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Maine Behavioral Healthcare
  Spring Harbor Hospital News

Medicaid Emergency Psychiatric Demonstration:
Moving toward Mental Health Parity and More Appropriate,
Cost-effective Care

Spring Harbor Hospital was selected to participate in a long-awaited pilot project funded by the Centers for Medicare and Medicaid Services (CMS).  The Medicaid Emergency Psychiatric Demonstration will test whether modifications to a 47-year-old Medicaid exclusion will produce better care and lower costs.  The project is designed to address the high use of emergency departments by Medicaid beneficiaries in psychiatric crisis through a three-pronged mission: decrease time spent in Emergency Rooms, reduce lengths of hospital stays, and increase access to community resources and support. 

This is a historic project,” said Dennis King, Spring Harbor’s CEO. “It symbolizes a significant step toward parity for adults with mental illness under Medicaid and the institutions where they may receive care. To date, these individuals have had limited choices and less-than-optimal care.”

Maine is one of only 11 states selected to participate in the project which will provide a combined total of up to $75 million in federal Medicaid matching funds over three years.


When Medicaid was enacted in 1965, the majority of people living with severe mental illness were housed in state and local psychiatric hospitals paid for with state and local dollars. To prevent shifting the costs of caring for mentally ill patients from state and local governments to the federal government, the drafters of Medicaid added the Institutions for Mental Disease (IMD) exclusion.

This IMD exclusion prohibited federal Medicaid matching payments for psychiatric hospitalization services for Medicaid beneficiaries between the ages of 21 and 64 receiving care at an IMD. (An IMD is defined as a 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.)

In 1986, Congress enacted the Emergency Medical Treatment and Labor Act (EMTALA) to ensure public access to emergency services regardless of ability to pay. Since that time, psychiatric hospitals like Spring Harbor have had to bear the financial burden of the “unfunded mandate” created by EMTALA, in that they have had to provide care for which there is no funding.

Advocacy Finally Pays Off

Maine representatives have played a crucial role in rectifying this situation and advocating for mental health parity.  During his tenure as president of the National Association of Psychiatric Health Care Systems (one of the organizations CMS partnered with to develop the project), Dennis King led an effort to gain mental health parity that included advocacy efforts in Washington, DC.

King worked with Senator Olympia Snowe’s office for many years to educate policy makers and others about the problem the unfunded mandate was creating for both adult Medicaid beneficiaries with mental illness and the country’s psychiatric hospitals. They advocated for a demonstration project to help determine an equitable and financially viable solution. Although Snowe introduced Medicaid Emergency Psychiatric Care Demonstration legislation, these efforts languished until it was incorporated into the Affordable Care Act (ACA) which passed in 2012. 

The project was launched at Spring Harbor Hospital in July 2013 in partnership with other community providers.  A Transition Case Manager from Community Counseling Center and a Transition Coach/Peer Support worker from Amistad are integrated into the Treatment Team of each eligible patient.

These reinforcements will help bridge connections in the community for our patients,” explained Joyce Cotton, Chief Clinical & Nursing Officer. “They are integral to our ability to provide the best care to patients as they step down from the inpatient setting and into different levels of care.”

Spring Harbor expects the project to have an impact on approximately 400 patients per year with an average length of stay of three days.


123 Andover Road, Westbrook, Maine 04092 | 1-866-857-6644, 207-761-2200