Using Medicaid to Support Working Age Adults with Serious Mental Illnesses in the Community: A Handbook. CHAPTER 4: MEDICAID COVERAGE OF MENTAL HEALTH SERVICES


States may offer a wide range of services to Medicaid beneficiaries. Commonly, states employ certain Medicaid coverages to support working age adults with serious mental illnesses in the community. Other Medicaid coverages can also play a vital role in assisting individuals. This chapter provides basic information concerning Medicaid service coverages that are especially relevant for supporting persons with serious mental illnesses in the community.

Medicaid’s role in supporting working age adults with serious mental illnesses hinges on the services that a state includes in its Medicaid program. Federal Medicaid law does not spell out a predefined set of distinct mental health services. Instead, mental health services may be furnished under several general coverage categories, some of which are mandatory and others optional. For example, psychiatrist services fall under the broad mandatory physician services category. Services such as Assertive Community Treatment may be furnished under the optional rehabilitative services coverage. Three optional Medicaid coverage categories -- clinic (outpatient) services, rehabilitative services, and targeted case management -- figure prominently in the provision of community mental health services. Other Medicaid coverages (e.g., prescribed drugs) also play vital roles in meeting the needs of individuals with serious mental illnesses.

This chapter begins with a brief discussion of Medicaid coverage policies. It then provides an overview of pertinent Medicaid coverages for supporting people with serious mental illnesses in the community. Next, it provides more detail concerning federal policies that apply to these coverages, including the types of services that may be furnished under them, as well as coverage requirements and limitations. Examples illustrate how individual states have employed these coverages. Chapter 5 further illustrates how states have fashioned their Medicaid coverages of community mental health services under the rehabilitative services and targeted case management options.

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