A law hindering treatment for severe mental illness must be repealed

At a time when movements for equity and social justice have captivated the nation’s attention and galvanized activists, one of the most ongoing and notorious forms of discrimination in this country remains enshrined in federal law.

Since 1965, a provision that denies vulnerable Americans with severe mental illness equal access to medically necessary health care services has been embedded within Medicaid’s enabling legislation. 

The so-called Institutions for Mental Diseases (IMD) exclusion is not some nuance of the law, but open and flagrant federally sanctioned discrimination in plain view of lawmakers and the public.

Here’s how this law works: The exclusion prevents federal Medicaid funds from covering inpatient services in a psychiatric facility with more than 16 beds, unless states and facilities meet specific requirements for waivers or utilize other mechanisms that allow for payment. It bars Medicaid enrollees with “mental diseases” from receiving the same level of care that enrollees without severe mental illness receive for physical ailments such as cancer and heart disease. In doing so, the exclusion denies equal protection under the law to the very group of people it is supposed to help.

Congress should repeal this prejudicial practice. That’s why, back in December, my organization and 12 other major mental health groups called for its repeal in a unified vision for mental health care.

Born of good but misguided intentions, the exclusion was meant to incentivize outpatient treatment for individuals with severe mental illness and disincentivize residential treatment. This simplistic and naïve approach to mental health care has led to dire consequences. So many people with severe mental illness are being housed in jails and prisons that they’ve been dubbed “the new asylums.” They are being boarded in emergency rooms for lack of available psychiatric beds. Tragically, they also frequently encounter police, where they are 16 times more likely to be killed than the general population.

Outpatient treatment is one effective part of the continuum of mental health care, but many people with severe mental illness need at least some periods of inpatient treatment to be stable. Individuals with schizophrenia, bipolar disorder, schizoaffective disorder, and other psychotic disorders need different kinds of treatment throughout their lives. The good news is that most individuals living with severe mental illness can become stable and resume their lives once they receive treatment. 

But for the over nine million Americans with severe mental illness who are covered by Medicaid, the exclusion stands as a barrier between them and the inpatient services they need to eventually transition to community-based outpatient treatment. 

Congress can put an end to the discriminatory exclusion and bring equity to Medicaid administration by passing the Increasing Behavioral Health Treatment Act. Sponsored by Rep. Grace Napolitano (D-Calif.), this legislation would strike the exclusion from the law and require states to report on their efforts to strengthen the continuum of mental healthcare for their residents. 

The age-old legislative hindrance to doing the right thing — “it will cost money” — does not apply here. Repealing the exclusion would actually save money. Federal Medicaid funds are already being spent reactively on emergency care for people with severe mental illness who could not access inpatient treatment when they first needed it. Allowing them access to hospital beds at an appropriate time would proactively save money — we should not continue to spend it only when their mental and physical conditions have deteriorated to the point of horrible consequences.

Until Congress repeals the IMD exclusion, states can seek partial relief through the waivers, but this option is sadly underutilized. So far, a paltry nine states and Washington D.C. have applied for mental health treatment waivers. 

Policymakers are failing their constituents at both the federal and state level by not taking advantage of available measures to end healthcare status-based discrimination. Congress needs to show leadership by repealing the IMD exclusion. 

In the meantime, states can pursue waivers. But these are only a stopgap measure to partially address statutory discrimination against a highly vulnerable class of people. 

A just and equitable society can no longer sanction such blatant injustice. Repealing the IMD exclusion will save money and — more importantly — save lives. The time for excuses and delay is over. For the sake of the most vulnerable among us, Congress must act now.

Michael Gray is legislative and policy counsel at the Treatment Advocacy Center, a national mental illness policy nonprofit.