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CMS Approves N.M. IMD Exclusion Waiver

The Centers for Medicare & Medicaid Services (CMS) approved New Mexico’s Section 1115 waiver, which extends the state’s existing demonstration project through 2023 and waives the longstanding institutions for mental disease (IMD) exclusion for enrollees with opioid addiction or other substance use disorders (SUDs).

The waiver allows for federal reimbursement for short-term stays in IMDs for the specified populations and calls for the state to aim for an average length of stay of 30 days in residential treatment settings. CMS previously encouraged states to apply for IMD exclusion waivers for individuals with SUDs and other conditions, and many states have pursued these opportunities.

New Mexico’s opioid waiver also includes one additional year of funding for the state’s uncompensated care pool and three years of funding for the state’s Hospital Quality Improvement Incentive pool. Additionally, the waiver allows the state to:

  • increase copays for unnecessary use of hospital emergency departments;
  • increase Medicaid premiums;
  • terminate benefits for enrollees who fail to pay premiums for three months; and
  • eliminate retroactive coverage for new enrollees.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Rachel Schwartz is a policy associate at America's Essential Hospitals.

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