The Maryland Department of Health and Mental Hygiene (DHMH) is seeking a federal waiver from the Institution for Mental Diseases (IMD) Exclusion that will enable the Maryland Medicaid Program to expand the scope of available substance use and mental health treatment options and leverage federal funding for additional cost-savings. As announced in a DHMH press release:

The federal IMD Exclusion prohibits Medicaid reimbursement for adults between the ages of 21 and 64 who are receiving services provided in “a hospital, nursing facility, or other institution of more than 16 beds that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care and treatment of individuals with mental diseases.” Because of this non-payment policy, many Medicaid enrollees with acute psychiatric and addiction treatment needs are referred to hospital emergency departments and general acute care inpatient units, rather than smaller, community-based specialized providers with expertise to care for these individuals.

If the U.S. Centers for Medicare and Medicaid Services approve Maryland’s waiver application, Maryland will be able to reimburse IMDs for the treatment of Medicaid enrollees aged 21-64 with acute psychiatric and substance-use-related needs and would receive federal matching dollars. Cost savings would be generated at both the state and federal levels by enabling the state to pay for appropriate care in appropriate settings.

“Directing these funds will serve as a continuation of this administration’s efforts to fight substance use disorders and overdoses in Maryland,” said Van T. Mitchell, state health secretary, in a statement. “This funding will be used to direct outreach to these populations, to recruit them into medication-assisted treatment at their greatest time of need.”