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Key Themes in Medicaid Section 1115 Behavioral Health Waivers

State interest in Medicaid Section 1115 behavioral health waivers, including mental health and substance use disorders, remains high.  As of November, 2017, there are 15 approved and 11 pending behavioral health waivers in 22 states.  This issue brief describes recent waiver activity in four areas:  using Medicaid funds to pay for substance use and/or mental health services in “institutions for mental disease” (IMDs), expanding community-based behavioral health benefits, expanding Medicaid eligibility to cover additional people with behavioral health needs, and financing delivery system reforms (Executive Summary Table).

Executive Summary Table:  Key Themes in Section 1115 Behavioral Health Waivers as of Nov. 2017
Waiver Provision # of States with Approved Waiver # of States with Pending Waiver
IMD Payment Exclusion 7 approved for substance use treatment,

1 approved for mental health services

7 pending for substance use treatment,

2 pending for mental health services

Community-Based Benefit Expansions 9 approved 5 pending
Eligibility Expansions 6 approved 2 pending
Delivery System Reforms 5 approved 3 pending

States’ Section 1115 waiver requests reflect Medicaid’s important role in financing behavioral health coverage.  Pending waiver requests raise several key issues to watch, including:

  • How IMD payment waivers for substance use services will evolve, including how CMS and states will balance expanding institutional services while also ensuring access to community-based services and what utilization controls, performance measures, and/or delivery system reforms are put in place to prevent unnecessary institutionalizations, and how CMS will respond to pending IMD mental health payment waivers and their potential impact on community integration issues;
  • What impact community-based benefit expansions, such as supportive housing, supported employment, and peer recovery coaching, will have on health outcomes, access to care and costs and how to identify best practices in supporting people with behavioral health needs in the community;
  • What impact waivers that expand Medicaid eligibility to cover additional populations with behavioral health needs and any associated enrollment caps will have on outcomes, access to care, and costs; and
  • How CMS and states will continue to use waivers to prioritize, finance, and implement delivery system reforms, such as physical and behavioral health integration, alternative payment models, and workforce development initiatives.
Issue Brief

The Henry J. Kaiser Family Foundation Headquarters: 2400 Sand Hill Road, Menlo Park, CA 94025 | Phone 650-854-9400
Washington Offices and Barbara Jordan Conference Center: 1330 G Street, NW, Washington, DC 20005 | Phone 202-347-5270

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.