CBO: House Mental Health Bill Would Reduce Medicaid Spending

A mental health bill expecting a vote in the House this week would likely reduce net direct Medicaid spending by $5 million between 2017 and 2026, according to the Congressional Budget Office.

The legislation would not increase net direct spending or on-budget deficits for any of the four consecutive 10-year periods beginning in 2027, the CBO predicts. The bill would reduce federal Medicaid spending and would similarly result in lower state Medicaid spending between 2017 and 2026, the office projects.

“Implementing the legislation also would affect spending subject to appropriation mostly because it would reauthorize and make changes to several grant programs administered by the Substance Abuse and Mental Health Services Administration,” a CBO letter says. “However, CBO has not yet completed an estimate of the effects the bill would have on discretionary spending.”

The bill, from Rep. Tim Murphy (R-Pa.), was unanimously approved by the Energy and Commerce Committee last month, and is awaiting a floor vote in the House this week. The bill’s contents were skimmed down to bring on Democratic support, notably pulling back from dismantling the Substance Abuse and Mental Health Services Administration and changing some aspects of the Health Insurance Portability and Accountability Act.

The bill primarily authorizes new programs and grants. Murphy has said funding is expected to come during next year’s appropriations process.

The CBO report predicts that a section allowing federal reimbursement for some medical services that children and young adults receive as inpatient care in institutions of mental disease would increase federal spending by an average of $250 per child or young adult in an IMD annually. If implemented, that section would cost $285 million between 2017 and 2026.

Another section requires state Medicaid programs to implement an electronic visit verification system for providers that provide care in a patient’s home.

“Federal payments to a state for personal care services would be reduced if a state fails to implement an EVV for those services by January 1, 2019,” the letter from CBO Director Keith Hall says. “Similarly, federal payments for home health care services would be reduced if a state fails to implement an EVV for those services by January 1, 2023.”

Overall, CBO projects enacting the section would reduce direct spending by $290 million between 2017 and 2026.

Correction

A previous version of this story misstated Murphy’s name.

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