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The final bipartisan opioid package, which passed in the Senate
this week and is expected to be signed into law, includes a
significant revision from the original House bill that could lead
to an increase in treatment options for Medicaid beneficiaries
suffering from substance use disorder ("SUD"). The
final version of the "SUPPORT for Patients and Communities
Act" will provide state Medicaid programs with the option to
cover SUD treatment in certain Institutions for Mental Diseases
("IMD") for Medicaid beneficiaries between the ages of 21
and 64. This exception to the longstanding "IMD
Exclusion," known as the "IMD CARE Act," will be in
place for fiscal years 2019 through 2023.
The IMD Exclusion has been in place since the inception of
Medicaid, and barred states from receiving any Medicaid payments
"with respect to care or services for any individual who has
not attained 65 years of age and who is a patient in an
[IMD]." See 42 U.S.C. § 1396d
(a)(29)(B). IMDs include hospitals, nursing facilities, or
other institutions of more than 16 beds primarily engaged in
providing diagnosis, treatment, or care of persons suffering from
mental illnesses. Although use of federal Medicaid funds for
IMD services is generally prohibited, states are able to receive
IMD funding through Section 1115 demonstration waivers, Medicaid
managed care "in lieu of" authority, and disproportionate
share hospital (DSH) payments. Section 1115 waivers related
to behavioral health remain the most frequent type of waiver sought
by the states.
The provision in original House bill, which passed in June,
raised some concern because it applied only to beneficiaries with
opioid use disorder or who used cocaine. According to an
issue brief put out by Kaiser Family Foundation in June 2018, under
the original House bill, 78% of nonelderly Medicaid adults with SUD
would have been excluded from IMD treatment services. The final
bill expands the exception to beneficiaries suffering from any SUD,
and will allow states to receive Medicaid funding for IMD treatment
for SUD without having to obtain a waiver.
Partial repeal of the IMD exclusion received strong support from
the American Society of Addiction Medicine, American Hospital Association, the Association of
American Medical Colleges and other industry groups.
Providers and policy makers alike now widely acknowledge that SUD
is a disease requiring a full continuum of care, including
inpatient care, partial hospitalization, residential treatment and
outpatient services. The partial repeal of the IMD exclusion
will vastly expand treatment options for uniquely vulnerable
populations, including adolescents, pregnant women, and individuals
with housing instability.
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