Legislation to expand Medicare mental health coverage by creating a new benefit category sponsored by U.S. Rep. Bill Pascrell, Jr. (D-NJ-09) has been unanimously approved by the tax-writing House Ways and Means Committee. H.R. 8878, sponsored by Reps. Pascrell, Judy Chu (D-CA-27), and Adrian Smith (R-NE-03) now heads to the full House of Representatives for its consideration.

“Good health care coverage doesn’t just address physical health, but mental health as well,” said Rep. Pascrell. “Among Medicare beneficiaries, around one in every four – a full quarter – have a mental health issue. But because of a pervasive gap in Medicare coverage, Americans are often denied care. It is unfair and unsustainable that Medicare only offers coverage for the most and least restrictive settings for mental health and substance use disorder and not the middle where so many Americans fit. Our bill addresses this problem head on by finally creating a benefit category for intensive outpatient services. There’s a reason this legislation is bipartisan: it is a no-brainer that will help the health coverage and mental well-being of millions of Americans. I thank Representatives Chu and Adrian Smith for working together with me on this long overdue change and I look forward to the House moving fast to pass it.”

Intensive outpatient programs (IOP) 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.