Senior Policy Analyst
The House will consider a bill today to partially repeal a longstanding policy — the Institutions for Mental Disease (IMD) exclusion — prohibiting the use of federal Medicaid funds for care of patients ages 21-64 receiving treatment for substance use disorders (SUDs) in facilities with more than 16 beds. Like prior versions of this legislation, the bill would likely do more harm than good; Trump Administration guidance on this issue provides a far better approach.
The bill, which would partially repeal the IMD exclusion for five years, would create two major problems.
First, it would allow the use of federal Medicaid funds for services for people with just one kind of SUD: those with opioid use disorders (OUD). An amendment will also be considered that would add eligibility for individuals using cocaine. The bill would not repeal the IMD exclusion for people who are addicted to other substances, such as alcohol or methamphetamines.
Excluding adults with other SUDs from residential treatment ignores the harm of other SUDs — nearly 8 in 10 adults with an SUD don’t have an opioid use disorder and would be excluded from IMD treatment services under this bill. It would also have racially disparate effects. Among adults with an SUD covered by Medicaid, black adults (17 percent) and those of other races/ethnicities (13 percent) were less likely than white adults (26 percent) to have an OUD versus another SUD. If the amendment to add eligibility for services for those using cocaine is adopted, this will provide access to residential treatment for some additional individuals, but it would nevertheless create an arbitrary hierarchy within SUD treatment.
Second, while the bill requires states to have a plan to increase access to community-based services, it doesn’t require states to increase investments in these services, which are badly needed in many states: roughly 40 percent of counties don’t have an outpatient SUD treatment program. For many people with SUDs, community-based services are a more appropriate treatment option than inpatient care. And even people who receive residential treatment need community-based services to continue their treatment and recovery and get treatment quickly in the event of a relapse. As the federal Medicaid and CHIP Payment and Access Commission noted recently, “while repealing the IMD exclusion could help eliminate barriers to residential treatment, the availability of such resources could also inadvertently divert attention from addressing gaps at outpatient levels of care or result in individuals being placed in institutional settings when they could be more appropriately served in the community.”
In contrast to the bill’s extremely limited approach, Trump Administration guidance invites states to request federal waivers from the IMD exclusion that let them address the full range of SUDs, which may vary by state, by demographic group, and over time. For example, alcohol deaths are much more common than opioid overdose deaths, both nationally and in certain states such as Alaska, where the rate of alcohol-related mortality is more than double the national rate. Other states may have greater needs for services to treat people using methamphetamines and other substances in addition to opioids.
Importantly, SUD waivers also require states to take steps to ensure that people with SUDs have access to other care they need, including preventive, treatment, and recovery services — all provided in accordance with evidence-based standards. Twelve states have SUD waivers and 13 others have proposals pending; the Administration has encouraged other states to apply.
Rather than spending scarce resources on narrow legislation that wouldn't help many people with SUDs or invest in community-based substance use treatment for those with opioid use disorders, Congress could pass legislation to direct the Administration to create a template SUD waiver. That would streamline the process for submitting waivers while also ensuring expanded access to needed community-based treatment.
In addition, any new funding that federal policymakers provide to address the opioid crisis should support a full continuum of services, rather than funding care in IMDs for which states can already receive federal funds through SUD waivers.