Title XIX Benefits: Inpatient Psychiatric Services for Under 21

© Association of Administrators on the Interstate Compact on Adoption and Medical Assistance (AAICAMA) Updated 2013

Making Making MedicaidMedicaidHappenHappen

Title XIX Benefits:

Inpatient Psychiatric Services for Under 21

Sharon McCartney, JD, AAICAMA Consultant

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Medicaid & Psychological Services

Psychological services are generally optional under Medicaid. States have the option of whether to provide ANY psychological services to Medicaid eligible individuals.*

*Note: All states choose to provide some form of psychological service(s) under the state’s Medicaid State Plan and EPSDT functions to mandate that Medicaid-eligible youth under age 21 must receive any service determined to be medically necessary .

Cites: §§1902(a)(10)(A), 1905(a) of the Social Security Act and 42 C.F.R. 440 of the Code of Federal Regulations.

© Association of Administrators on the Interstate Compact on Adoption and Medical Assistance (AAICAMA)

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Inpatient Psychiatric Services & IMDs

An inpatient psychiatric facility under Medicaid is known as an Institution for Mental Diseases (IMDs).

General prohibition on Medicaid payment for any services provided to residents of an IMD.

Exception to prohibition exists for inpatient psychiatric hospital services for individuals under age 21.*

Note: If services began prior to the age of 21, coverage may continue to the earlier of the youth’s 22nd birthday or the date the services are no longer required.

Cites: Section 1905(a)(16) and as defined in Section 1905(h) of the Social Security Act. See also 42 C.F.R. §§ 435.1008 , 440.160 and 441 Subpart D and the State Medicaid Manual §4390.1.


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What is an IMD?

Definition in Medicaid law:

‘A hospital, nursing facility, or other institution of >16 beds that is primarily engaged in providing diagnosis, treatment or care of persons with mental diseases, including medical attention, nursing care and related services. Whether an institution is an institution for mental diseases is determined by its overall character as that of a facility established and maintained primarily for the care and treatment of individuals with mental diseases, whether or not it is licensed as such.’

Cite: 42 C.F.R. §435.1010.


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Federal Mandate: Inpatient Psychiatric Under 21

States have a mandate to provide inpatient psychiatric services to individuals under age 21 regardless of Medicaid State Plan.

EPSDT functions to create this mandate.

There must be a determination of ‘medically necessary’in or order to receive inpatient psychiatric services under age 21. Note: Determination cannot be made by family or state staff. Must be made by an independent team certifying the need for services ; includes a physician/child psychiatrist with knowledge of the child’s situation.


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Coverage: Inpatient Psychiatric Under 21

Medicaid coverage inpatient at an approved facility is somewhat limited. Services include:


1. Room/Board

2. Supervision

3. Direct mental health services

4. Other services as indicated necessary in the Plan of Care (hooray!)

Cites: 42 C.F.R. §§ 440.160 and 441 Subpart D (441 .150-156.

Note: These cites generally cover the law associated with the provision of Medicaid services for individuals under age 21 in psychiatric residential facilities and can be referenced for the entirety of this presentation.

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Individual Plan of Care

Individual plan of care: Written plan developed for each recipient to improve her condition to the extent that inpatient care is no longer necessary.

The plan must:


1. State treatment objectives

2. Prescribe an integrated program of therapies, activities, and experiences designed to meet the objectives (Note: creativity is born here.)

Cites: 42 C.F.R. § 441.155.

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The plan must be reviewed every 30 days by the medical/treatment team to:


1. Recommend changes in the plan as indicated by the recipient's overall adjustment as an inpatient.

Changes in the plan are an opportunity to include new or adjust existing services to better meet the medical needs of thechild and provide MORE ROBUST Medicaid benefits while in residential treatment.

Cites: 42 C.F.R. § 441.155.

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State staff must proactively work with families to help create a comprehensive Plan of Care.

Creativity: Create the most comprehensive plan. Think broadly about the specific medical and mental health needs of the child/youth and include all services related to those needs. Examples:

1. Physical: CP/leg braces. Coordination challenges, propensity to fall = orthopedic needs

2. Emotional: Anger issues. Age/size of youth, propensity to physical outbursts = orthopedic needs


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If a service other than room/board, supervision or direct mental health is received during an inpatient psychiatric stay under Medicaid, that service must be included in the Plan of Care.

If a child is temporarily off-site while a registered inpatient under Medicaid and receives emergency or other medical services not included in the Plan of Care, then these services are not covered under Medicaid.


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Facility Requirements

A psychiatric facility must meet federally-set requirements as a provider of psychiatric services to the under age 21 population in order to be eligible to receive federal funding (FFP).

CMS link: http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Long-Term-Services-and-Support/Inpatient-Psychiatric-Services-for-Individuals-Under-Age-21.html

Cites: 42 C.F.R. 440.160, 441.151 and 441 Subpart D in general.


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Meeting the Psych Under 21 Mandate

States may meet the mandate using one of three (3) approaches distinguished by the type of facility used.

