An Analysis of Institutions for Mental Disease Waivers: Evaluating the Impact on Access to Residential Treatment for Opioid Use Disorder

Abstract

Since the inception of Medicaid, federal law has prevented states from utilizing federal Medicaid funding to pay for residential substance use disorder (SUD) services provided by institutions for mental disease (IMDs). IMDs are defined as residential treatment facilities with seventeen or more beds that specialize in providing care for psychiatric and SUD services. In 2015, the Centers for Medicare and Medicaid Services (CMS) adopted a policy permitting states to waive the IMD exclusion, allowing them to use Medicaid funding to pay for SUD services in IMDs. This thesis uses the Substance Abuse and Mental Health Agency’s (SAMHSA) Treatment Episode Data Set - Discharges (TEDS-D) from years 2013 to 2019 to evaluate the effect of IMD waivers on opioid use disorder (OUD) residential treatment outcomes for patients with Medicaid as their primary insurer, relative to non-waiver adopting states. This thesis finds that adoption of the IMD waiver is associated with an increase in residential treatment utilization, a higher probability of MAT delivery in residential settings, and a higher probability of completing residential treatment.