In recent weeks, the future of the subway system has come to seem less of a fiscal question than a public safety one. The MTA got its bailout. But disorder underground, which polls show weigh heavily on commuters’ minds, remains as unaddressed as ever, and just as bound up as ever with the city’s dysfunctional mental health system.
There was the series of stabbings, some fatal, in February. In March, Manhattan DA Cy Vance reported that annual subway pushings were on track to more than double over the already-elevated number witnessed last year, despite still-low ridership levels. Subway felony assaults are also up over last year’s mark; this Wednesday, riders were treated to mental illness-related service disruptions on the D, N and J lines.There may be a way the Biden administration can help.
Specifically, New York policymakers should demand a repeal of Medicaid’s “IMD Exclusion,” which generally prohibits specialized psychiatric hospitals from billing Medicaid. This would increase access to the kind of inpatient treatment that some of the recent subway pushers, and numerous other seriously mentally ill New Yorkers, need and aren’t now getting.
An IMD is an Institution for Mental Disease, meaning a psychiatric hospital. Ever since the program’s origin in the mid-1960s, specialized psychiatric hospitals have been mostly unable to seek Medicaid reimbursement. Congress at that time wanted to help states fund health care, but wasn’t interested in paying for the kind of long-term mental health care then being provided to more than 200,000 psychiatric hospital patients across the nation. Medicaid would generally pay for only outpatient mental health services, not traditional institution-based care.
States followed the money and built out the community-oriented system of public mental healthcare we have today. The institutionalized population is down 95% from what it was prior to “deinstitutionalization.”
Deinstitutionalization benefited many but not everyone, as the crisis on the subways makes clear. We long ago overlearned the lessons taught by the asylum era’s deprivations and abuses. And yet, states have continued to run up the score on deinstitutionalization, cutting psychiatric beds in every decade since the 1950s. A more sensible policy would be to reconsider the benefits of humane psychiatric hospitalization in a 21st-century context.
A small number of those with serious mental illness, such as some with schizophrenia or bipolar disorder, will never be well-served by community mental health services. But while inpatient care would be clinically appropriate for such individuals, it’s not fiscally appropriate from the perspective of state governments. Repealing the IMD Exclusion would align the public mental health care system’s clinical and fiscal incentives.
Disability rights groups oppose repealing the IMD Exclusion over fears of mass re-institutionalization. That’s an unrealistic scenario for a few reasons.
First, legal regulations on civil commitment are far stronger now than they were prior to deinstitutionalization. Second, community mental health services are not going away anytime soon. Far from crowding out support for community services, allowing IMDs to reimburse Medicaid would allow community-based programs to focus on the cases they’re better equipped to deal with.
Third, to control Medicaid costs, states across the nation typically contract with private insurance companies under managed-care arrangements. Private insurance companies are not going to countenance unnecessary long-term hospitalizations. Under IMD repeal, they would play a role functionally similar to disability rights advocates, if out of economic motivations.
This wouldn’t be free and indeed, would increase the cost of Medicaid, one of the most dangerous threats to government budgets. But it’s affordable. The Congressional Budget Office, in 2015, estimated a $40-60 billion 10-year price tag, though the agency admitted the exact bill to be “highly uncertain.” More recently, the Trump administration estimated that a state-option version of IMD repeal would cost about $5 billion over 10 years.
There would undoubtedly be cost savings for city agencies such as the jails and homeless services. At some level, though, anyone interested in a more effective mental health-care system simply must own the costs of repealing the IMD Exclusion and accept them as the wages of reform.
Authorizing Medicaid funding for treatment in specialized psychiatric hospitals would help build a true continuum of care, better-suited to help the seriously mentally ill, those whose inability to thrive in a community setting puts them at extreme risk of incarceration and homelessness. At a minimum, it would forestall further reckless reductions in New York’s dwindling supply of psychiatric hospital beds. In the state budget passed last month, lawmakers agreed to slash 200 beds across the state.
Many Democrats have endorsed repealing the IMD Exclusion. So have many Republicans. The IMD Exclusion wasn’t a good idea 50 years ago, and it’s certainly not a good idea now. It’s past time to put it out of its misery for good.
This piece originally appeared at New York Daily News ______________________ Stephen Eide is a senior fellow at the Manhattan Institute and contributing editor of City Journal. Carolyn Gorman is a policy analyst and former board member of Mental Illness Policy Org. This piece originally appeared in New York Daily News