RESEARCH WEEKLY: New Report Supports Repeal of IMD Exclusion
By Kelli South
“The first and most important step toward public mental health reform to take is to eliminate the IMD Exclusion,” according to a new report released by the Manhattan Institute this month.
The Treatment Advocacy Center has been a longtime advocate of repealing the IMD exclusion and this latest report is another example of the growing support for this measure. As stated in our 2016 background paper, the Medicaid Institutions for Mental Disease (IMD) exclusion has exceeded its usefulness and now only serves to discriminate against those with the most severe mental illnesses.
This new report walks through the history of the IMD exclusion before dismantling arguments for maintaining the exclusion and calling for its repeal.
What is the IMD exclusion?
Created in 1965 along with Medicaid, the IMD exclusion prohibits states from billing Medicaid for adult patients served in an Institution for Mental Disease. IMD is defined by the Centers for Medicare and Medicaid Services as “a hospital, nursing facility, or other institution with more than 16 beds—or more than 50% of the total beds in the facility—that is devoted to the diagnosis, treatment, and care of individuals with a mental illness.”
This exclusion was one of the main drivers of deinstitutionalization in the latter half of the 20th century, or the sharp reduction of beds available in inpatient psychiatric treatment facilities. The IMD exclusion’s restriction on bed numbers means that it is not cost effective for many facilities to operate with a full staff when they can only serve a maximum of 16 patients at a time.
An outmoded law
The IMD exclusion was created for an entirely different mental health landscape than the one we have today, according to the authors. It was originally created to reduce the number of long-term inpatient psychiatric hospital stays that made up the majority of the treatment system for mental illness in the first half of the 1900s. But today the United States has a wide array of community mental health treatment options that did not exist or were much less prevalent in the 1960s, when institutionalization was the primary way to deal with any mental illness. Now, people with mental illness who can live and thrive in their community have more options to do so.
Yet, those with the most serious mental illnesses who may still require inpatient hospital stays to manage their illnesses are unable to get this care in part because the IMD exclusion helped dramatically reduce access to psychiatric beds. Over the course of their lifetime, some people with serious mental illness may require quality services only provided in inpatient hospitals to effectively stabilize their mental health symptoms, such as complex medication changes and long-term rehabilitation.
Movement toward repeal
The authors note the growing bipartisan support for the repeal of the IMD exclusion, as seen in the stopgap measures by both the Obama and Trump administrations to allow states the option to be exempt from the IMD exclusion. They also note that the fears of “snake pit” style mental institutions from earlier times, where patients are subjected to substandard living conditions, are now much more common in jails and prisons, where a disproportionate number of people with serious mental illness end up. Repealing the IMD exclusion is one more way to divert those in need of treatment away from the criminal justice system, homeless shelters and the streets and create a more robust continuum of care for individuals with serious mental illness.
References:
Eide, S., & Gorman, C. (February 2021). Medicaid’s IMD exclusion: The case for repeal. Manhattan Institute.
Kelli South is the research associate at the Treatment Advocacy Center.
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Research Weekly is a summary published as a public service of the Treatment Advocacy Center and does not necessarily reflect the findings or positions of the organization or its staff. Full access to research summarized may require a fee or paid subscription to the publications.