By: Jennifer Lav
Executive Summary
A landmark foster care reform law, the Family First Prevention Services Act, was intended to ensure that children are able to live in family-like settings and reduce reliance on unnecessary institutional care. In doing so, the new law put a spotlight on a longstanding Medicaid law and policy that prohibits states from obtaining federal funds for services provided to residents of mental health facilities with more than 16 beds. This exclusion has existed since Medicaid was enacted in 1965, and plays an oft misunderstood and underappreciated role in incentivizing states to provide services in smaller, more community-based settings.
This issue brief discusses the intersection of the IMD exclusion with foster care placements and advocates for a path forward where federal funding continues to be used to further the goal of keeping children with families.
