Addiction Industry Leadership Wants Reform of Medicaid 16-Bed Rule

Addiction Treatment Industry Newswire
12/26/2014 -ATIN – There are growing calls coming from all over the addiction treatment industry for reform, especially after Obamacare becomes more and more fully embedded into the system of medical payment relations between the states and the federal government. Of particular concern, according to industry CEOs we have talked to in recent years and advocacy institutions like the Legal Action Center, is a rule that has been for decades part of the fabric of federal payments to the “public” side of the addiction treatment industry – as we have explained for years now in Treatment Magazine, public/private is an increasingly meaningless addiction industry distinction, especially for the larger “public” treatment providers – that addiction treatment providers say is being misapplied to them, a rule that essentially does not allow federal Medicaid to pay for residential care at a treatment center that has more than 16 beds.

Phoenix House CEO Calls for Reform

With the increased discussion and complaints from leadership in the treatment industry and also news reports recently like the one in the Springfield State Register, the major newspaper covering the Springfield, IL capitol region that described how in Illinois there is growing evidence that the 16-bed limit is pushing people into outpatient care vs. residential –   while perhaps in some cases it might be perfectly appropriate for a client to be in some form of outpatient care, it may also be that in some highly acute cases that residential is needed and unable to be offered due to problems getting paid by Medicaid – we here at Treatment Magazine thought it about time that we approach a highly credible source to succinctly put into perspective what the problem is from the addiction treatment industry’s perspective. So we asked Howard Meitiner, who will soon be retiring as CEO of addiction industry giant Phoenix House after nearly eight years at the helm, to provide for this article his and Phoenix House’s perspective on the 16-bed limitation, or what is known in shorthand as the IMD Exclusion. Says Meitiner “The Institution for Mental Disease Exclusion” [IMD Exclusion] – designed to guard against Medicaid picking up part of the cost of operating psychiatric hospitals – has been misapplied, since first enacted, to residential treatment settings serving substance use disordered individuals. Residential treatment programs are not institutions by any definition have nothing in common with psychiatric hospitals and should not be held to an arbitrary, decidedly not evidence-based, bed limitation. CMS [the powerful Centers for Medicaid Services that sets policy and to some extent controls federal payments] should cease applying this Exclusion to prevent providers of residential substance abuse treatment services from billing Medicaid – medical and clinical services that are Medicaid reimbursed in non-residential settings”.

Part of Social Security Act since Medicaid’s Enactment

According to the Legal Action Center, an advocacy group that fights for the rights of those with addiction whose long-time board chair is Daniel Mayers recently retired partner at the powerful Washington DC law firm of Wilmer Cutler and Pickering, the Medicaid IMD Exclusion has been part of the Social Security Act in section 1905(a)(B) since Medicaid’s enactment in 1965. It was part of Democratic President Johnson’s vast increase in social services during his tenure in the mid-1960s as president backed up by a Congress that at the time was firmly controlled in both the Senate and House by Democrats artfully manipulated by Johnson who had previously been a senator from Texas for decades. (Source: Robert Caro’s The Years Lyndon Johnson: Master of the Senate and The Years of Lyndon Johnson: Passage of Power) The situation in Washington DC at the time was vastly different than now, where we have a split government with enormous animosity between a Democratic President and a Congress after recent elections that is controlled completely by mostly antagonistic Republicans. In such an atmosphere, there is mostly politics being played and not real effort to do the work of government, which is to update outmoded regulations like the IMD Exclusion.

Suggestions for Reform

Nevertheless, the Legal Action Center says there are a range of reform solutions to get rid of the IMD Exclusion, ranging from full repeal by Congress, to raising the 16-bed limitation all the way to Health and Human Services issuing waivers to treatment centers.

READ OUR recent story on Howard Meitiner’s resignation


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