A Rational Approach To Fixing The IMD Exclusion That Limits Beds For The Seriously Mentally Ill

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(1-25-23) A critical shortage of hospital beds for individuals with serious mental illnesses has prompted repeated calls for the elimination of the Institutions of Mental Disease or “IMD Rule.”

The National Alliance on Mental Illness supports getting rid of it, while consumer groups and disability advocates oppose changing the law. The last serious attempt in Congress to end the IMD exclusion happened when former Rep. Tim Murphy (R-Pa.) introduced the Helping Families in Mental Health Crisis Act, back in 2015, but Murphy’s efforts were blocked by Democrats and civil rights groups.

Now newly elected Rep. Dan Goldman (NY), is considering reintroducing legislation to repeal the IMD rule,  and the hope is that he will instead introduce a bill to limit its reach, rather than attempting to eliminate the rule.

 The fact that Goldman is a Democrat and the bill is named in honor of a woman who was pushed in front of a New York subway by a man with untreated mental illness may help it get some traction.

But while the debate about the IMD exclusion always focuses on fears that our nation will return to mass re-institutionalization, another stumbling block will be the expense to Medicaid if the IMD is dropped. Supporters of the IMD Rule claim it will cost the federal government billions of dollars if Medicaid starts paying for mental health hospital beds.

Cheryl Roberts recently wrote about Goldman’s efforts in a New York Daily News editorial. Judge Roberts runs the Greenburger Center for Social and Criminal Justice, which I’ve written about on this blog.

Congress must stop blocking mental health clinics from needed money 
An Editorial by Cheryl Roberts. First published in the New York Daily News

Newly elected Congressman Dan Goldman’s announcement about reintroducing the Michelle Alyssa Go Act is welcomed news. The Act, named after Michelle Go, the young woman pushed to her death in front of a subway train by Martial Simon, a homeless man with serious mental illness, would amend the decades old federal rule at the root of our broken mental health system.

The Institutions of Mental Disease or “IMD Rule” was enacted in 1965 as part of the Social Security Act and denies Medicaid to patients admitted to psycho-therapeutic facilities with more than 16 beds including hospitals, nursing homes and community or so-called congregate care facilities. By restricting federal Medicaid dollars to small residential institutions, Congress rightly figured that service providers would never achieve “scale,” making it impossible for IMD providers to break even, let alone make a responsible profit.

Instead, Congress hoped that by funding community services and eliminating large asylums, poor people with serious mental illness would be served elsewhere, and they have been — in prisons, jails and at the undertakers.

The need for more psychiatric beds whether in-patient or congregate care, is an uncomfortable fact that some would rather ignore, a luxury not possible for parents like Teresa and Dan Pasquini, sisters like Hilary de Vries, or members of Michelle Go’s family.

Like it or not, some people living with serious mental illness would do better having access to financially viable, reasonably sized congregate care residential facilities located close to family and loved ones. Yet for many people, this community-based option has been off the table for nearly 60 years because of the IMD Rule. Without this option and others, including in-patient hospitalization and residential facilities where residents are not completely at liberty to come and go, the much heralded “continuum of care” is not achievable, at least not for everyone.

There is no better proof of this reality and the need for a range of such facilities, than the fact that over the same time period, many of these options have been available to those who can afford private pay residential and in-patient facilities. This reality demonstrates that IMDs above 16 beds are not inherently bad, we just don’t want to pay for good ones, at least not for poor people. Instead, we have stood by and watched as our prisons and jails filled up with poor people living with mental illness, especially Black and Brown people, who landed in the criminal justice system after the mental health system failed them, their loved ones and the innocent victims and their families.

Ironically, in the end, the IMD fundamentally undercut the gold standard of our mental health care system: ensuring access to community-based mental health services as part of a broad continuum of care. By drawing a crude line in the sand at 16 beds for all IMDs, Congress over-simplified both the problem and the solution needed to address the very real concerns associated with the large, underfunded snake-pit mental health asylums of old.

As Goldman reintroduces legislation to amend the IMD Rule, rather than seeking a wholesale repeal of the rule, the amendments should be drawn with more precision. Otherwise, not only will complete repeal of the IMD be dead on arrival due to its high cost, it will also unnecessarily raise real concerns about the government’s ability to control very large scale asylums and prevent some of the abuses of the past.

Rather, instead of once again taking a crude, one size fits all approach to Medicaid funding for mental health treatment, Congress should create different bed limitations for different kinds of facilities. For example, members might find that 36-bed congregate care facilities would be both humane for clients and financially viable for service providers. Similarly, raising the legal bed capacity for in-patient psychiatric hospitals to 100 or 150 might enable New York City’s public Health + Hospitals to offer high quality, safe, therapeutic and humane options for New Yorkers in need of that level of care.

Not only would extending the continuum of care be the humane option for those living with serious mental illness and their families, but it would also improve public safety and save money by preventing people with serious mental illness from entering into the criminal justice system in the first place.

It’s time for Congress to get this one right. To be thoughtful but to delay no longer. Michelle Go and Martial Simon deserved better, so did their loved ones.

Roberts is a part-time City Court judge in Hudson, N.Y., where she presides over the Mental Health Court and is the executive director of the Greenburger Center for Social and Criminal Justice.

About the author:

Pete Earley is the bestselling author of such books as The Hot House and Crazy. When he is not spending time with his family, he tours the globe advocating for mental health reform.

Learn more about Pete.