CMS To Allow Medicaid to Pay for Inpatient Psych Care in Private, State Hospitals: CHP

NYAPRS Note: Yesterday’s announcement by US Health and Human Services Secretary that states will now be able to apply to direct Medicaid funds for expanded use of inpatient care, including those provided by private and state psychiatric facilities, raises serious concerns. While the Secretary indicated that “inpatient treatment is just one part of what needs to be a complete continuum of care, and participating states will be expected to take action to improve community-based mental health care,” it is doubtful at this time that there are any explicit standards to measure whether and how states will similarly expand their outpatient systems. Stay tuned for further discussion and action.

CMS To Allow Medicaid to Pay for Inpatient Psych Care
By Jonathan LaMantia  Crain’s Health Pulse  November 14, 2018

The Centers for Medicare and Medicaid Services will allow states to use Medicaid funding to pay for short-term inpatient psychiatric care—a departure from a decades-long policy forbidding the practice—Health and Human Services Secretary Alex Azar said Tuesday.

The announcement follows a similar move by CMS to allow Medicaid to cover inpatient or residential services for people with substance-use disorders.

Any state seeking the waiver, which applies to adults with serious mental illnesses and children with serious emotional disturbances, must commit to improving community-based care, CMS said. State demonstration projects will cover only short-term inpatient services and must not cost CMS more than it would have otherwise spent without such a project.

"Inpatient treatment is just one part of what needs to be a complete continuum of care, and participating states will be expected to take action to improve community-based mental health care," Azar said in a speech to state Medicaid directors in Washington, D.C., Tuesday.

Azar said the policy came about to discourage states from "offloading" the responsibility of providing inpatient mental health services onto the Medicaid program when states had traditionally operated their own programs—sometimes providing inadequate care.

A spokeswoman for the state Department of Health said it was reviewing the federal guidance. "We welcome the opportunity to potentially end longstanding, arcane rules that deny states federal Medicaid funds to treat people with serious mental illness so deserving of compassion and care," she said.

DJ Jaffe, an advocate for services for the seriously mentally ill, said he agreed with the move but wished Azar had gone further.

"The law still prohibits most states from using Medicaid funds for seriously mentally ill adults who need long-term hospitalization," Jaffe said. "It is federally sanctioned discrimination against the seriously ill."