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Pascrell, Chu, Smith Introduce Legislation to Expand Medicare Outpatient Mental Services

Gap in coverage denies help to millions with mental illness

U.S. Reps. Bill Pascrell, Jr. (D-NJ-09), Judy Chu (D-CA-27), and Adrian Smith (R-NE-03), members of the tax-writing House Ways and Means Committee, have introduced H.R. 8878, legislation to expand Medicare mental health coverage by creating a new benefit category for intensive outpatient programs (IOPs).

“Providing complete health care demands not just coverage for physical health, but mental health too,” said Rep. Pascrell. “Among Medicare beneficiaries, around one in every four – a full quarter – have a mental health issue. Yet, these Americans often fall through a gap in care because Medicare only offers coverage for the most and least restrictive settings for mental health and substance use disorder. This watershed legislation will fix that gap by finally creating a benefit category for intensive outpatient services. This change will help the health coverage and mental well-being of millions of Americans. It is long overdue.”

“As a psychologist, I am committed to improving the mental health care available to Americans, including those in the Medicare program. For too long, Medicare has covered only the extreme ends of the care spectrum when it comes to mental health and substance use disorders,” said Rep. Chu. “But we know that mental health care, like all health care, requires varying levels of care depending on the severity of the disease and what is best for the patient. Our bill will close that gap, and offer intensive outpatient services to Medicare beneficiaries who do not require round the clock care, but who need more robust treatment than a periodic office visit. I am proud to introduce this bipartisan legislation with my Ways and Means colleagues Representatives Pascrell and Smith, and I look forward to working with them to improve care for Medicare beneficiaries across the country.

“As mental health care has trended away from psychiatric hospitals toward community-based outpatient care, many rural areas have lost access to care options in both settings,” said Rep. Smith. “While advancements in medical knowledge and technology have allowed more mental health care services to be delivered in outpatient settings, including some intensive care, Medicare coverage has not always kept pace. This bipartisan bill brings new flexibilities in coverage to match how care is being delivered and represents a step forward in Medicare modernization, completing the spectrum of mental health care options to allow resources to be more effectively utilized. Most importantly, this bill will help provide seniors increased access to the care they need. I thank my colleagues on both sides of the aisle for working with me on this important legislation.”

Intensive outpatient programs refer to outpatient services designed to treat individuals with mental health and substance use disorders that do not require inpatient or residential services, such as medical detoxification or 24-hour supervision. Such individuals require more intensive treatment than available in a typical outpatient setting.

While the specific services can vary depending on the exact setting, diagnosis, and the severity of conditions, IOP services generally include a specified number of hours of structured treatment each week consisting of individual or group therapy, medication management, and psychoeducation.

Currently, the Medicare program does not cover IOP as a benefit category. Although similar services are covered under the existing partial hospitalization program (PHP) if delivered by hospitals and community mental health centers, Medicare requires that a physician determine an individual need at least 20 hours per week of outpatient mental health services and be inpatient-eligible to receive PHP coverage. As a result, many beneficiaries who need intensive outpatient services but whose conditions are not severe enough to require 20 hours per week of care or otherwise would not be inpatient eligible cannot access the care they need and fall through the cracks.

This legislation will expand Part B to include IOP as a covered benefit, allowing outpatient hospitals, community mental health centers, rural health centers, federally qualified health centers, and opioid treatment programs to deliver intensive outpatient services to eligible beneficiaries through a per diem payment. Whereas the PHP benefit requires an individual to need a minimum of 20 hours per week of care, this policy requires an individual to only need nine hours per week of care to be eligible for the IOP benefit; it also does not require the individual to be eligible for inpatient care.

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