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Background. Congress mandated that MACPAC produce a report on the oversight of institutions for mental diseases in the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act. The SUPPORT Act requires MACPAC to describe IMDs receiving Medicaid payment in selected states, including the number of these facilities in each state and the types of services provided at each IMD. A ban on federal Medicaid payments to IMDs - known as the IMD exclusion- has been law since Medicaid was established in 1965. It aims to ensure that states rather than the federal government take responsibility for the costs of inpatient psychiatric services. The IMD designation, which is exclusive to the Medicaid program, is broadly defined as a hospital, nursing facility, or other institution of more than 16 beds that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases.
The report notes that facilities that are considered IMDs by the federal government include a variety of residential and inpatient facilities providing SUD and mental health services that are regulated under a range of federal and state rules. As many of these facilities are primarily regulated by states, oversight is often fragmented across state agencies, and there is considerable variation across states in how they are regulated - making it difficult to make broad conclusions about IMDs as a group. The IMD exclusion is one of the few instances in Medicaid where federal funding is not available for covered services based on the setting in which they are provided, and MACPAC notes that, despite this longstanding payment exclusion, there are several other Medicaid authorities that states use to make Medicaid payments for services provided in IMDs. These include demonstration waivers under Section 1115 of the Social Security Act and in-lieu-of services in managed care, as well as statutory exceptions to the exclusion for services provided to adults age 65 and older and children and youth under age 21. Most recently, a temporary provision of the SUPPORT Act allows states to make payments to IMDs that treat individuals with an SUD under the state plan.
The report also found that state licensure agencies, accrediting bodies, and other payers do not have standards specific to IMDs, given that the designation is unique to Medicaid. States regulate inpatient and residential treatment facilities separately and standards vary according to whether a facility provides SUD treatment or mental health care. Federal standards for IMDs are largely determined by whether or not facilities are Medicare providers, but because Medicare does not pay for SUD treatment services in most freestanding facilities, there is no federal certification process for these providers. The report explains that identifying IMDs is challenging because the IMD exclusion encompasses multiple types of facilities, and 2015 guidance from the Centers for Medicare & Medicaid Services (CMS) indicates that an IMD could be any institution that meets certain criteria. Other barriers to identification listed by the report included the ability for a facility's designation as an IMD to change over time based on its patient mix, and treatment offerings varying by state.
MACPAC developed a methodology to identify facilities that are likely to fall under the definition of an IMD, and identified 750 facilities that provided inpatient or residential mental health treatment and 1,600 facilities offered inpatient or residential SUD treatment that could be subject to the IMD exclusion. The report examines facilities and policies in seven selected states: California, Colorado, Florida, Massachusetts, New Jersey, Ohio, and Texas. In addition to background information on the history of the IMD exclusion and federal regulations governing Medicaid payments to IMDs , the report also discusses: the number of IMDs accepting Medicaid payments and types of services offered; federal and state roles in regulation and oversight of IMDs, mental health and SUD treatment programs and facilities; state standards for behavioral health facilities and enforcement policies; and federal and state patient protections in IMDs.
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