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Revised Bill Partially Repealing Medicaid Exclusion for Institutional Substance Use Treatment Falls Far Short

The House Energy and Commerce Committee will consider a bill tomorrow to partially repeal a longstanding policy — known as 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 to do more harm than good; Trump Administration guidance on this issue provides a far better approach.

Like the prior version, the revised version would partially repeal the IMD exclusion for five years, letting states use federal Medicaid funds to pay for care delivered to people with SUDs in IMDs.  But unlike the prior version, it would limit eligibility for these services to people with just one kind of SUD: opioid use disorders.  It would also limit residential treatment to 30 days in a calendar year (versus 90 days in the earlier version).

The revised bill includes a new requirement that states have a plan to increase access to community-based services.  But like the prior version, it doesn’t require states to increase investments in these services, which are badly needed in many states.  Many people who leave residential treatment need community-based services to continue their treatment and recovery and get treatment quickly in the event of a relapse.

Limiting residential treatment to adults with opioid use disorders ignores the harm to people with such other SUDs such as the use of alcohol, cocaine, and methamphetamines, and it would have racially disparate effects.  Among black men and women, for example, the mortality rate between 2012 and 2015 was higher for cocaine overdoses than for opioid overdoses, a recent study found.  (Black men were 39 percent likelier to die from a cocaine overdose than a heroin overdose.)  Given these differences, the bill would disproportionately favor residential SUD treatment for white enrollees who have higher mortality rates due to opioids than black adults.

In contrast to the bill’s extremely limited approach, Trump Administration guidance lets states obtain federal waivers from the IMD exclusion that allow them to address the full range of SUDs, which may vary by state and over time as well as by demographic group.  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 cocaine 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.  Eleven states have SUD waivers and 11 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.