States Use Multiple Legal Authorities To Use Medicaid To Pay For Behavioral Health Treatment In IMDs

The Medicaid and CHIP Payment and Access Commission (MACPAC) found that most state Medicaid programs use one or more legal authorities to use Medicaid funds to pay for residential or inpatient services provided by an institution of mental diseases (IMD). However, since 1965, the federal Medicaid program has excluded payment for IMD services to ensure that states alone fund inpatient psychiatric services. The goal of this exclusion was to encourage states to build community-based behavioral health capacity.

The federal Medicaid program defines an IMD as “a hospital, nursing facility, or other institution of more than 16 beds, that is . . .