AHCCCS is currently analyzing policy guidance from the Centers for Medicare and Medicaid Services (CMS) in order to make decisions regarding the state’s ability to offer treatment coverage options for members who receive services in Institutions for Mental Disease (IMDs). IMDs are facilities including hospitals, nursing facilities and other institutions that have more than 16 beds and are primarily engaged in providing behavioral health diagnosis, treatment, or care to adults and children over age 16 in a behavioral health residential treatment setting.
Prior to federal managed care regulation changes in 2016, Arizona’s contracts with Managed Care Organizations (MCOs) permitted the MCOs to cover inpatient services provided in IMDs regardless of length of stay. Federal regulation now prohibits federal funding to MCOs for members ages 21-64 who remain in an IMD for more than 15 days during a calendar month.
As a result of recently enacted federal law and CMS policy changes, states now have the option to secure federal funding for longer IMD stays for individuals with substance use disorder (SUD) treatment needs through a State Plan Amendment (SPA) or, for IMD stays for individuals with SUD and/or behavioral health treatment needs, through a Section 1115 Waiver amendment.
A Medicaid State Plan is an agreement between the state and the federal government describing how that state administers its Medicaid program. It gives an assurance that a state will abide by Federal rules and may claim federal matching funds for its program activities. A Section 1115 Waiver allows the federal government to waive certain Medicaid requirements in order to allow states to pilot and evaluate innovative approaches to serving members.
AHCCCS is exploring both the SPA and Waiver options to determine how best to offer benefits with the least burdensome requirements on registered providers, contracted health plans, and the AHCCCS administration. Medicaid agencies must meet numerous requirements in order to receive CMS’ approval for an IMD SPA or Waiver. These include, but are not limited to, implementing specific criteria for IMD provider participation, and maintaining a level of state appropriations and local funding for outpatient behavioral health services for the duration of the SPA or Waiver approval.
Accordingly, the AHCCCS administration plans to survey registered providers and contracted health plans to assess their capacity to meet CMS’ participation standards for the SPA and Waiver options. The survey results will help inform the Agency as it makes decisions regarding the IMD benefit.
