Outdated Federal Policy Restricts In-Patient Treatment at Rehabs | The Fix
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Outdated Federal Policy Restricts In-Patient Treatment at Rehabs

Because of a decades-old policy that limits the number of beds per facility, patients are being turned away from rehab centers despite qualifying for treatment under the ACA.


Millions will be denied help. Shutterstock.

By Paul Gaita


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The Affordable Care Act (ACA), also known as Obamacare, has promised to make sweeping changes in benefits for individuals dealing with addiction, with some 62.5 million individuals receiving increased substance abuse coverage and 32.1 million getting such benefits for the first time.

But a decades-old policy regarding the number of beds in drug and alcohol treatment facilities remains a huge roadblock for the 23 million Americans who need in-patient treatment. Under federal guidelines established in 1965, inpatient facilities with more than 16 beds are considered Institutions for Mental Disease, and as such are ineligible for matching payments from Medicaid to fund residential services.

The policy was enacted to prevent psychiatric hospitals from housing large numbers of patients in order to draw funds from state and local governments. While the restriction has prevented patient warehousing, it has also forced rehabilitation centers to turn away patients despite the fact that they are eligible for care under the ACA. In states like California, only 10 percent of available inpatient beds meet the federal government’s standards.

Representatives from state health care services departments and various treatment facilities have lobbied the government to provide some flexibility to the policy. But according to the Substance Abuse and Mental Health Services Administration, no plans to change the law are expected. Instead, the government is working on a variety of additional options, including treating patients with programs paid for with other federal money.

Response from the treatment facility industry has been negative. “Everyone is in agreement about how dumb this is,” said Arthur Schut, chief executive officer of Arapahoe House, a residential and outpatient drug and alcohol rehab center in Denver. “It doesn’t work economically, and it doesn’t work for the people seeking treatment."

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