By Bonnie Katz, SEPH VP of Corporate Business Development
[Winter 2006; Vol. 32, No. 2; Pg 7]
The Medicaid program historically included a
funding exclusion that had the net effect of preventing Medicaid adults between
the ages of 21 and 64 from being served in "Institutions for Mental
Disease" or "IMD's". Both
private freestanding and state psychiatric facilities are considered IMD's.
The practical result of this is that Medicaid adults were denied access
to inpatient services in private psychiatric hospitals because the federal
government would not contribute its "FFP" or full federal
participation payment contribution of 50% to the care.
When Maryland's 1115 Waiver was implemented in
1997, it included a waiver to the IMD exclusion. This meant that for the first
time, Medicaid recipients could routinely be served in facilities such as Brook
Lane, Potomac Ridge and Sheppard Pratt. As
a result of recent federal reinterpretation of the rationale for initially
granting these IMD exclusion waivers, the leadership of the Centers for Medicare
and Medicaid Services (CMS) has decided that all such waivers will be phased out
upon their current expiration. No further waivers will be granted.
Despite two years of efforts to prevent the
termination of Maryland's IMD exclusion waiver, it officially sunsets on June 30th
of this year. Maryland is currently
in the first year of the three-year phase out.
In year one (FY 06), there will be no change in FFP.
In year two (FY 07), it will be reduced to 50%.
In year three (FY 08), it will end.
Maryland's Department of Mental Hygiene,
through Dr. Brian Hepburn; the Department of Health and Mental Health, through
Secretary Tony McCann; and the Office of Governor Ehrlich have been very vocal
with CMS about their preference for the waiver to remain in place.
In Maryland, about 1,000 Medicaid adults per year are served in IMDs.
Because of the downsizing of state facilities and the limited capacity in
general hospital settings, it is unlikely that there is sufficient elasticity in
the system to absorb these admissions without the IMD capacity.
Furthermore, the cost per day to the Medicaid program is considerably
higher in the general hospital setting. Medicaid continues to pay less to the
IMDs than to the general hospitals.
Recognizing the capacity issues and the concern that
more psychiatric patients will remain in emergency rooms for protracted periods
of time, Dr. Hepburn is committed to continued state funding of the Medicaid
adult population for their IMD stays. However,
there is still an effort to convince the principals at CMS that Maryland's
system is unique and that freedom of choice for Medicaid adults, which is a core
value of our state's public mental health system, should include
non-discriminatory access to the same settings as other Medicaid and
non-Medicaid patients. Maryland should be allowed to continue its IMD exclusion
waiver or to start a demonstration project that would quantify the benefits of
the waiver