Disability advocates are lining up against a bipartisan bill that they say would direct tens of billions of dollars toward institutionalization all while community-based services are likely to face cuts.
Legislation introduced in Congress this summer calls for repealing Medicaid’s institutions for mental diseases, or IMD, exclusion. The decades-old policy limits states from directing federal Medicaid funds to care for individuals ages 21 to 64 in mental health and substance use disorder facilities with more than 16 beds in many circumstances.
The measure, introduced by U.S. Reps. Salud Carbajal, D-Calif., and Don Bacon, R-Neb., would lift the exclusion for states that submit plans to increase access to outpatient and community-based behavioral health care, boost crisis stabilization services and strengthen coordination between care providers. The lawmakers say their bill known as the Increasing Behavioral Health Treatment Act, or H.R. 4022, would expand access to behavioral health care and improve public safety.
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“I introduced the Increasing Behavioral Health Treatment Act because, like so many aspects of our health care system, the status quo is failing,” Carbajal said. “Every day, individuals experiencing mental health crises are left without support — too often ending up in jail cells or on the streets instead of receiving the care they urgently need. This bill aims to change that unacceptable reality.”
However, the effort is sparking concern among disability advocates.
The bill “has the potential to upend decades of federal policy and legislative initiatives designed to help states support community services, undermining the rights of people with disabilities to receive services in the most integrated setting appropriate,” reads a letter to leaders of the House Energy and Commerce Committee organized by the Consortium for Constituents with Disabilities, or CCD. The letter sent late last month is signed by more than 60 disability groups including the American Association of People with Disabilities, The Arc of the United States, the Autistic Self Advocacy Network and the National Disability Rights Network.
“While we support efforts to increase the availability of and access to quality mental health and substance use disorder services, repealing Medicaid’s Institutions for Mental Diseases (IMD) rule has the potential to do the opposite, particularly at a time when Medicaid community services are expected to shrink considerably as a result of the One Big Beautiful Bill Act,” the letter states. “Spending tens of billions of dollars on institutional care may create more inpatient beds but will do nothing to address the root cause of the problem fueling demand for hospital beds: severe gaps in community services. Indeed, it is likely to increase those gaps in community services, fueling more demand for hospitalization.”
A 2023 Congressional Budget Office analysis estimated that eliminating the IMD exclusion would increase federal spending between 2024 and 2033 by $7.7 billion to $38.4 billion.
Carbajal said his bill is supported by the National Alliance on Mental Illness, the National Association of Counties, the National Association of County Behavioral Health and Developmental Disability Directors and Major County Sheriffs of America, among other groups.
“People with mental health conditions — just like people with any medical condition — need a range of care options from outpatient services to hospital care,” said Jennifer Snow, national director of government relations, policy and advocacy at National Alliance on Mental Illness, or NAMI. “Updating the IMD exclusion to allow for short-term stays in psychiatric hospitals helps strengthen the mental health system and provides those who rely on Medicaid with more treatment options.”
The National Association of Counties put it more bluntly in a posting outlining support for the proposal.
“Without reforms to the Medicaid IMD exclusion policy, patients will continue to be diverted from capable mental healthcare institutions, leading to an overreliance on emergency departments or leaving residents with no care at all,” officials with the group said.
Disability advocates, however, noted that a three year federal demonstration program allowing states to access Medicaid reimbursement for IMD services found that it did not decrease psychiatric emergency room visits or boarding in emergency rooms and it failed to increase access to psychiatric hospital services.
“While institutions for people with intellectual and developmental disabilities don’t count as IMDs, a significant number of people with IDD do end up in psychiatric institutions due to a lack of community services,” said Jennifer Mathis, deputy director of the Bazelon Center for Mental Health Law, one of the groups that signed the letter.
“The CCD letter was sent not because the bill was gaining traction but rather in an effort to educate congressional offices about the concerns the bill poses and to prevent it from gaining traction,” she said. “At a time when states will be facing historic cuts to their Medicaid programs due to the budget reconciliation bill that Congress recently enacted, it seems particularly important to educate congressional offices about the impact that directing billions of federal dollars to institutional care would likely have on community services.”
