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New Guidance for Substance Use Disorder Patients in IMDs

The Centers for Medicare & Medicaid Services (CMS) sent a letter to state Medicaid directors with guidance on implementing Section 5052 of the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act, which provides a limited exception to the institutions for mental disease (IMD) exclusion.

Under Section 5052, states can establish a state plan option to provide services to adult Medicaid beneficiaries (ages 21 to 64) with at least one substance use disorder and who are patients in an eligible IMD between Oct. 1, 2019, and Sept. 30, 2023. Under this new option, states can receive federal financial participation (FFP) for all covered Medicaid services to IMD patients, whether provided inside or outside the facility. The FFP is capped at a maximum of 30 days in a 12-month period per beneficiary.

The IMD exclusion prohibits FFP for services provided in an IMD to adult Medicaid beneficiaries. While many states received waivers for the IMD exclusion, the SUPPORT Act enables a more streamlined process to allow federal reimbursement for these services.

CMS Announces D.C. Behavioral Health Waiver

CMS also announced the approval of a behavioral health transformation waiver for the District of Columbia that includes a waiver of the IMD exclusion for beneficiaries with:

  • serious mental illness (SMI);
  • serious emotional disturbance (SED); or
  • substance use disorder (SUD).

This waiver is the first of its kind targeting beneficiaries with SMI and SED. CMS in a November 2018 letter to state Medicaid directors outlined guidance for states to pursue this type of waiver targeting. In the guidance, CMS detailed how this opportunity allows states to provide coverage for beneficiaries with SMI, SED, or SUD to receive treatment at an IMD and expand access to other community-based services.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

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

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