	Background

CMS and states jointly finance and administer the Medicaid program,  which finances health care, including behavioral health services, for low- income individuals and families. Since 2010, Facility Capacity Nationwide Has Increased for Mental Health Treatment and Remained Constant for Substance Use Treatment, with Variation Across States

		The Capacity of Mental Health Treatment Facilities Increased Nationally from 2010 to 2014, although There Was Significant Variation Across States

Capacity for inpatient or residential mental health services for the adult  population increased from 2010 to 2014, as measured by numbers of  facilities providing services, the number of beds designated for these  services, and the number of beds per 100,000 adults, according to N- MHSS data from those years. The number of beds designated for inpatient or residential substance use  services per 100,000 adults increased slightly, from 57 to 58.4 between  2010 and 2015. Based on size and type of facility, we  estimated that nearly half of the inpatient and residential substance use  treatment facilities in 2010 and 2015 may have been IMDs, and thus  federal Medicaid funding would be unavailable for adult Medicaid  beneficiaries due to the IMD exclusion. CMS’s IMD Policies Have Changed Over Time to Allow Payments in Certain Circumstances

Over time, CMS policies have changed to allow some states to finance  the provision of care for adult Medicaid beneficiaries in IMDs, in certain  circumstances. V for  a timeline of changes related to the Medicaid IMD exclusion.) According to CMS officials, beginning with Tennessee in 1993, HHS  approved section 1115 demonstrations in 9 states that allowed states to  pay for behavioral health services in IMDs. By 2009,  CMS officials said that the authority to pay for IMD costs in all of the  states was phased out, except in Massachusetts. In addition to Massachusetts’s demonstration, CMS has recently  approved applications from some, but not all states, for section 1115  demonstrations that allow states to pay for substance use or mental  health services provided in IMDs. For example,  although Maryland was approved to provide substance use treatment  services in IMDs under the substance use demonstration guidance  issued in July 2015, the state had applied at the same time to provide  mental health services in IMDs. Historically, Medicaid managed care plans had  the flexibility to provide covered services in alternate settings under  certain conditions, such as behavioral health services in IMDs. In May  2016, CMS issued a final rule designed to modernize its Medicaid  managed care regulations. The rule codified this policy, known as the “in  lieu of” policy, under which managed care plans may provide alternative  services or services in alternative settings, such as IMDs, in lieu of  covered services or settings if they are medically appropriate and a cost- effective substitute for covered services or settings. CMS set a 15-day  per month limit on the number of days a beneficiary may receive  behavioral health services in an IMD for which managed care plans will  receive payment. Selected States Use Multiple Approaches to Provide Inpatient and Residential Behavioral Health Services to Adult Medicaid Beneficiaries, and Reported Some Access Challenges

		Selected States Use a Variety of Options to Provide Inpatient and Residential Behavioral Health Services to Adult Medicaid Beneficiaries, Including Medicaid and State Funds

While there are no national data on how states finance services provided  to adult Medicaid beneficiaries in IMDs, officials in our six selected states  told us they used or reported using between 2 to 4 approaches to provide  inpatient and residential behavioral health services to adult Medicaid  beneficiaries from 2012 to 2016 (see table 1). Most of these state  Medicaid officials said that when their states were unable to use Medicaid  funds to finance services in IMDs, they relied on other funding sources,  including state-only funding, or facility officials said they provided  uncompensated care. Selected States Reported Access Challenges, but Lacked Data on Extent of Problem

The six states we selected generally did not have data to document  access challenges for adult Medicaid beneficiaries seeking IMD-type  services, but state or facility officials from each of these selected states  shared examples of access problems. Although state officials often did  not characterize the prevalence of the problems, some facility officials we  spoke with said they regularly turned away patients, maintained waitlists,  and that enough demand existed to warrant expanding capacity. Agency Comments

We provided a draft of this report to HHS for review. HHS provided  technical comments, which we incorporated as appropriate. Center for Behavioral Health Statistics and Quality.
Why GAO Did This Study

Medicaid is the largest source of national funding for behavioral health services—mental health and substance use services—with nearly $71 billion in projected 2017 spending. However, Medicaid excludes payments for beneficiaries aged 21-64 who are residents of IMDs. As a result, questions have been raised about adult Medicaid beneficiaries' access to services typically provided in IMDs—namely inpatient or residential behavioral health treatments.
GAO was asked to examine questions related to any potential effects of the IMD exclusion on adult beneficiaries. Among other things, this report describes (1) recent trends in the capacity of facilities that provide inpatient and residential behavioral health services; (2) how CMS policies related to the IMD exclusion have changed over time; and (3) how selected states finance IMD services for adult Medicaid beneficiaries. GAO examined federal laws, regulations, and guidance, interviewed officials in the Department of Health and Human Services (HHS), the department that includes CMS, and analyzed the most current data from three national HHS surveys. GAO also interviewed Medicaid officials in six states selected based on geography and use of options to provide care in IMDs for adult Medicaid beneficiaries. Additionally, GAO interviewed representatives of nine behavioral health facilities in the six states referred to GAO by state Medicaid officials and a hospital association. Selected states' and facilities' experiences are not generalizable. HHS provided technical comments on a draft of this report, which GAO incorporated as appropriate.

What GAO Found

Between 2010 and 2015, inpatient and residential behavioral health services capacity has gone up for adult mental health treatment and stayed about the same for substance use treatment. GAO found that for adult mental health treatment, inpatient and residential capacity increased from about 61 to 69 beds per 100,000 adults between 2010 and 2014. For adult substance use treatment, inpatient and residential capacity remained fairly constant between 2010 and 2015, increasing from 57 to about 58 beds per 100,000 adults. In both types of behavioral health services there was significant variation across states.
GAO also found that over time, the Centers for Medicare & Medicaid Services' (CMS)—the agency that oversees state Medicaid programs—changed policies to allow some states to finance care for adult Medicaid beneficiaries in institutions for mental disease (IMD), in certain circumstances. IMDs are generally facilities larger than 16 beds that primarily provide inpatient, residential, or other services to individuals with behavioral health conditions. These policy changes included the following:
Medicaid demonstrations. Beginning in 1993, CMS officials said they approved demonstrations in nine states, allowing federal funds to cover behavioral health services in IMDs; these demonstrations were largely phased out by 2009. In July 2015, CMS announced a demonstration that would allow states to use Medicaid funds to cover substance use services in IMDs. As of May 2017, CMS had approved these demonstrations in four states. CMS has also approved applications from some, but not all, states for demonstrations that allow states to pay for substance use or mental health services in IMDs.
Medicaid managed care. In May 2016, CMS issued a final rule that codified a policy, known as the “in lieu of” policy, under which managed care plans may provide alternative services or services in alternative settings, such as IMDs, under certain circumstances. In the rule, CMS set a 15-day per month limit on the number of days an adult beneficiary may receive behavioral health services in an IMD for which managed care plans will receive payment. According to CMS estimates, at least 17 states had likely been allowing such coverage before the rule was issued.
Even with multiple funding sources, selected states reported some problems with adult access to IMD services. While CMS does not collect national data on how states finance services for adults in IMDs, officials in six selected states GAO interviewed stated they used between two to four strategies to fund services for adults in IMDs in recent years, including under Medicaid managed care and demonstrations. State officials said that when their states were unable to use Medicaid funds to finance IMD services, they relied on other options, such as state-only funding, or providing services in smaller non-IMD facilities. Officials from each of the six states shared examples of access problems; for instance, one state reported long waits for inpatient mental health services. In addition, some facility officials said they regularly turned away patients and maintained waitlists.