In November 2015, Congress approved and sent to the President legislation to extend and expand the “Medicaid Emergency Psychiatric Care Demonstration,” which is a top NABH priority. On December 11, 2015, President Obama signed into law S.599, which became  P.L.114-97 extending the Medicaid Emergency Psychiatric Demonstration Project

The original three-year demonstration began in July 2012, when 11 states and the District of Columbia began implementing the NABH-backed Medicaid Emergency Psychiatric Demonstration. The demonstration allowed states selected in March 2012 to cover patients in freestanding psychiatric hospitals and to receive federal Medicaid matching payments for patients ages 21 through 64. The goal of the demonstration is to expand the number of emergency inpatient psychiatric care beds available in communities.

The Medicaid Emergency Psychiatric Demonstration has had widespread support (from groups ranging from NAMI to the Emergency Nurses Association) as a way to address a pressing need. The Medicaid program is a vital source of support for people with mental disorders, funding more than 50% of state and local spending on mental health services.  Non-governmental community-based psychiatric hospitals could help relieve this access problem; however, due to a Medicaid statutory provision called the Institution for Mental Disease (IMD) exclusion, patients receiving care in these hospitals are not covered for their care if the patients are between the ages of 21-64 and the hospitals cannot get Medicaid federal matching payments for these services.

This demonstration presents a solution. In a June 1, 2009, Government Accountability Office (GAO) report (GAO-09-347) on hospital emergency departments, it was reported that difficulties in transferring, admitting, or discharging psychiatric patients from the emergency department were a factor contributing to emergency department overcrowding.

The demonstration is creating positive change, and it can save money.