Virginia Regulatory Town Hall
Department of Medical Assistance Services
Board of Medical Assistance Services

General Notice
Institutions for Mental Disease (IMDs) Reimbursement Changes
Date Posted: 5/17/2013
Expiration Date: 6/28/2013
Submitted to Registrar for publication: YES
No comment forum defined for this notice.



(pursuant to §1902(a)(13) of the Act (U.S.C. 1396a(a)(13))



The Virginia Department of Medical Assistance Services (DMAS) hereby affords the public notice of its intention to amend the Virginia State Plan for Medical Assistance to provide for changes to the rules governing reimbursement for services furnished to individuals under age 21 who reside in Institutions for Mental Disease (IMDs), which are inpatient psychiatric facilities such as private and state freestanding psychiatric hospitals and residential treatment facilities (Level C).  The U.S. Court of Appeals issued a final decision on May 8, 2012, regarding reimbursement for these services that compels this regulatory action by the Department.

In response to the court decision and in accordance with CMS guidance, DMAS is changing the relevant regulations to permit separate billing for ancillary services for individuals under age 21 residing in an IMD only when the IMD 1) arranges for and oversees the provision of all ancillary services, including ancillary services furnished through contracted or employed Medicaid providers; 2) maintains medical records of care furnished to the individual; and 3) ensures that all services are furnished under the direction of a physician.  Allowable ancillary services will vary by provider type.

DMAS will continue to enforce the requirement that IMD individuals’ plans of care be comprehensive, covering medical, psychological, social, behavioral and developmental needs (including emergency services).  In addition, DMAS will require IMDs to:  1) use contracted or employed Medicaid providers for ancillary services furnished to individuals under age 21 residing in the IMD; 2) make referrals to these contracted and employed Medicaid providers; and 3) obtain and maintain medical records from all ancillary service providers that are not covered by the per diem.

DMAS has established detailed guidance on exactly how and when the IMDs must update plans of care, establish contracts, make referrals, and obtain medical records.  If these requirements are not met, DMAS has established detailed criteria for audits and retractions of paid claims.

There will be no change to annual expenditures.

The Department is submitting an emergency regulation, pursuant to the Code of Virginia §2.2-4011, to the Governor for approval.  Pending the Governor’s approval, DMAS will provide copies of said emergency regulations to all requesters.  Please forward your written request to the Regulatory Coordinator, DMAS, 600 East Broad Street, Richmond, VA, 23219.  Further information is also available at

Contact Information
Name / Title: Brian McCormick  / Regulatory Supervisor
Address: 600 E. Broad St., Suite 1300
Richmond, 23219
Email Address:
Telephone: (804)371-8856    FAX: (804)786-1680    TDD: (800)343-0634