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Report to Congress on Oversight of Institutions for Mental Diseases

Since Medicaid was established in 1965, federal statute has largely prohibited payments to institutions for mental diseases (IMDs). An IMD is defined in the Social Security Act 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 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. Nevertheless, despite this longstanding payment exclusion, there are several other Medicaid authorities that states are using to make Medicaid payments for services provided in IMDs.

This report to Congress on Oversight of Institutions for Mental Diseases fulfills a statutory requirement in the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (P.L. 115-271) to identify and describe facilities designated as IMDs in selected states and summarize state licensure, certification, or accreditation requirements and Medicaid clinical and quality standards for these facilities. Chapter 1 outlines the history of the IMD exclusion and federal regulations governing Medicaid payment to IMDs. Chapter 2 estimates the number of IMDs accepting Medicaid in the selected states and describes the types of services these facilities offer. Chapter 3 looks at the federal and state roles in the regulation and oversight of IMDs and mental health and SUD treatment programs and facilities. Chapter 4 reviews state standards for behavioral health facilities, including facilities that may be considered IMDs and discusses how Medicaid agencies enforce these standards. The final chapter describes federal and state laws governing patient protection in IMDs, including the Americans with Disabilities Act (P.L. 101-336), the Supreme Court decision in Olmstead v. L.C. (119 S. Ct. 2176 (1999)), and the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (P.L. 110-343).