CMS' new state waiver for paying mental health institutions: 4 things to know

CMS is expanding states' ability to determine how providers get paid for rendering residential mental health services.

Here are four things to know:

1. In a Nov. 13 letter to state Medicaid directors, CMS said it will provide more options for states to pay for short-term residential treatment services in an institution for mental disease for patients with serious mental illness and children with serious emotional disturbance.

2. Under current regulation, CMS reimburses up to 15 days of services in an institution for mental disease for privately managed Medicaid beneficiaries. However, the new waiver would expand reimbursement for certain services administered to beneficiaries outside of managed plans, too.

3. "More treatment options for serious mental illness are needed, and that includes more inpatient and residential options. As with the [substance use disorder] waivers, we will strongly emphasize 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 healthcare,” said HHS Secretary Alex Azar.

4. States can already pursue substance use disorder waivers under Section 1115 of the Social Security Act. So far, 17 states have approved SUD waivers. Under Virginia's demonstration, the state has seen a 39 percent decrease in opioid-related emergency room stays, as well as a 31 percent decline in substance use-related ER visits.

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