Indiana submitted its Healthy Indiana Program 2.0 (HIP 2.0) HSA based Medicaid waiver for an extension last week. One of the tweaks that they want that should be completely non-controversial is a change to the IMD exclusion.
Through this waiver extension application, the State seeks to address the substantial drug abuse epidemic facing the State by adding critical new evidence-based substance use disorder (SUD) treatment services, as well as expanding access to qualified providers through a waiver of the long-standing CMS exclusion of IMD providers (IMD exclusion). The IMD exclusion currently
prohibits federal financial participation for medically necessary, inpatient mental health services provided in freestanding psychiatric hospitals with greater than sixteen (16) beds for Medicaid eligible adults between 21 and 64 years of age. The IMD exclusion has created a significant access issue in the State…
Overall, the IMD exclusion waiver would allow Medicaid patients to access at least 15 new facilities across the state, and potentially increase capacity at 12 other facilities.
IMD was put in place to keep states from shutting down their state hospitals which were state funded and driving everyone to private stand-alone facilities for Medicaid and thus the Feds to pick up a significant chunk of the tab. Indiana wants to expand access to beds that are already built. They also probably assume that sixteen may or may not be an optimal number of beds for smaller facilities so some of the facilities that are currently IMD compliant may want to expand.
Getting rid of or at least significantly relaxing IMD restrictions on a statutory basis should have shared support. It should make care more accessible to more people. At the same time, it will increase supply of beds and lower artificial barriers to a quasi-competitive market should lead to (slightly) better pricing. There is a lot of interest in opioid treatment right now. Getting people to in-patient beds is a major barrier to care and rehab, so there could be a space to move here.