As part of its Medicaid Managed Care final rule, CMS has quietly modified the policy that prohibited Medicaid from paying for stays in mental health institutions. For the fifty years of the Medicaid program's existence, financial responsibility for people with severe mental illness was left to states and not included in the federal match provided. In April, CMS finalized the Medicaid Managed Care final rule, a comprehensive overhaul of the existing managed care regulations that seeks to streamline and align managed care programs with other systems (see WICs article, "Medicaid Managed Care Final Rule Released," April 28, 2016).
Tucked away in the 1400+ pages of the regulation is a provision that permits Medicaid managed care plans to pay for short term stays in institutions of mental disease (IMDs) for up to 15 days. Although the relevant provision in the rule went into effect on July 5, it is expected that there will not be many immediate changes that will benefit Medicaid recipients, as changes will be more gradual as contracts will be revised only as they come up for renewal.
Source: Modern Healthcare