DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
200 Independence Avenue, SW 
Washington, DC 20201 
Qualified Residential Treatment Program (QRTP) Reimbursement: 
Family First Prevention Services Act (FFPSA) Requirements  
Q & A 
October 19, 2021 
1.What is CMS notifying partners of today?
CMS is releasing this set of Questions and Answers to inform states that they can seek to 
modify the terms of an existing Medicaid section 1115 demonstration opportunity to allow title 
IV-E beneficiaries to receive coverage in a qualified residential treatment program (QRTP) that
is an institution for mental disease (IMD) for longer than that demonstration model currently
allows.
The Family First Prevention Services Act (FFPSA) of the Bipartisan Budget Act of 2018  
amends Title IV-E of the Social Security Act to limit foster care maintenance payments (FCMPs) 
(payments for room, board, and certain other costs for children in foster care) to 14 days for 
children placed in child care institutions (CCIs). One exception to this limitation is for children 
placed in facilities designated as QRTPs. As described below, a QRTP over 16 beds may meet 
the Medicaid definition of an IMD1. Federal Medicaid law prohibits states from receiving federal 
financial participation (FFP) (i.e., the federal governments share of a states Medicaid 
expenditures) for services delivered to individuals residing in an IMD, except in very limited 
circumstances, such as the inpatient psychiatric services for individuals under 21 benefit (the 
psych under 21 benefit). This is a requirement that precedes the FFPSA. 
As a result, states may be prohibited from claiming FFP for Medicaid services delivered to 
children while they reside in a QRTP that has more than 16 beds. CMS addressed this issue in 
Technical Assistance Questions and Answers2 dated September 20, 2019.  
The FFPSA amended Title IV-E to create limitations on title IV-E FCMPs for children placed in 
non-foster family home settings known as CCIs longer than 14 days, effective October 1, 2019. 
Agencies were allowed to request up to a two-year delay for implementation of the FFPSA 
limitations until October 1, 2021. A QRTP is a type of CCI placement where a child could 
possibly receive more than 14 days of title IV-E funded FCMPs.  
1 Section 1905(i) of the Social Security Act defines an IMD as a 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. 
2 https://www.medicaid.gov/federal-policy-guidance/downloads/faq092019.pdf   2. What can states do to receive federal Medicaid funds for QRTPs with more than 16 beds 
that meet the IMD definition?  
 
While placement of foster care children in foster and kinship families and smaller settings is an 
important goal, a serious mental illness/serious emotional disturbance (SMI/SED) Medicaid 
1115 demonstration initiative3 exists under authority in section 1115(a)(2) of the Social Security 
Act that allows CMS to authorize federal Medicaid funding for services provided to individuals 
in an IMD, where appropriate, when states also commit to ensuring a comprehensive, 
coordinated system of community-based care. To date, CMS has approved IMD expenditure 
authority under the SMI/SED demonstration initiative in six states (Idaho, Indiana, Oklahoma, 
Utah, Vermont, and Washington), and the District of Columbia. This demonstration opportunity 
could provide states the authority to receive FFP for Medicaid services provided to children in 
QRTPs with more than 16 beds. Typically, the demonstration initiative requires adherence to a 
statewide average length of stay of 30 days. It also limits FFP for coverage of Medicaid services 
to stays of no more than 60 days. For a limited time (not to exceed two years from the effective 
date of the new demonstration or demonstration amendment), states may propose a SMI/SED 
1115 demonstration that also includes an exemption from the foregoing limitations on length of 
stays for foster care children residing in QRTPs that are IMDs. Read more about the SMI/SED 
1115 demonstration in a September 2019 CMS Technical Assistance Questions and Answers. 
 
As a condition of approval for the exemption, states will be required to provide CMS with a plan, 
including key milestones and timeframes, for transitioning children out of QRTPs that are IMDs. 
This transition plan will take into account the up-to-two-year period during which children 
residing in QRTPs are exempt from the typical length of stay parameters; those parameters will 
apply to children residing in QRTPs at the expiration of this up-to-two-year period.  
 
3. How fast can an 1115 SMI/SED demonstration be made available to states? 
 
Six states and the District of Columbia already have approved 1115 SMI/SED demonstrations. 
These states would need to submit an amendment to take advantage of this opportunity, and 
CMS is available to provide technical assistance accordingly.  
 
For those states that do not currently have the demonstration, approval of new demonstrations 
will depend on the details of state applications submitted and whether they can meet the current 
requirements of the SMI/SED 1115 demonstration. CMS stands ready to provide technical 
assistance to states, as needed. States that do not currently have a section 1115 SMI/SED 
demonstration should review the guidance available in SMD # 18--011: Opportunities to Design 
Innovative Service Delivery Systems for Adults with a Serious Mental Illness or Children with a 
Serious Emotional Disturbance.  
 
4.Why is CMS unable to reimburse for services provided to beneficiaries in large QRTPs 
and IMDs for all states without an 1115 demonstration? 
 
When a facility is defined as an IMD, and does not meet one of the allowable facility types 
identified under the psych under 21 benefit for children, there generally is no authority to provide 
federal Medicaid funds for services provided to individuals residing in the IMD, per Medicaid 
statute. Nothing in the FFPSA amended Medicaid statute to exempt QRTPs with more than 16 
                                                 
3 https://www.medicaid.gov/federal-policy-guidance/downloads/smd18011.pdf  beds from this IMD exclusion. Therefore, except in very limited circumstances, CMS relies on 
demonstration authority under section 1115(a)(2) to provide Medicaid funding to individuals 
residing in IMDs, such as through the current SMI/SED 1115 initiative. CMS does not have the 
authority to utilize general enforcement discretion or compliance action to authorize 
reimbursement of services provided to children residing in QRTPs that the state has assessed as 
meeting the definition of an IMD.  
 
5. What is the difference between an IMD and QRTP facility?  
 
A QRTP is a CCI that provides a trauma-informed model of care designed to address the needs, 
including clinical needs, of children with serious emotional or behavioral disorders or 
disturbances. A QRTP that is a private CCI can accommodate any number of children, though 
some QRTPs (those that are a public CCI) are limited to 25 children. An IMD is a 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. An IMD facility has more than 16 beds. Therefore, given the 
interconnectedness of these two definitions, a QRTP facility with more than 16 beds will most 
likely qualify as an IMD. 
 
6. Who determines whether a QRTP facility with more than 16 beds qualifies as an IMD?  
 
States make an IMD assessment and determination on a facility-by-facility basis according to the 
statute, CMS regulation, and sub-regulatory guidance.  
 
7. If a child has placement in a QRTP that is an IMD after October 1, 2021, can that child 
be disenrolled from Medicaid? 
 
No. Placement in a QRTP that is an IMD does not impact Medicaid eligibility. CMS is 
committed to ensuring that vulnerable children are receiving high-quality care in smaller 
settings, but the Medicaid statute prohibits states from receiving FFP for services delivered to 
individuals residing in an IMD.