Facility types:


1. Psychiatric hospital (‘stand alone’ facility)

2. General hospital (inpatient, psychiatric unit)

3. PRTF (Psychiatric Residential Treatment Facility)

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Services must be received in a state-recognized IMD facility.

The recognition is set by the state in which the facility is located.The facility designation is a part of the state’s Medicaid State Plan.Services received in an IMD facility not designated in the Medicaid State Plan are not FFP eligible.


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Inpatient psychiatric facilities for “psych under 21” are surveyed for compliance by the State Survey Agency.

Facilities must adhere to the Conditions of Participation (CoP) and accreditation outlined in Medicaid law to receive Medicaid coverage (FFP eligible).


Cite: 42 C.F.R. 440.160, 441.151.

Note: CoPs are set in Medicaid law for facilities (hospitals, PRTFs, etc). Accredited by the Joint Commission on Accreditation of Healthcare Organizations, the Council on Accreditation of Services for Families and Children, the Commission on Accreditation of Rehabilitation Facilities, or by any other accrediting organization, with comparable standards, that is recognized by the state (in which the facility is located).

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Interstate: Psych Under 21 Mandate

The interstate effect of the mandate depends entirely on the type of adoption assistance received.

Title IV-E: State in which the inpatient facility is located is responsible for XIX coverage.

Non title IV-E: State in which the child is considered a resident (state of origin/state of parent’s residency) is responsible for XIX coverage.

Note: Facility must be legitimate/state recognized, adhering to accreditation and CoPrequirements.


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The special definition of residency given to title IV-E recipients does not apply to non-title IV-E recipients (state-funded).

Effect: A state-funded AA or FC child placed in an out-of-state residential facility is considered a resident of the state which arranged for/made the placement, or the resident state of the adoptive parent(s) not the state where the residential facility (school, psychiatric hospital, etc.) is located.

Cite: 42 CFR 435.403(e).


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Important Notes for Interstate Practice State must recognize the IMD facility in which a child is placed to receive FFP/FMAP.

Child placed in facility type that is NOT in the Medicaid State Plan and facility meets IMD criteria, there is NO coverage WHATSOEVER. The legal application reverts back to the exclusion and no exception for under age 21 will apply. (Note: Utah example, PRTF not a covered provider type.)


Discussion of application to follow. State scenarios explored.

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Important Notes for Interstate Practice: Adoptive Family

Adoptive parents must work with the state agency PRIOR to placement to choose a facility that is recognized by the state in which it is located and to create the most comprehensive, individualized Plan of Care in order to access Medicaid and receive the fullest range of services for their child.

IF recognized, then room/board/supervision/direct mental health and services included in the Plan of Care are covered by Medicaid while the youth is a registered patient in the facility. The adoptive family/AA state would be responsible for any costs incurred outside this coverage.

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Important Notes for Interstate Practice: Responsible State

If a state allows placement in a unrecognized facility or a family places their child in an unrecognized facility:

FFP is NOT available for room/board and supervision. Other, acceptable Medicaid covered services may be eligible for FFP.

If the facility qualifies as an IMD, then FFP is NOT available for ANY services received in the facility.


CMS, May 2012: ‘The issue of how EPSDT overlays all of this continues to get a lot of attention at CMS. The historical policy has been ‘no’ – the CMS interpretation of the statute indicates that only payment for psych under 21 services (provided in appropriate PRTFs or hospitals) may be made. The rest of the EPSDT mandate doesn’t apply in these situations. If a child is residing in a regular IMD, there is no payment, period. CMS relays that this policy stance continues to be examined and is an on-going issue for the agency as a whole.’

CMS, November 2012: Please rejoice with AAICAMA and see the Center for Medicaid and CHIP Services (CMCS) Informational Bulletin dated 11.28.12.Subject: Inpatient Psychiatric Services for Individuals under age 21.

CMCS Informational Bulletin 11.28.12

© Association of Administrators on the Interstate Compact on Adoption and Medical Assistance (AAICAMA) 16

CMCS Informational Bulletin of November 28, 2012 re: Inpatient Psychiatric Services for Individuals under age 21

The skinny: States can apply for State Plan amendments so that “other covered services can be furnished as part of the inpatientpsychiatric facility benefit even when payment was made to an individual practitioner or supplier other than the inpatient psychiatric facility itself when such services are:

1. Furnished to a child residing in such a facility2. Authorized under the child’s plan of care3. Provided under an arrangement with the facility.”



CMCS Informational Bulletin of November 28, 2012 re: Inpatient Psychiatric Services for Individuals under age 21

“Payment for services does NOT need to be bundled into a single per diem rate for the IMD facility, but could be authorized under the approved State plan to be paid directly to the treating practitioner.”

“CMS… seeks to clarify the ability that states have in covering and paying for a MORE ROBUST benefit for children receiving the inpatient psychiatric facility benefit.”



AAICAMA Secretariat Contact:Ursula Gilmore: [email protected]

Presenter Contact:Sharon McCartney: [email protected]

AAICAMA Contact Information


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Title XIX Benefits: Inpatient Psychiatric Services for Under 21

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