State Oversight of Adult Residential Treatment for Behavioral Health Conditions
Authors: O'Brien P. , White M. , Mulvaney‐Day N. 
Published: August 2020

Research Objective

Residential treatment for mental and substance use disorders (M/SUDs) historically is not compensated by Medicaid due to the Institutions for Mental Disease payment exclusion. As the opioid epidemic has evolved, however, residential treatment is a more common setting for care. This study sought to identify the regulations and other policies regarding oversight of residential M/SUD treatment at the state level.

Study Design

After conducting an environmental scan and interviewing experts, we developed a template to provide a coding structure for data collection. We gathered source data for all states and the District of Columbia by reviewing statutes and regulations governing behavioral health treatment or licensure. Detailed state summaries were prepared and shared with states for validation. State Medicaid regulations and waiver requirements related to residential treatment were also reviewed.

Population Studied

Residential treatment was defined as clinical treatment services provided in a 24‐hour living environment. This definition eliminated programs such as group homes or recovery housing, unless regulations or state personnel indicated that clinical treatment must be provided by such facilities. We excluded facilities exclusively associated with the criminal justice system or located in inpatient settings.

Principal Findings

Residential mental health treatment facilities are less likely to be regulated/licensed than are residential SUD treatment facilities. Most states require inspection at licensure, with somewhat fewer allowing for cause‐based inspections. Few state regulations include requirements for medical directors and more require the provision of “sufficient” staffing than incorporate ratios. Few incorporate explicit regulatory requirements for training staff in trauma‐informed care or suicide assessment/prevention. Specific requirements related to placement are most common in SUD residential treatment, reflecting the ASAM criteria. Few states mandate client follow‐up or aftercare to be provided by the residential facility postdischarge. Less than half of all state regulations regarding SUD residential treatment explicitly call for use of some type of evidence‐based treatment, with fewer for mental health treatment. Requirements related to medication‐assisted treatment are seldom expressly incorporated into residential treatment regulations. Thirty‐six and 48 states have promulgated some quality assurance regulations for residential mental health and SUD treatment, respectively.

Conclusions

Whereas many states have some measure of oversight and licensure of residential treatment, specific criteria related to evidence‐based practices and quality are not included in many states. A complementary review of state oversight should be undertaken regarding residential settings that do not provide clinical treatment, such as recovery homes.

Implications for Policy or Practice

Oversight and licensure of residential treatment are complicated by the often‐bifurcated structure of state agencies, requirements specific to public funding, and nonregulatory approaches to oversight that can include contracting requirements, Medicaid waivers, and policy documents. Although licensure or oversight standards that are incorporated into laws and regulations may be the clearest mechanism for oversight, in some cases, it may not allow the flexibility required to operate within the states. Other mechanisms, such as state policy documents or requiring facility policies and procedures to address specific matters as part of licensure, may also achieve the same outcome with greater flexibility

Primary Funding Source

ASPE.