Claire Dawson
Institutes of Mental Disease (IMD) are defined as hospitals, nursing facilities, or other institutions with more than 16 beds that primarily provide diagnosis, treatment, and care for people with mental illnesses. The federal government's IMD exclusion policy prohibits Medicaid payments for services provided to patients receiving care in an IMD, either within or outside the facility. This policy aims to transition individuals from institutionalized care back into community settings and increase access to publicly funded community-based behavioral health services. Colorado has IMDs that cater to specific age groups, such as those under 21 or over 64, and there is also the Illinois Medical District (IMD), which is a hub for healthcare, education, research, and innovation.
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What You'll Learn
The IMD term refers to 'Institutes for Mental Disease'
The term IMD refers to Institutes for Mental Disease. These are psychiatric hospitals or other residential treatment facilities with more than 16 beds. The Social Security Act, passed by Congress in 1965, established Medicare and Medicaid and created the term Institutes for Mental Disease or IMDs.
The federal government established the IMD exclusion, which prohibits Medicaid payment for services provided to patients receiving care in an IMD. This exclusion applies to services provided both inside and outside the facility. The goal of this policy was to move people away from institutionalized care and back into their communities, increasing the availability of publicly funded community-based behavioral health services.
The IMD exclusion is the only part of the Medicaid program that does not pay for medically necessary care due to the type of illness being treated. This has resulted in unequal coverage of mental health care. States have been given the option to cover short-term stays in psychiatric hospitals by applying for a waiver from the federal government. This allows for up to 15 days of coverage in a capitation month under the "in lieu of services (ILOS)" authority.
In Colorado, residential SUD facilities with more than 16 beds are eligible for reimbursement through Health First Colorado (Colorado's Medicaid program). Colorado's two state-run mental health hospitals are IMDs and can only receive Medicaid funding for services provided to members under 21 or over 64. Certain children under 21 can be covered in an IMD setting under the "Psych Under 21" benefit, which allows for placement in a Psychiatric Residential Treatment Facility (PRTF).
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Hospitals with more than 16 beds
An Institution for Mental Diseases (IMD) is defined as a hospital, nursing facility, or other institution with more than 16 beds that primarily provides diagnosis, treatment, or care for people with mental illnesses, including substance use disorders (SUDs).
The IMD exclusion has been in place in the Medicaid statute since 1965, and IMDs are not eligible for Medicaid payment for services provided to individuals aged 21-64. However, certain waivers and state plan options, such as Section 1115 demonstration waivers, allow states to seek Medicaid payment for short-term psychiatric care or substance use disorder treatment in IMDs for this age group.
The average number of total staffed beds in a US hospital is 129, and about 30% of hospitals have between 26 and 100 beds. Hospitals with more than 16 beds can vary in size, with some having a few hundred beds and others having thousands. The size of a hospital is influenced by various factors, including its location, the population it serves, and the availability of specialised care. Determining the optimal number of hospital beds is a complex task that requires consideration of dynamic variables such as demographic changes, average length of stay, admission rates, and bed occupancy rates.
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No Medicaid payment for services provided in or outside the facility
The federal government's IMD exclusion policy states that no Medicaid payment can be made for services provided either in or outside the facility for patients receiving care in an IMD. IMD stands for Institutes of Mental Disease, which are defined as hospitals, nursing facilities, or other institutions with more than 16 beds that primarily provide diagnosis, treatment, or care for people with mental illnesses. The goal of this policy is to encourage community-based care and increase the availability of publicly funded behavioral health services.
While Medicaid does not cover services provided in IMDs, there are some exceptions and workarounds. Firstly, certain state-run mental health hospitals that are IMDs can receive Medicaid funding for services provided to individuals under 21 or over 64. This is known as the "Psych Under 21" benefit, which allows children under 21 to receive care in a Psychiatric Residential Treatment Facility (PRTF) paid for by Medicaid. Additionally, under Colorado's 1115 Waiver, residential SUD facilities with more than 16 beds are eligible for reimbursement through Health First Colorado, the state's Medicaid program.
