Letter to Centers for Medicare and Medicaid Services

In 2011, the Illinois legislature passed a law requiring the State to enroll at least 50% of its Medicaid clients into some type of coordinated, or managed, care by January 2015. The motivating factor was to reduce a fragmented and uncoordinated fee-for-service Medicaid system and to expand a system that would focus on integrated care. In 2014, the Illinois Medicaid program submitted an application to the Centers for Medicare and Medicaid Services (CMS), U.S. Department of Health and Human Services, for a comprehensive waiver under Section 1115 of the Social Security Act that would cover all Illinois Medicaid spending. A major goal of the waiver included reducing the “siloing” of health care delivery that compartmentalizes Medicaid services among various state departments and expanding an integrated delivery system based on functional need rather than diagnosis.

Among its stated goals for mental health services, the State’s 1115 waiver application requested funding for what it terms Specialized Mental Health Rehabilitation Facilities (SMHRFs). These purportedly new facilities were little more than rebranded and repurposed Institutions for Mental Disease (IMD) that are subject to the “IMD exclusion” for Medicaid funding under federal law. Seeking to avoid the IMD exclusion, the State requested funding for SMHRFs as “costs not otherwise matchable” for all five years of the waiver period. On August 21, 2014, Access Living sent to CMS a letter representing Access Living and several other Illinois mental health advocacy organizations, including the member organizations of the Mental Health Summit, that opposed the funding of SMHRFs.