Waiving ban, feds will pay Missouri to treat substance abuse in mental health hospitals

After a spike in substance use disorder and homelessness during the COVID-19 pandemic, public health advocates and elected officials are seeking to bolster an old tool for treatment – the mental health institution.

In December, the federal government gave Missouri permission to use Medicaid to help people who suffer from a serious mental illness or a substance use disorder spend up to a month in a mental health hospital, a type of treatment that’s been largely forbidden under Medicaid for decades.

The waiver from the Centers for Medicare and Medicaid Services comes as Congress is looking to re-authorize a federal program that ran from 2017 to 2023 allowing states to use Medicaid for people with substance use disorders who stay at a mental health hospital for up to a month.

Medicaid funding is critical because it allows the federal government to pay for some health care for people who do not have access to private health insurance.

“Just like with any health condition, people need a wide variety of care,” said Hannah Wesolowski, the chief advocacy officer for the National Association of Mental Illnesses. “Everyone’s condition is different. And having that full continuum of care available is really important.”

Access to mental health institutions has been limited since the 1960s, when President John F. Kennedy, reacting to horror stories of forced institutionalization, pushed to shut down large mental health institutions in favor of smaller, community-based health centers.

But most of the community health centers were never built and the ones that were often lacked significant funding from the federal government, shifting pressure onto the existing systems at the state level.

States have been blocked from accessing federal Medicaid funding for patients who are at institutions for mental diseases – called the IMD exclusion – since it was first passed in 1965. But over time the federal Centers for Medicaid and Medicare Services has granted waivers allowing 36 states to use Medicaid for people with substance use disorders and 12 states to use it for mental health treatment, according to the Kaiser Family Foundation.

All of the waivers only cover a month of service, a limit that helps limit fears of permanent institutionalization among patients and their families.

“When we’re talking about a maximum of 30 days over a 12 month period, we’re not talking about people – as they were before the 50s and 60s – being put in institutions and locked up,” Wesolowski said.

“This is about short-term inpatient care, to help people get well then connecting them to community based care so they can stay well.”

In Congress, bipartisan support exists for the reauthorization of a bill that allows states to get federal reimbursement for substance abuse care, though only three states have taken it. Most, like Missouri, rely on waivers.

Still, it has the support of both of Kansas’ Republican senators, Sen. Roger Marshall and Sen. Jerry Moran.

“Mental health and substance use disorders that are not treated can have devastating effects on individuals, their families and communities as a whole,” Moran said in a written statement. “I support efforts to expand access to health care to help individuals overcome these struggles.”

Kansas is one of the minority of states that hasn’t gotten a waiver to expand Medicaid benefits beyond what’s actually required by the federal government.

The lack of a waiver – combined with the fact that Kansas is just one of 10 states that hasn’t expanded Medicaid benefits to all adults who earned less than $20,120 in 2023 – often means people don’t have access to a full spectrum of mental health care.

Christy McMurphy, executive director of the Kansas Homeless Coalition, said she believed Medicaid funding for mental health hospitals could have a huge impact on people experiencing homelessness in Kansas.

“The state spends all kinds of money to support those hospitals,” McMurphy said.

Rob Santel, community director of Cross Lines, a community outreach center in Wyandotte County, said that currently there is nothing care providers can do to help a homeless person experiencing mental health issues if they do not qualify for involuntary admittance to a mental health hospital.

Santel said any expansion would help people get care instead of being left on the street. He said people are released before they’re ready and regardless of whether they have housing. He said advocates already struggle to get someone hospitalized involuntarily, particularly if they have a substance use disorder.

“If those hospitals can’t bill for Medicaid they’re automatically screening that person out who has substance use instead of bringing them in,” Santel said. “Let’s get them sober, let’s really assess are the symptoms related to substance use or is it related to their mental health?”

More than 2,630 Kansans and more than 6,700 Missourians experienced homelessness in 2023, according to the U.S. Department of Housing and Rural Development’s 2023 report. Across the country, there has been a spike in both homelessness and substance abuse since the worst years of the COVID-19 pandemic.

Some lawmakers in Kansas and Missouri have responded to the spike by proposing legislation that would criminalize sleeping on state land. Last month, the Missouri Supreme Court struck down a law that would make it a misdemeanor if someone is sleeping outdoors on public land after a warning.

Because the law was struck down on technical grounds – the court ruled that it violated a state constitutional requirement that bills deal with just one subject – lawmakers are expected to introduce it again this session.

Kansas lawmakers also showed a renewed interest in focusing on homelessness last year after a Topeka child who had been living in a homeless camp died. Mickel Cherry, 25, has been charged with first degree murder, rape and capital murder.

Last year, lawmakers considered a bill that would have banned sleeping outdoors. The bill mirrored Missouri’s policy. Lawmakers dropped the idea after significant backlash but are expected to consider it again when they return to Topeka this month.

Wesolowski pointed out that substance abuse has been a key focus of lawmakers, as many communities grapple with the ongoing surge in opioid overdoses. She said most people know someone who is either suffering from addiction or has suffered from a mental health crisis.

She pointed out that since the COVID-19 pandemic, around 30% of American adults say they have experienced symptoms of anxiety and depression.

“We’re seeing this significant growth in need,” Wesolowski said. “And what the challenge is, even when there is clinically indicated care that a person may need for inpatient services, that care is often not available. And this IMD exclusion has really played a significant part in limiting the availability of that care.”

The Star’s Kacen Bayless contributed reporting

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