National Alliance on Mental Illness
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  • NAMI strongly supports legislation to create a new state option for intensive community-based services for individuals with severe mental illnesses (HR 2364). This legislation, introduced by Representatives Marcy Kaptur (D-OH) and James Greenwood (R-PA) would specifically allow states to use their Medicaid programs to replicate evidence-based programs such as Programs of Assertive Community Treatment (PACT). NAMI urges all members of Congress to cosponsor and support HR 2364.
  • NAMI supports passage of the Family Opportunity Act (S 321/HR 600) – legislation to allow states establish Medicaid "buy-in" programs for families of children with severe disabilities who are often forced to economic ruin or relinquishing custody of their child in order to access needed services.
  • NAMI supports repeal of the Institutions for Mental Disease (IMD) Exclusion as a discriminatory restriction on Medicaid eligibility based upon the location in which services are provided or the residence of the recipient, instead of the an individual’s resources or need for services.


Federal funding of community-based mental health services is greatly diffused, spread across numerous mandatory and discretionary programs. Within Medicaid, community-based mental health services run through more than six separate optional service categories. Moreover, the complicated federal scheme relies on numerous state and local funding streams. The inevitable result is a complex, confusing patchwork of programs, with fragmented services at the community level – a system that is especially difficult for Medicaid recipients with mental illness.

PACT is the Answer

NAMI believes that the answer to this confusing and often ineffective system of public mental health services is increased investment in evidence-based best practice service models that target individuals with the most severe and disabling illnesses. The Program of Assertive Community Treatment (PACT) is one of the most successful mental health service delivery models today. PACT is evidence-based and outreach-oriented. It utilizes a 24-hours-a day, 7-day-a-week, interdisciplinary, mobile team approach to treatment. It delivers comprehensive treatment, rehabilitation and support services in community settings.

High quality PACT services typically are implemented at costs significantly less than those of putting individuals with severe mental illnesses in a hospital, residential treatment facility, or jail. PACT also is especially effective in serving individuals for whom previous, traditional treatment has been unsuccessful, including those with co-occurring substance abuse disorders and high use of inpatient care. Among the services typically integrated into PACT are 24-hour comprehensive care, psychiatric rehabilitation, integrated mental illness and substance abuse treatment, housing or housing supports, crisis intervention and peer counseling.

In fact, many PACT services already are available to states as optional Medicaid services. The new option need not incur federal obligations. The Medicaid Intensive Community Health Treatment Act (HR 2364) would permit states to finance consolidated, community-based services. It also represents a cost-effective state-level response to problems associated with deinstitutionalization, homelessness, and the costly trend toward criminalization of mental illness. In addition, NAMI supports companion legislation the Mental Illness Consumer Run Services Support Act (HR 2363) to foster development of peer-run service programs that promote recovery from mental illness.

IMD Exclusion Perpetuates Discrimination

Current federal Medicaid policy bars from coverage all services provided to adults’ ages 22 to 64 in IMDs that includes psychiatric hospitals and many community-based residential facilities. This policy isolates individuals with mental illnesses from all other Medicaid-eligible populations, contradicts the principles of equal treatment and insurance parity for treatment of mental illnesses, and undermines the ability of states to develop comprehensive systems of care. The result is that individuals with mental illnesses who receive services in IMDs are singled out for inferior Medicaid coverage. In general, individuals requiring services in IMDs have the most severe and persistent mental illnesses and often face significant stigma associated with their illnesses.

The IMD exclusion perpetuates the myths that mental illnesses are different than physical illnesses and that recovery for individuals with serious mental illnesses is not possible. Further, by failing to reimburse for appropriate and medically necessary services provided to Medicaid-eligible individuals in IMDs, this policy unfairly limits its support for mental health treatment. Fewer federal dollars means fewer resources throughout the mental health system, with resulting negative consequences not only for inpatient services but for community-based treatment and other services provided as part of a comprehensive continuum of care. In addition, the IMD exclusion creates an enormous barrier to the use of Home and Community Based waivers under Medicaid to serve individuals with mental illnesses and limits the ability of states to develop creative, stable financing mechanisms for the delivery of care. NAMI urges Congress to repeal the IMD exclusion and to support universal, non-discriminatory coverage under Medicaid for appropriate, effective treatment and services for individuals with mental illnesses.

The FOA Offers Hope to Families of Children with Severe Mental Illnesses

The Family Opportunity Act (S 321/HR 600) is intended to end the financial devastation that families too often encounter in attempting to access quality treatment for their children with severe mental illnesses. As many NAMI members know firsthand, families are often tragically forced to give up custody of their children to obtain the most appropriate treatment services for them. This legislation offers stability and recovery to children with severe and chronic disabling disorders, including early-onset mental illnesses and is a measure that will help put an end to this horrible choice that loving and caring families must make in cases where there has been no abuse or neglect.

S 321/HR 600 restores hope for children with severe mental illnesses and their families. Under the bill, states would be able to offer Medicaid coverage to children with severe disabilities living in middle income families through a buy-in program. Cost-sharing on a sliding scale up to the full premium cost will be required within certain guidelines that protect lower income families. Currently, families must stay impoverished, place their child in an out of home placement or simply give up custody in order to secure the health care services their child needs under Medicaid. NAMI strongly support S 321/HR 600 and urges Congress to pass this important legislation in 2002.