The Legal Action Center describes the IMD Exclusion as: "The Medicaid Institutions for Mental Diseases (IMD) exclusion prohibits the use of federal Medicaid financing for care provided to most patients in mental health and substance use disorder residential treatment facilities larger than 16 beds. The exclusion is one of the very few examples of Medicaid law prohibiting the use of federal financial participation (FFP) for medically necessary care furnished by licensed medical professionals to enrollees based on the health care setting providing the services. The exclusion applies to all Medicaid beneficiaries under age 65 who are patients in an IMD, except for payments for inpatient psychiatric services provided to beneficiaries under age 21, and has long been a barrier to efforts to use Medicaid to provide nonhospital inpatient behavioral health services."  

The IMD exclusion is found in section 1905(a)(B) of the Social Security Act, which prohibits “payments with respect to care or services for any individual who has not attained 65 years of age and who is a patient in an institution for mental diseases” except for “inpatient psychiatric hospital services for individuals under age 21.” The law goes on to define “institutions for mental diseases” as any “hospital, nursing facility, or other institution of more than 16 beds, that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care, and related services.” The IMD exclusion was intended to ensure that states, rather than the federal government, would have principal responsibility for funding inpatient psychiatric services. The IMD exclusion has been part of the Medicaid program since Medicaid’s enactment in 1965, and while Congress has had the opportunity on numerous occasions to amend or repeal the exclusion, it has remained largely intact. In addition, the regulations governing the IMD exclusion have not been updated since 1988. 

Download information about the IMD Exclusion



Institutions for Mental Diseases (IMDs)

The federal government currently denies Medicaid reimbursement for persons otherwise Medicaid eligible who are over 21 and under 65 years of age if such persons reside in facilities designated as “Institutions for Mental Diseases” (IMDs). State hospitals, nursing homes, and residential facilities of 16 or more beds may be classified as IMDs if they provide specialized “mental illness” services, have over 50 percent of their patients diagnosed as “mentally ill,” or meet certain other criteria.

NAMI believes that the application of the IMD rule most dramatically affects persons suffering from schizophrenia and other brain disorders because these individuals tend to fall within the impacted age group and thereby are denied Federal Financial Participation (FFP) in their treatment solely on the basis of where they happen to reside, assuming they would meet all other Medicaid eligibility requirements.

The IMD rule is thus discriminatory and works against the provision of necessary health care for young and middle-aged adults with brain disorders.

NAMI calls upon the United States Congress to repeal the IMD rule and to adopt uniform standards of Medicaid eligibility based upon individual resources and the need for services, rather than upon the location in which services are provided or the residence of the recipient.

PENDING FEDERAL LEGISLATION - S.1169 — 115th Congress (2017-2018)

The United States Senate is attempting to modify the IMD exclusion.  At present, the bill seems to address only substance abuse and not mental illnesses.  This bill needs to include the treatment of patients with a range of mental health conditions - particularly those with Serious Mental Illnesses. 

Here's a link to the current bill.

7 Practical Strategies For Addressing America’s Mental Illness Crisis - John Hirschauer

An excellent overview of what needs to be done at the national level to improve conditions for the seriously mentally ill.  Published on 7/16/18 in the Federalist.



Grading the States: An Analysis of Involuntary Psychiatric Treatment Laws - September 2018

The Treatment Advocacy Center’s Report provides an objective comparison of commitment laws in the United States.  This report is helpful for people who want to understand Iowa’s recently updated inpatient and outpatient commitment laws. It’s useful to examine potential improvements to provide more effectively treatment for those with serious brain disorders like Schizophrenia, Bipolar Disorders, and Schizo-Affective Disorders. This report is extremely useful for that small number of patients who lack insight about their need for treatment due to Anosognosia - when their brain disorder causes them to not believe that medication is needed. 



Iowa MHDS Regions Map


Counties within the East Central Region have decided to return previously collected Mental Health Levy Funds to taxpayers.  The CEO (Mechelle Dhondt) and Governing Board (composed of County Supervisors from each of the nine counties in this region) have done this prior to having any discussion or debate about the cost of implementing the new Complex Needs Mental Health Care Law (HF2456 signed into law on 3/2/9/18 by Gov. Reynolds) that requires MHDS Regions to provide expansion of ACT Programs (Assertive Community Treatment), Access Centers, and Intensive Services Homes for people with complex needs (those with Serious Mental Illnesses).

Implementation of this law deserves significant discussion and planning in order to estimate the requisite cost of these new facilities and program.  The Governing Board seems oblivious to the fact that this new law directly impacts their mission - overseeing the delivery of mental health care services to those in their region.

Please contact the CEO and members of the MHDS of East Central Region Governing Board directly to ask that they stop reducing their available funds and start providing the services that this new law mandates.


MHDS of East Central Region



            Phone: 319-892-5671

            FAX: 319-892-5679

Governing Board Members

To download a list of the MHDS East Central Region Governing Board members with e-mail addresses - click on the download button below.


Cedar County has decided to end its property tax levy that contributes to the Eastern Iowa MHDS Region.

Please contact the Cedar County Board of  Supervisors and let them know that they are not supporting mental health care in their region.


Cedar County Board of Supervisors

General e-mail:

Board Members

  • Dawn Smith, Chairperson
  • Jon Bell, Pro Tem
  • Jeff Kaufmann
  • Brad Gaul
  • Steve Agne


East Central Region Board Members (pdf)


Mental Health Care for Iowa's Children


Children's Mental Health Care in Iowa

For Iowans under the age of 18, there is no system that oversees mental health care. Recently, the Iowa Department of Human Services has sponsored two Workgroups tasked with assessing the status of Children's Mental Health Care in Iowa.  The reports of these Workgroups can be downloaded below.  

IA DHS - The Children’s Mental Health Study Report (2016)

2016 Report of the Children’s Mental Health and Wellbeing Workgroup's report regarding children’s mental health crisis services.

Read the report

IA DHS - Children’s Mental Health and Well-Being Workgroup Final Report (2015)

2015 Report of the Children’s Mental Health and Wellbeing Workgroup

read the report

Assisted Outpatient Treatment (AOT)

What is Assisted Outpatient Treatment?

Assisted outpatient treatment (AOT) is the practice of delivering outpatient treatment under court order to adults with serious mental illnesses who meet specific criteria, such as a prior history of repeated hospitalizations or arrest. It is a tool for assisting those individuals most at risk for the negative consequences of not receiving treatment.  

Read AOT Overview

Cost Effectiveness of AOT Services

State and Community Considerations for Demonstrating the Cost Effectiveness of AOT Services  

Read The Report

AOT in New York State -The Case for Making Kendra’s Law Permanent

A 2017 Review of AOT in New York written by Stephen Eide, a senior fellow at the Manhattan Institute.

Read the Report

Kendra's Law - NYS Government Report on Implementing AOT

A 2005 Report by the NYS Office of Mental Health.


Assisted Outpatient Treatment - FAQs

Iowa AOT FAQs (pdf)


Assisted Outpatient Treatment (AOT)

Summary of AOT Services & Requirements in New York State

A nice overview of AOT in New York State by D.J. Jaffe and

Read NYS AOT Summary

2015 Review of Cost Effectiveness of AOT Programs

Health Management Associates' Review of AOT Programs

State and Community Considerations for Demonstrating

the Cost Effectiveness of AOT Services 


Read The report