclusion, with an independent evaluator examining the results. Given the complex and sensitive issues in play, it's wise to keep an open mind. It's not clear what precisely will help.

Our current nonsystem for treating mentally ill substance abusers clearly isn't working. We can do better by them. We might even make ourselves safer in the process.

Harold Pollack is a professor of social service administration