SECTION 1. REMOVAL OF MEDICAID IMD EXCLUSION FOR 
SUBSTANCE USE DISORDER TREATMENT FA-
CILITY SERVICES FOR NONELDERLY ADULTS. 
(a) FINDINGS.—Congress finds the following: 
(1) Substance abuse exacts a social and eco-
nomic toll on the United States, with widespread 
detrimental effects on the Nation’s health, safety, 
and economy. 
(2) The costs of substance abuse to the Na-
tion’s health care system are estimated at $524 bil-
lion a year with an additional $181 billion each year 
in public health, crime, and lost productivity costs, 
resulting in illicit drug use costing our country a 
total of $705 billion annually. 
(3) The human costs of drug addiction cannot 
be calculated. Every day in the United States, 120 
people die as a result of drug overdose, a rate that 
has more than doubled from 1999 through 2013. 
Among individuals 25 to 64 years old, drug overdose 
caused more deaths than motor vehicle traffic crash-
es. 
(4) For millions of Americans substance use 
progresses to the point where efforts by individuals, 
their family and friends, and social networks are not 
sufficient to cope with the problem. In cases of 
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chronic addiction, access to treatment can be a crit-
ical and lifesaving resource. 
(5) Only a fraction of those Americans who 
need treatment, however, receive it. An estimated 
23.1 million Americans ages 12 or older needed 
treatment for substance abuse in 2012; however, 
only 2.5 million of them actually received treatment. 
This shortfall is due primarily to the limited avail-
ability of substance use disorder services, particu-
larly for those in need of residential care to address 
chronic addiction. 
(6) The expansion of insurance coverage for 
substance use disorder treatment through the Af-
fordable Care Act has served as a powerful tool to 
enable individuals to access care to address their 
substance use disorder, especially for those who ben-
efit from outpatient services. 
(7) However, under current law, access to com-
munity-based residential treatment for those with 
the most severe conditions is denied to Medicaid 
beneficiaries due to an exclusion of coverage of serv-
ices in institutions of mental disease (IMD) that 
bars reimbursement for care of patients at facilities 
with more than 16 beds, resulting in inequitable and 
inaccessible care for millions of Americans. 
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(8) Eliminating this IMD exclusion will allow 
those who suffer from severe substance use disorders 
to have equal access to treatment, to achieve stable, 
long-term recovery, and to become productive mem-
bers of society, and will reduce the health, public 
safety, and economic consequences associated with 
addiction. 
(b) PERMITTING MEDICAL ASSISTANCE AT FACILI-
TIES PROVIDING INPATIENT, NONHOSPITAL RESIDEN-
TIAL SUBSTANCE USE DISORDER TREATMENT FOR NON-
ELDERLY ADULTS.—Section 1905(a) of the Social Secu-
rity Act (42 U.S.C. 1396d(a)) is amended, in division (B) 
that follows paragraph (29), by inserting after ‘‘institution 
for mental diseases’’ the following: ‘‘, except that such lim-
itation with respect to an institution for mental diseases 
shall not apply to a facility insofar as it provides inpatient, 
nonhospital residential substance use disorder treatment 
for individuals over 21 years of age’’. 
(c) EFFECTIVE DATE.—The amendment made by 
subsection (b) shall apply to items and services furnished 
on or after January 1, 2017. 
Æ 
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