Saturday, March 17, 2012

CMS Announces New Demo

Currently, Medicaid does not reimburse psychiatric institutions for services provided to Medicaid enrollees aged 21 to 64. This restriction is known as Medicaid’s Institutions for Mental Diseases or IMD exclusion. CMS has announced that the Medicaid Emergency Psychiatric Demonstration established under the Affordable Care Act will test whether Medicaid beneficiaries who are experiencing a psychiatric emergency can get more immediate and appropriate care when IMDs receive Medicaid reimbursement.

Due to the IMD exclusion, many Medicaid enrollees with acute psychiatric needs, such as those expressing suicidal or homicidal thoughts are diverted to general hospital emergency departments which often lack the resources or expertise to care for these patients.

For the Medicaid beneficiary this may result first in a delay in treatment and then when treatment is provided, inadequate care. General hospitals may delay the provision of care until a bed becomes available or inappropriately assign them to medical beds.

The CMS Innovation Center will provide up to $75 million in federal Medicaid matching funds over three years to Alabama, California, Connecticut, Illinois, Maine, Maryland, Missouri, North Carolina, Rhode Island, Washington, West Virginia, and the District of Columbia. With the funding, the Medicaid Emergency Psychiatric Demonstration will enable private psychiatric hospitals to receive Medicaid reimbursement for emergency care to be provided to Medicaid enrollees aged 21 to 64 who have an acute need for treatment.

The demonstration will test whether Medicaid reimbursement to treat psychiatric emergencies, described as suicidal or homicidal thoughts or gestures, in IMD settings will enable states to increase the quality of care for people experiencing mental illness at lower costs and will also test whether such expanded coverage reduces the burden on general acute care hospital emergency departments.

Last August, all State Medicaid Program Directors were invited to submit proposals to receive funds for their state for the demonstration. States needed to specify how they would track patients and monitor stabilization and ensure proper patient discharge planning as required by the law.

CMS is working collaboratively with private non-profit organizations and across HHS to develop this demonstration. Partners included the American Association of Psychiatric Health Systems, and within HHS, The Office of the Assistant Secretary for Planning & Evaluation, and the Substance Abuse and Mental Health Services Administration.

Go to for more information.