Press release

CMS Announces Approval of Groundbreaking Demonstration to Expand Access to Behavioral Health Treatment

District of Columbia first to access federal matching funds for critical tools to address both opioid crisis and serious mental illness

CMS Announces Approval of Groundbreaking Demonstration to Expand Access to Behavioral Health Treatment
District of Columbia first to access federal matching funds for critical tools to address both opioid crisis and serious mental illness

Today the Centers for Medicare & Medicaid Services (CMS) announced the approval of a first-of-its-kind Medicaid demonstration project that broadens treatment services available to Medicaid beneficiaries living in the District of Columbia (“the District”) diagnosed with serious mental illness (SMI) and/or serious emotional disturbance (SED).  At the same time, CMS is approving the District’s request to begin providing new services for its beneficiaries diagnosed with substance use disorder (SUD). 

“For too long, our system has failed to provide Americans with serious mental illness and their families the treatment and assistance that they need,” said HHS Secretary Alex Azar. “Americans with serious mental illness too often end up homeless or in our prisons, when access to treatment could help them lead healthy lives. President Trump has made it a priority for HHS to expand access to evidence-based treatment for serious mental illness and substance use disorders, and this waiver is a significant step in that broader agenda.”

The District is the first in the nation to receive federal approval of the new SMI/SED opportunity since the Trump Administration issued a letter describing the opportunity to state Medicaid Directors in late 2018. The SMI/SED section 1115 demonstrations will allow state Medicaid programs to overcome a longstanding payment exclusion which will, in turn, allow them to treat individuals with SMI who are short-term residents in settings that qualify as institutions for mental disease (IMD). The District is also taking advantage of CMS’s demonstration opportunity that offers similar flexibilities for Medicaid beneficiaries diagnosed with opioid use disorder (OUD) or other SUDs.

“Today’s historic approval will substantially increase the range of services that are available to meet the needs of the District’s Medicaid beneficiaries who are diagnosed with serious mental illness and substance use disorder,” said CMS Administrator Seema Verma. “This integrated approach supports the District’s goals of reducing opioid misuse and overdose deaths – while expanding the continuum of mental health and substance use treatment options for individuals in need.”

The District has been especially hard-hit by the nation’s opioidcrisis and has witnessed opioid-related fatal overdoses increase by 236 percent from 2014-2017.[1] In addition, about one-third of the District’s adult residents that are treated for OUD/SUD have a co-occurring SMI—which means that this combined SMI/SED and SUD demonstration has the potential to save thousands of American lives. 

This demonstration will also support the District’s goals to meet the needs of people experiencing homelessness.  Studies consistently reveal that large proportions of chronically homeless people have SMI, SUD or both, and today’s approval of the District’s combined SMI and SUD demonstration is expected to improve access to acute care, residential treatment, crisis stabilization and other mental health and SUD services. 

Long-standing federal law has prohibited states from receiving federal matching funds for providing services to Medicaid beneficiaries while residing in IMDs. DC, along with over half the states in the country, has taken advantage of an opportunity created by the Trump Administration in 2017 to not be bound by this IMD payment exclusion for Medicaid recipients diagnosed with OUD and other SUDs.  In November 2018, CMS also announced a new demonstration-type for states that provided additional opportunities to better serve individuals diagnosed with SMI and/or SED—which will allow states to broaden access to treatment for individuals across the entire behavioral health spectrum. States participating in CMS’s SMI/SED demonstrations must also commit to taking a number of steps to improve their community-based mental health care. 

In addition to being the nation’s first approved SMI/SED demonstration, the District’s award also marks the 27th approved SUD demonstration. With this approval, CMS anticipates that, over time, there will be measurable, verifiable and actionable outcomes for the District’s Medicaid recipients—including reductions in opioid-related overdoses, improvements in accessing and maintaining treatment, and reductions in preventable emergency room and inpatient care.

For more information regarding the District’s demonstration please visit


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[1]  Live.Long.DC.: Washington, DC’s Strategic Plan to Reduce Opioid Use, Misuse and Related Deaths, Department of Behavioral Health, March 2019.