Emma Pelkey Co-Authors AHLA Article on Federal Funding for Mental Health Treatment

June 08, 2021

Portland Associate Emma Pelkey recently co-authored a briefing for the American Health Law Association’s (AHLA) Behavioral Health Task Force, titled “Federal Funding for Mental Health Treatment and the IMD Exclusion: Where Do We Stand?” The article discusses the current state of funding for mental health treatment and how Medicaid’s Institutions for Mental Diseases (IMD) exclusion impacts states’ ability to provide mental health services.

Portland, Ore. (June 8, 2021) - Portland Associate Emma Pelkey recently co-authored a briefing for the American Health Law Association’s (AHLA) Behavioral Health Task Force, titled “Federal Funding for Mental Health Treatment and the IMD Exclusion: Where Do We Stand?” The article discusses the current state of funding for mental health treatment and how Medicaid’s Institutions for Mental Diseases (IMD) exclusion impacts states’ ability to provide mental health services. IMD waivers are a powerful tool for states to increase behavioral health services to vulnerable populations in a time of increasing demand. 

The authors open by acknowledging that the federal government historically has not provided funding for serious mental illness or treatment for substance use. They explain that the IMD exclusion prohibits federal financial participation for care provided to Medicaid beneficiaries between the ages of 21 and 64 in a facility with more than 16 beds that primarily provides care to patients with “mental diseases.” They note, however, that part of the 21st Century Cures Act required the Centers for Medicare & Medicaid Services (CMS) to provide direction to state Medicaid agencies on the use of Section 1115 Medicaid waivers for mental health treatment programs for adults and children. The authors observe that the few states that have received the waivers “have indicated that there is a need for coverage for mental health treatment in IMDs to ensure a robust continuum of care.”

Next, the authors pose the question, “So why have so few states sought a Section 1115 waiver for mental health treatment in IMDs when it offers an opportunity to increase access to behavioral health care?” In addressing this query, the authors suggest that perhaps timing may explain states’ failure to seek the waivers, noting that assessing each state’s situation takes time, and the states may have applied for a waiver close to the time of the beginning of the COVID-19 pandemic. Similarly, the authors posit that some states may be waiting to see the results of other states’ evaluations during the waiver process before committing themselves to restructuring their own behavioral health services (which may be necessary as part of the waiver approval process). According to the authors, states may also be waiting to observe how the Biden administration handles the IMD exclusion.

Finally, the authors discuss the various advocacy groups that support and oppose Section 1115 waivers, describing their respective positions. The article closes with the authors’ observation that renewed discussions regarding the “inadequacy and unavailability of behavioral health services” have arisen nationwide as a result of the COVID-19 pandemic. They conclude, “Given that the need for a comprehensive range of behavioral health services remains strong across the nation, it will be interesting to see if more states begin to apply for Section 1115 for mental health treatment in IMDs in the coming years.”

Ms. Pelkey is a member of Lewis Brisbois’ Healthcare, Labor & Employment, and Healthcare, Regulatory & Compliance Practices. She focuses her practice on healthcare litigation and health law, including behavioral health, provider issues, medical liability, risk management, and regulatory compliance. Additionally, she represents employers regarding a wide range of employment law issues, including discrimination and harassment, wage and hour, disability accommodations, and terminations.

You can view the full AHLA article here (subscription required).