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Opioids Emergency: Trump Takes Aim At Medicaid's Mental Health Facility Exclusion

By Steven Porter  
   October 27, 2017

If the decades-old restriction on federal Medicaid dollars going to mental health institutions were to be abolished, it could change the patient population seeking care at general hospitals as well.

In declaring the opioid epidemic a national public health emergency on Thursday, President Trump committed to charting a path forward that will “unlock treatment for people in need.” He took aim specifically at a longstanding policy that prohibits states from using federal Medicaid funding on certain mental health facilities.

“As part of this emergency response,” he said, “we will announce a new policy to overcome a restrictive 1970s-era rule that prevents states from providing care at certain treatment facilities with more than 16 beds for those suffering from drug addiction.”

Since its enactment in 1965, Medicaid has barred states from using federal dollars to pay institutions for mental disease (IMD) in most cases. This so-called “IMD exclusion” sought to phase out use of older psychiatric wards, but there have been incremental changes to the policy since, as population needs and the healthcare landscape have evolved.

Due to the IMD exclusion, many Medicaid enrollees with behavioral health needs find their way to emergency departments in general hospitals, where clinicians are often less prepared to address matters of mental health and substance abuse, the Centers for Medicare & Medicaid Services (CMS) has said. Abolishing the exclusion could therefore affect the patient population seeking care at non-IMD facilities.

Rep. Brian Fitzpatrick (R-PA) in June introduced a bill, the Road to Recovery Act, that aims to permit Medicaid funding for patients to use IMDs for “residential substance use disorder treatment services.” Earlier this month, attorneys general from 38 states and the District of Columbia signed onto a letter backing Fitzpatrick’s bill

“This change has been called for by providers, the medical establishment, governors of both parties and the President’s Commission on Combating Drug Addiction and the Opioid Crisis because it will make treatment affordable for those who need it, and create market incentives for new treatment resources,” the letter stated.

At the request of Sen. Dianne Feinstein (D-CA), the Government Accountability Office (GAO) published a report on the topic in August. The number of inpatient mental health hospital beds for adults decreased from more than 290,000 in 1990 to less than 189,000 in 2008, according to the GAO report. That’s a 35% decline.

“As the number of beds has decreased, questions have been raised as to whether sufficient capacity for inpatient and residential services exists,” the report notes, adding that the rising number of opioid-overdose deaths has driven calls for more treatment options, as some states have secured waivers from the exclusion.

President Trump’s public health emergency declaration stopped short of declaring a full-fledged national emergency, which could make additional funding available. Andrew Kolodny, MD, codirector of the Opioid Policy Research Collaboration at Brandeis University’s Heller School, said he finds the declaration disappointing.

This is not a plan,” Kolodny told NPR. “The administration still has no plan” to address opioids.

As the White House seeks to specify and implement a plan, it suffers from a few key vacancies. There’s no permanent secretary leading the Department of Health and Human Services (HHS) and no permanent director at the Drug Enforcement Agency (DEA), and the top candidate for drug czar, Rep. Tom Marino (R-PA), withdraw his name from consideration.

Despite the challenges, President Trump said his declaration Thursday is an obligatory step in the long-term but winnable fight.

“It will take many years and even decades to address this scourge in our society,” he said, “but we must start in earnest now.” 

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.

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