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National Alliance on Mental Illness
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Harmful Medicaid Regulations Rescinded!

May 5, 2009

In a victory for NAMI members, on May 5 the Obama Administration issued an order rescinding a number of Medicaid regulations, including separate rules for outpatient hospital services and school-based services, as well as critical portions of an interim final rule for Medicaid Optional State Plan Case Management Services (also known as the Targeted Case Management rule). The portions of the Targeted Case Management rule to be rescinded include all of the most harmful and restrictive aspects of the regulation related to services for beneficiaries with serious mental illness, including: 

  • the restrictive definition of individuals transitioning to a community setting,
  • the prohibition against "bundling" of rates, and
  • the "intrinsic element" test (denying reimbursement for case management services that are part of another program).

Click here to view the formal announcement of the rescinding of these Medicaid regulations.

Other harmful Medicaid regulations, including the rehabilitative services rule, were in the "proposed" rather than the "final" phase, and therefore do not need to be rescinded.  The Obama Administration has given every indication that it does not plan to implement them.

NAMI is extremely pleased the Administration has rescinded these harmful Medicaid regulations.  This move marks the end of a two year effort to stop these regulations, including a legislative moratorium that was originally imposed in June 2008 and was renewed earlier this year at part of the President’s economic recovery and stimulus package.   Click here for more information about the moratorium that was previously in place. 

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