CMS Demonstration Project Will Allow Reimbursement for Emergency Psych Care

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The Centers for Medicare & Medicaid Services announced March 13 that 11 states and the District of Columbia will participate in a $75 million demonstration project aimed at improving emergency care for low-income patients with mental disease.

The Medicaid Emergency Psychiatric Demonstration will test whether Medicaid enrollees who are experiencing a psychiatric emergency receive better care when the institutions treating them receive Medicaid reimbursement. Historically, federal law has prohibited Medicaid from paying for mental disease services provided to Medicaid enrollees between the ages of 21 and 64, CMS said.

As a result, when Medicaid enrollees need emergency psychiatric treatment, they often go to regular hospital emergency departments—where services may not be matched to their needs—or to psychiatric hospitals. There, the care may be appropriate, but Medicaid reimbursement is not provided, CMS said in a press release announcing the project.

Ensuring Patient Care

“This new demonstration will help ensure patients receive appropriate, high quality care when they need it most and save States money,” acting CMS Administrator Marilyn Tavenner said in a statement.

Requiring the nearest emergency department to care for a person in need of psychiatric treatment, Tavenner added, “may not be an efficient use of health care dollars, and may be detrimental to vulnerable patients—especially when they could immediately be treated in the setting with more appropriate care.”

The demonstration project, funded under the Patient Protection and Affordable Care Act, will provide a total of up to $75 million in federal Medicaid matching funds over three years to 11 states and the District of Columbia.

The funds will enable private psychiatric hospitals and other institutions treating patients with mental problems to receive Medicaid reimbursement for emergency care provided to Medicaid enrollees ages 21 to 64 who have an acute need for treatment, CMS said.

Assessing Quality, Costs

The demonstration project will assess whether providing Medicaid reimbursement for the treatment of psychiatric emergencies improves the quality of care and lowers costs. It also will gauge whether expanding Medicaid reimbursement reduces the burden on emergency departments at general acute care hospitals, CMS said.

The demonstration will be administered by the Center for Medicare and Medicaid Innovation, created under PPACA, to test innovative payment and service delivery models with potential to reduce program expenditures while preserving or enhancing quality of care, CMS said.

Along with the District of Columbia, the states participating in the demonstration project are Alabama, California, Connecticut, Illinois, Maine, Maryland, Missouri, North Carolina, Rhode Island, Washington, and West Virginia.

For More Information

A CMS fact sheet about the project is at

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