On November 13, 2018, CMS issued a letter to State Medicaid Directors, SMD #18--011 (Letter), announcing strategies to support innovative service delivery systems for adults with serious mental illness (SMI) and children with a serious emotional disturbance (SED). For that same population, the Letter also announced that CMS is making available demonstration projects under its waiver authority in section 1115(a) of the Social Security Act (Waiver). The Letter represents CMS’s current strategies to improve opportunities for Medicaid beneficiaries with serious mental conditions.
Section 12003 of the 21st Century Cures Act mandated that CMS publish the Letter and outline the opportunities for improving care for beneficiaries with SMI and SED. CMS indicates that improving care for such Medicaid beneficiaries is a top priority and that the Letter provides the framework for working with states to improve care. The Letter identifies a host of research indicating that serious mental health conditions can have detrimental impacts on the lives of individuals with SMI or SED, including their families and caregivers. Moreover, the body of research indicates, among other things, a gap between the presentment of conditions and first receiving treatment for SMI or SED. For those reasons and others, CMS hopes the Letter helps improve the care available to adults with SMI and children with SED.
The Letter first addresses the strategies for supporting innovative service delivery systems for adults with SMI and children with SED under existing authorities. One major strategy mentioned in the Letter is earlier identification and engagement in treatment, because individuals with SMI or SED are often first identified as needing treatment in settings other than specialized mental healthcare settings (e.g., schools, hospitals, and criminal justice systems). Therefore, the Letter recommends the development of more robust referral networks to mental health providers, including improving data-sharing capabilities among such providers. The Letter states, “[C]osts associated with developing or maintaining a referral network between other systems and settings . . . with mental health providers may be reimbursable as administrative costs [and that] [s]tate Medicaid agencies should contact CMS for additional information.”
Other strategies mentioned in the Letter include integrating mental healthcare into primary care settings and improving access to crisis stabilization services. Additionally, the Letter includes an appendix, which contains a comprehensive table summarizing key services, strategies, and potential Medicaid authorities that cover certain additional services and activities for improving care for adults with SMI and children with SED.
The second part of the Letter announces opportunities for participation in demonstration projects under CMS’s Waiver authority. The Letter cites to a payment exclusion for services provided to a majority of Medicaid beneficiaries while residing in institutions for mental diseases (IMDs) as a barrier to ensuring adequate access to acute care for beneficiaries with SMI or SED. As part of the demonstration opportunity, CMS is planning to make available federal financial participation amounts for services provided to beneficiaries who are “short-term residents in IMDs primarily to receive mental health treatments.” This may allow states to receive federal matching funds for Medicaid-coverable services provided to such individuals in IMDs. States that are interested in participating in the demonstration project should follow CMS’s Waiver process for submitting proposals, as outlined in the regulations at 42 C.F.R. § 431.412 and 42 C.F.R. § 431.408.
