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On July 1, 2010, the Utah Division of Child and Family Services (DCFS) stopped receiving Medicaid funding for residential mental health and/or substance abuse treatment services provided at facilities with more than 16 beds for children in foster care or who are in state custody. By the end of October 2010, the Division expects to stop funding altogether for residential treatment facilities with more than 16 beds for these children. The move was part of the state’s year-long effort to comply with the federal rules about Institutions of Mental Disease (IMD), which are excluded from Medicaid reimbursement. Across the state, the move affected 27 provider organizations that operated residential treatment facilities with more than 16 beds. State officials have been working with provider organizations to downsize programs from the more common 24 to 28-bed facility size, to smaller programs with 16 or fewer beds per facility.

The federal Centers for Medicare and Medicaid Services (CMS) has defined IMDs as having certain characteristics. Its regional offices review state reimbursement submissions and state plan amendments to ensure that services are not provided in an IMD. The state Medicaid manual guidelines highlighted the following as characteristic of an IMD:

  • A residential facility with over 16 beds licensed and or accredited as a psychiatric facility operating under the jurisdiction of a state mental health authority
  • A residential facility with over 16 beds that provides mental health or substance abuse treatment, which can be determined by reviewing pharmaceutical medication claims
  • A residential facility with over 16 beds in which more than 50% of residents have been diagnosed with a mental disorder under any of the ICD-9 diagnosis codes, including mental health disorders and addiction disorders
  • A group of residential treatment facilities of fewer than 16 beds, each on a shared campus that share staff and the total number of beds on the campus sharing staff exceeds 16
  • A group of residential treatment facilities of fewer than 16 beds, each on a campus where some facilities, such as recreation or dining, are shared and the total number of beds on the campus exceeds 16

Although the long-standing Medicaid IMD exclusion is well known, DCFS was surprised to learn that CMS may consider its non-psychiatric residential treatment programs to be IMDs. In March 2009, CMS sent the Utah Department of Health, which administers the state Medicaid program, a Corrective Action Letter requiring DCFS and the Department of Health (DOH) to conduct a provider review to verify that no DCFS contractors were IMDs. The letter also required DCFS to unbundle its daily rate for residential treatment for children in the foster care system. Since 1999, DCFS had been paying provider organizations a single daily rate under an approved Medicaid State Plan, using Title IV-E funding to cover room and board for eligible children and Medicaid funding to cover mental health treatment. CMS set a deadline of July 1, 2010, for completion of the review and unbundling.

As the state started addressing the required tasks to meet the deadline, DCFS program managers sought to clearly define an IMD for a coming request for proposals (RFP) for residential treatment for children in foster care. At the same time, DCFS was working with residential treatment provider organizations to prepare the field for the coming CMS-mandated rate unbundling. A preliminary review found that fewer than five of the more than 50 residential treatment facilities in the state were clearly not IMDs. In June 2009, the Department of Health asked the regional CMS office for further clarity about whether various residential facility scenarios would be considered IMDs.

In August 2009, the regional CMS office forwarded the scenarios to the federal CMS office for further review. DOH received written responses in late December 2009, which were used to revise the RFP (DHS90538) that was released on April 19, 2010. The contracts for that RFP started in August 2010, and the selected provider organizations were given a grace period to make needed organizational or program changes to ensure that they were not perceived as IMDs. DCFS has started work on a follow-up RFP to be released in the Fall of 2010 for selected residential services for children in foster care; it will have no grace period.

A link to the full text of the CMS Corrective Action Letter to the Utah Department of Health regarding IMD status of residential treatment facilities” may be found in The OPEN MINDS Circle Library at www.openminds.com/market-intelligence/resources/031109mhcdcmsutahimd.htm

A link to the full text of “State Medicaid Manual Section Defining Institutions of Mental Disease” may be found in The OPEN MINDS Circle Library at www.openminds.com/market-intelligence/resources/090910mhcdcmsimdmedmanual.htm.

A link to the full text of the RFP, “Utah Department of Human Services Request for Proposal DHS90538 Seeking Children’s Residential Treatment for the Division of Child & Family Services/Division of Juvenile Justice Services,” may be found in The OPEN MINDS Circle Library at www.openminds.com/market-intelligence/resources/041910mhcdutahdhs90538.htm.

For more information, contact: Elizabeth Sollis, Public Information Officer, Utah Department of Human Services, 195 North 1950 West, Salt Lake City, Utah 84116; 801-538-3991; Fax: 801-538-4016; E-mail: esollis@utah.gov; Web site: www.dhs.utah.gov; or Tom Hudachko, Public Information Officer, Utah Department of Health, Office of Public Information, Post Office Box 141000, Salt Lake City, Utah 84114-1000; 801-538-6232; E-mail: thudachko@utah.gov; Web site: http://health.utah.gov/medicaid/.

Utah Bringing Children’s Residential Treatment Provider Organizations In Line With CMS IMD Rules . (2010, September 13). OPEN MINDS Weekly News Wire.

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COVID-19 Risk Management Plan August 11, 2021

We are excited to return to sunny southern California for The 2021 OPEN MINDS Management Best Practices Institute at the picturesque Newport Beach Marriott Hotel & Spa, August 23-26, 2021. To help plan your in-person attendance, visit https://openminds.com/live-mbpi/ for a schedule of events happening throughout the week.

The resurgence of the COVID Delta variant has certainly created new challenges for the country and for our families. Fortunately, the available COVID vaccinations have been very successful in preventing symptomatic infections and illness. But I did want to let you know that our team at OPEN MINDS is committed to making our executive events as safe as possible and have an active risk management plan in place. I wanted to share with you the key elements of our plan:

We will continue to monitor any changes in the CDC recommendations for the continued safety of the public. If you have any concerns or questions, feel free to reach out to a member of our team at events@openminds.com or by phone at 877-350-6463. We look forward to seeing you at The 2021 OPEN MINDS Management Best Practices Institute.

Monica E. Oss
Chief Executive Officer
OPEN MINDS

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