HR-10270-119
Referred to the House Committee on Energy and Commerce.
Sponsored by Daniel Goldman (D-NY)
What it does
This bill would amend Medicaid's "institution for mental diseases" (IMD) exclusion so that certain facilities—certified community behavioral health clinics, community mental health centers, crisis receiving and stabilization facilities, and mental health/substance use urgent care facilities—no longer count as IMDs. This would allow Medicaid to reimburse these facilities for services even though the IMD exclusion normally bars federal Medicaid payment to mental health facilities with more than 16 beds. It also requires HHS to issue implementation guidance within 180 days and report to Congress within one year on facility utilization and effects on emergency room use, psychiatric hospitalization, and incarceration rates.
Who benefits
Medicaid enrollees experiencing mental health or substance use crises, who would gain access to short-term crisis stabilization and urgent care facilities covered by Medicaid; crisis facility operators and community mental health centers that would gain a new reimbursement stream; law enforcement and emergency medical personnel who could refer individuals to these facilities instead of jails or emergency rooms; state Medicaid programs seeking alternatives to costly ER and inpatient psychiatric care.
Who is hurt
States would bear new administrative and matching-fund costs to certify and oversee these facilities; federal and state Medicaid budgets would face increased spending as more facilities become eligible for reimbursement; traditional psychiatric hospitals and larger IMDs could see reduced patient volume as crisis facilities absorb short-term cases; taxpayers generally, to the extent this increases Medicaid outlays.
Supporters argue
Supporters argue the current IMD exclusion, designed decades ago to prevent institutionalization abuses, now blocks Medicaid coverage for modern short-term crisis stabilization models that keep people out of jails and emergency rooms. They cite the growth of the 988 crisis line and contend that without Medicaid reimbursement for crisis receiving facilities, states lack the funding to build out crisis response infrastructure that diverts people from costly, less appropriate settings.
Opponents argue
Opponents argue that expanding Medicaid-reimbursable exceptions to the IMD exclusion could increase federal and state spending without firm cost controls, since the bill sets no funding cap and could be interpreted broadly by facilities seeking certification. They contend that carving out additional facility types risks undermining the original policy rationale for the IMD exclusion and may shift costs onto state Medicaid budgets that already face fiscal strain.
Constitutional context
Congress is exercising its Spending Clause authority (Art. I, §8, cl. 1) to set conditions on Medicaid funding, an area governed by NFIB v. Sebelius (2012), which held that spending conditions cannot be so coercive that states lack a genuine choice; this bill expands optional coverage rather than imposing new mandatory conditions, so it does not raise the coercion concerns at issue in that case.
Checks and balances
Congress defines the statutory exclusion criteria while HHS gains authority to issue implementing guidance and interpret facility definitions, with courts available to review agency interpretations post-Loper Bright and Congress retaining oversight through the required annual report.
Historical precedent
Congress has previously carved out exceptions to the IMD exclusion, including the 2018 SUPPORT Act's optional Medicaid coverage for short-term substance use disorder treatment in IMDs.