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(2-26-21) A conservative think tank has joined a growing national chorus calling for an end of a federal rule that discourages states from building psychiatric hospitals and providing long-term, in-patient care for the seriously mentally ill.
The Manhattan Institute argues in a new report released this week that the Medicaid’s IMD Exclusion rule has outlived its usefulness and should be repealed.
President Trump’s President’s Commission on Law Enforcement and Administration of Justice and the Interdepartmental Serious Mental Illness Coordinating Committee created by the Obama Administration also have called for dropping the rule.
What is the IMD Exclusion and why should you care?
It’s a rule that has been around since 1965 that discourages states from building and supporting large psychiatric hospitals and pushes them instead to provide community based treatment. The so-called “16 bed rule” accomplishes this by denying states Medicaid reimbursement for adults between the ages of 22-to-64 if they are treated in psychiatric hospitals and other facilities which have more than 16 beds. States must pay 100 percent of the cost of care for the seriously ill in most long-term psychiatric hospitals, compared to 50 percent for those treated in the community.
The new report’s authors, Stephen Eide and Carolyn D. Gorman, provide a thoughtful argument in favor of dumping the rule.
They document how difficult it is for parents and others to find hospital beds when someone is in the midst of a psychiatric crisis. It is not unusual for individuals to be turned away from emergency rooms or “boarded” in them for several days waiting for a hospital bed to become available. The lack of treatment beds also leads to individuals, who can’t get help, being arrested. The authors argue that Americans with serious mental illnesses simply can’t always get the long term help that they need in a community setting.
The 16 bed rule was enacted, in part, to put an end to warehousing patients in huge state hospitals, and those who support keeping it fear that state hospitals, once again, will become giant “snake pits” if the rule is repealed.
The authors of the Manhattan Institute report disagree.
They claim safeguards are in place now that weren’t years ago. Patients must be considered a danger to themselves or others before being held against their will in a state hospital. Many more treatment programs are available now than when state hospitals were the only choice. Federal laws, especially the Supreme Court’s Olmstead ruling, which requires individuals with mental illnesses be held in the least restrictive settings, will insure patients aren’t abused and forgotten in state hospitals. Plus, every state has a Protection and Advocacy Agency, specifically designed to investigate complaints about abuse in state hospitals and other long term facilities.
Modern psychiatric hospitals “are not designed as isolation wards” and “policies on seclusion and restraint are drastically changed” from the old days, the author’s wrote.
Opponents to dropping the rule warn that having Medicaid reimburse states for long term care in larger hospitals will blow up the Medicaid budget, costing as much as $1 trillion. They argue that states would reduce their spending on community care funding if given a choice between community programs and state hospitals.
The authors of the Manhattan Institute report argue the costs would be $5.4 billion spread over a ten year period and there would be no incentive for states to reduce spending on community programs.
Republicans attempted to eliminate the IMD Exclusion when former Rep. Tim Murphy (R-Pa) drafted the Helping Families In Mental Health Crisis Act. (Murphy was credited as an adviser to the Manhattan Institute Report.) But consumer groups, such as Mental Health America, and Disability Rights advocates strongly opposed ending the rule and Democrats successfully blocked Murphy’s language when his bill was incorporated into the 21st Century Cures Act in 2016.
Channeling the late D. J. Jaffe, who was a contributor at the Manhattan Institute, the authors argue that community based mental health services simply fail to help the seriously mentally ill who need long-term care to recover. Community services are failing this group, they argue, partly because of where they are directing their resources and efforts.
“As the number of diagnoses has expanded – and the number of Americans diagnosed at some point in their lifetimes with a mental disorder has increased – the number of claimants on public mental health resources has increased.”
In other words, what Dr. E. Fuller Torrey warned decades ago remains true.
We prefer to spend limited tax dollars and devote time to helping the “worried well” rather than those who need treatment the most.
You can read the full Manhattan Institute report here.
(Do you believe the IMD Exclusion should be dropped? Have you had trouble securing a hospital bed for someone in crisis? Would ending it hurt community services and turn back the clock to “snake pit” hospitals? Let me know your thoughts on my Facebook page.)
About the report’s authors:
Stephen Eide is a senior fellow at the Manhattan Institute and contributing editor of City Journal. He researches state and local finance and social policy questions such as homelessness and mental illness. He has written for many publications, including National Review, New York Daily News, New York Post, New York Times, Politico, and Wall Street Journal. He was previously a senior research associate at the Worcester Regional Research Bureau. Eide holds a B.A. from St. John’s College in Santa Fe, New Mexico, and a Ph.D. in political philosophy from Boston College.
Carolyn D. Gorman is a policy analyst on issues related to serious mental illness and has served as a board member of Mental Illness Policy Org., a nonprofit founded by the late DJ Jaffe. She was a senior project manager at the Manhattan Institute for mental illness policy and education policy. Gorman served on the U.S. Senate Committee on Health, Education, Labor and Pensions. Her writing has appeared in the Wall Street Journal, New York Daily News, New York Post, City Journal, National Review, and The Hill. Gorman holds a B.A. in psychology from Binghamton University and will graduate with an M.S. in public policy from the Robert F. Wagner Graduate School of Public Service at New York University in 2021. Twitter: @CarolynGorm 
From the report:
Medicaid’s IMD Exclusion was crafted for an entirely different era. During the last half-century, America built a system of community-based mental health services that did not exist in 1965. Income-support programs for the disabled, assertive community treatment, clubhouse programs, supportive housing, assisted outpatient treatment, supported employment, peer support services—these either did not exist in the 1950s, or they operated on a much smaller scale than now. Nevertheless, a small subset of severely mentally ill individuals still needs inpatient treatment on a short-term, intermediate-term, and long-term basis. The IMD Exclusion inhibits those individuals’ access to medically appropriate care. ..
About the author:
