The move toward social support that centers families mark a momentous change for social services at a federal level. They are working towards this through the implementation of the Family First Prevention Services Act, which was passed into law in 2018. As part of this shift into preventative and supportive models of care, they created a new facility license type known as a Qualified Residential Treatment Program or QRTP. It is a rather essential element in the implementation of the Family First Prevention Services Act.

There are three essential tenets of the Family First Act:

• To ensure that children grow up in safe loving homes
• To expand services and supports to keep families safely together
• To improve access to trauma-informed residential treatment opportunities through the creation of QRTPs.

The latter is what we will focus on here. For an overview of the Family First Act as a whole, check out our previous blog: Family First Prevention Services Act: What is it, and Why does it Matter.

As per stipulations upheld by child welfare agencies and the courts, QRTPs are only used to meet specific short-term treatment needs and must undergo a review process and receive a rating regarding their applicability towards QRTP status.

QRTPs & the IMD Issue

On the surface, this new implementation of additional residential supports seems simple. Unfortunately, when addressing this at the federal level, an older – and widely viewed as outdated and exclusionary – rule comes into play.

Along with the passing of Medicaid in 1965, came the Medicaid Institutions for Mental Disease (IMD) Exclusion. CDHS is working in partnership with the Department of Health Care Policy and Financing (HCPF) to determine how Medicaid funds can be used for QRTPs, but it is frequently hampered by the continued use of IMD exclusion. This is frequently referred to as “the IMD issue.” Without access to federal funding, QRTPs cannot effectively support those who need the care that these institutions provide.

In the last few years states have been grappling with the question of whether QRTPs fall under the definition of an IMD. This is tricky because if a facility is designated as an IMD, children, and youth in their care can no longer access Medicaid funding to cover behavioral health costs, as well as physical, dental, and pharmaceutical costs. For Colorado, that equates to approximately $19.7 million in Medicaid funding annually.

A 2019 CMS report concluded that “QRTPs may qualify as IMDs if they are primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases including medical attention, nursing care, and related services, and have more than 16 beds.”

The IMD exclusion also creates significant barriers to treatment for adults with severe mental illness. Under this rule, Medicaid payments to states are excluded for non-geriatric adults receiving psychiatric care in a treatment facility with more than 16 beds. It means that the vision and implementation of QRTPs have faced significant challenges since Family First was signed into law to avoid falling under this exclusionary rule.

How did IMD exclusion happen?

In 1965 when it passed into law, there were two primary reasons this exclusion was pushed at the federal level: disincentivizing the treatment of the mentally ill in large institutions where they would languish and shifting costs for psychiatric treatment onto individual states.

At the time, it was believed that large inpatient facilities would become obsolete in due course because of advancements in antipsychotic medications, paired with a trend toward deinstitutionalization which has been steadily at work since the 50s. Unfortunately, this trend has also resulted in abysmal access to care over the last 70 years. In fact, the United States has closed almost 97% of its state hospital beds since the middle of the 1950s. Medicaid’s IMD exclusion rule has contributed in no small way to this issue.

What it means for Colorado’s Institutions.

To navigate around the Medicaid funding dilemma that IMDs create, HCPF has created a new set of rules surrounding QRTPs.

Any overnight facility greater than 1 mile from another overnight facility controlled by the same owner or governing body will be deemed an independent facility provided they meet the following criteria:

• The facility maintains its own license
• The facility has dedicated staff that ensures a stable milieu
• Residents do not move between facilities during their care

If multiple overnight facilities are closer than 1 mile and are controlled by the same owner or governing body, the following apply:

• All beds at a single address or on adjoining properties regardless of program or facility type will be considered one institution
• The total bed count must be 16 or less to be reimbursed by Medicaid
• Facilities in home-like structures (ie. cottage, house, apartment) not on a single campus or adjoining properties and located farther than 750 feet apart within a community setting that includes publicly used infrastructure (roads, parks, shared spaces, etc.) can be reimbursed by Medicaid as long as there are 16 or fewer beds at each facility.

Without these additional rules to clarify the QRTP/IMD situation, the prospect of effective implementation would have been greatly stymied. It is still a tricky subject, but Colorado has found a path through the obstacles this situation presents.

An IMD/QRTP Town Hall was hosted in June of 2021 to discuss the issue and bring some clarity to the subject. If you have the time and are still curious, check it out here.