In terms of nursing facilities, Medicaid coverage is available only for services provided in a nursing home licensed and certified by the state survey agency as a Medicaid Nursing Facility (NF). If an individual requires nursing home services after a period of coverage in a Medicare skilled nursing facility (SNF), they may have to pay privately or use long-term care insurance. However, if they exhaust their assets and are eligible for Medicaid, they can continue residing in the nursing home under the Medicaid NF benefit, provided it is also a Medicaid-certified nursing facility.
It is important to note that Medicaid beneficiaries may have the option to self-pay in certain states. According to the HITECH Act, Medicaid-insured individuals can self-pay outside of Kentucky and Colorado. However, in some states, such as Connecticut, Medicaid members may have to pay out of pocket if they choose to see an out-of-network provider. Therefore, it is essential to understand the specific rules and regulations of each state when dealing with Medicaid and IMDs.
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Colorado's two state-run Mental Health Hospitals are IMDs
Colorado operates two state-run Mental Health Hospitals: the Colorado Mental Health Hospital in Pueblo (CMHHIP) and the Colorado Mental Health Hospital in Fort Logan (CMHHIFL) in Denver. These hospitals are classified as Institutes for Mental Disease (IMD).
An IMD is defined 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, including medical attention, nursing care, and related services." The federal government established the IMD exclusion, which prohibits Medicaid payments for services provided either in or outside the facility for patients receiving care in an IMD. The goal of this policy was to reduce institutionalized care and increase the availability of publicly funded community-based behavioral health services.
Colorado has explored ways to increase flexibility and coverage for mental health services within the constraints of federal IMD exclusion guidelines. For example, under Colorado's 1115 Waiver, residential SUD Facilities with more than 16 beds are eligible for reimbursement through Health First Colorado, the state's Medicaid program. Additionally, Colorado has pursued an amendment to its current 1115 SUD Demonstration Waiver to further increase coverage for mental health services.
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Inpatient Psychiatric Hospitals can receive Medicaid reimbursement
The federal government established the IMD exclusion, which means that no Medicaid payment can be made for services provided to patients receiving care in an IMD, either inside or outside the facility. However, there are exceptions to this exclusion. For example, Colorado's Mental Health Hospitals in Pueblo and Fort Logan are IMDs, and they can receive Medicaid funding for patients under 21 or over 64 years of age. This exemption is referred to as "Psych Under 21" and allows children under 21 to be placed in a Psychiatric Residential Treatment Facility (PRTF) with room and board covered by Medicaid.
Additionally, under Colorado's 1115 Waiver, residential SUD Facilities with more than 16 beds are eligible for reimbursement through Health First Colorado (Colorado's Medicaid program). This waiver aims to provide flexibility for a continuum of mental health services, including residential and step-down services. Furthermore, the Managed Care 2016 Final Rule from CMS (Centers for Medicare and Medicaid Services) allows states utilizing a managed care plan for Medicaid to pay for up to 15 days in a capitation month under the "in lieu of services (ILOS)" authority.
While the federal Medicaid program generally does not reimburse states for the cost of IMDs, most states have chosen to provide the "Psych Under 21" benefit, covering the cost of inpatient mental health services for young people. This benefit is provided in psychiatric hospitals, psychiatric units within hospitals, or psychiatric facilities with specific accreditation requirements. It is important to note that individuals are transitioned to community services or non-Medicaid inpatient services by the age of 22.
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Frequently asked questions
IMD stands for Institutes for Mental Disease. It is defined 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, including medical attention, nursing care, and related services."
The federal government established the IMD exclusion, which states that no Medicaid payment can be made for services provided either in or outside the facility for patients receiving care in an IMD. The goal of this policy is to move people from institutionalized care back into their communities and increase the availability of publicly funded community-based behavioral health services.
States use the State Medicaid Manual, Section 4390 for guidance in determining if a facility is an IMD.
The two state-run Mental Health Hospitals in Colorado, located in Pueblo and Fort Logan, are IMDs. Both private and public facilities in Colorado can also meet the criteria of an IMD.
You can reach out to Jessica Short, a Hospital Policy Specialist, or email [email protected] for more information about IMDs in Colorado. For questions about Colorado's SUD policy, you can email [email protected].
