State Medicaid Directors Ask CMS to Consider Longer Coverage of Psychiatric Stays

In a letter to CMS, the National Association of Medicaid Directors (NAMD) contended that a 15-day limit on inpatient psychiatric treatment reimbursement is too short for effective treatment of some patients diagnosed with severe mental illness or substance use disorder.

When CMS finalized a managed care rule last May, it allowed for Medicaid reimbursement only if patients stayed in a mental institution for 15 days or fewer. It based this limit on the finding that the average length of stay among patients admitted for mental health diagnoses was less than 15 days. However, NAMD argued in the letter that the restriction fails to take into account some important exceptions to this average.

The directors said that the 15-day limit on inpatient stays “may not be clinically appropriate for all individuals,” especially those diagnosed with substance use disorder. “States consistently articulate that a 28-day length of stay would allow for more patient-centered” substance abuse care, the letter said.

It also gave the example of patients with severe depression who take medication for 5 to 7 days, then undergo a course of electroconvulsive therapy, which could take an additional 10 to 14 days, bringing them above the 15-day limit. The letter requests that CMS modify the rule to include exceptions for situations like these, otherwise “the 15-day limit may inappropriately incentivize non-standard courses of treatment in these circumstances.”

NAMD raised some of these concerns when the proposed rule was released in July 2015, commenting that the group was “concerned that it will arbitrarily restrict patient care without regard to the patient or their individual treatment needs” and could lead to premature discharges. These restrictions, they argued, would not achieve parity for Medicaid beneficiaries with mental illnesses.

In the recent letter, NAMD indicated that the directors’ concerns now extended beyond those mentioned in their comments on the proposed rule. States preparing for implementation of the rule have realized “a number of unanticipated and complex issues for the federal and state partners, including the impact on the most vulnerable Medicaid clients,” they wrote.

CMS has not responded to the letter, but a Modern Healthcare article raised the possibility that President-elect Donald J. Trump could consider the request. Reforming mental health was a campaign talking point for Trump, who has not yet issued specific policy suggestions on how to do so.