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July 24, 2019

AHCCCS to Explore Options to Expand Services for Individuals in Certain Residential Behavioral Health Facilities

AHCCCS is awaiting policy guidance from the Centers for Medicare and Medicaid Services (CMS) in order to make operational decisions regarding the state’s ability to expand treatment coverage options for members who receive services in Institutions for Mental Disease (IMDs). IMDs are facilities including hospitals, nursing facilities and other institutions that have more than 16 beds and are primarily engaged in providing behavioral health diagnosis, treatment, or care to adults and children over age 16 in a residential treatment setting.

Prior to managed care regulation changes in 2016, Arizona’s contracts with Managed Care Organizations (MCOs) permitted the MCOs to cover inpatient services provided in IMDs regardless of length of stay. Federal regulation now prohibits federal funding to MCOs for members ages 21-64 who remain in an IMD for more than 15 days during a calendar month.

As a result of recently enacted federal law and CMS policy changes, states now have the option to expand IMD stays for individuals with substance use disorder (SUD) treatment needs and with behavioral health treatment needs through a State Plan Amendment (SPA) or a Section 1115 Waiver amendment.

A Medicaid State Plan is an agreement between the state and the federal government describing how that state administers its Medicaid programs. It gives an assurance that a state will abide by Federal rules and may claim federal matching funds for its program activities. A Section 1115 Waiver allows the federal government to waive certain Medicaid requirements in order to allow states to pilot and evaluate innovative approaches to serving members.

AHCCCS is exploring both the SPA and Waiver options to determine how best to expand benefits with the least burdensome requirements on registered providers, contracted health plans, and AHCCCS administration.

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