Decades-old rule pushes mentally ill Coloradans out of hospitals too soon. Legislators may finally change it.
Barbara Vassis keeps a spreadsheet to track her daughter’s years-long journey through Colorado’s patchwork mental health system.
The sheet goes back 11 years, a third of Erin’s life. There are holes in the narrative: Her daughter is schizophrenic bipolar, Vassis said, and she’s moved around different parts of the country. Still, even incomplete, Vassis’ growing tracker provides a glimpse at the revolving doors that Erin and hundreds of other Coloradans are stuck in every year.
From April 2021 to April 2022, for instance, Erin spent 106 days bouncing between emergency rooms, detox facilities, hospital beds, homeless shelters and crisis centers. During that time, she never spent more than two weeks at a time in one hospital, Vassis said. Instead, she repeatedly was discharged within a fortnight, still unstable, thanks to a decades-old Medicaid rule that often forces the early discharge of low-income, mentally ill patients.
Vassis looks at the spreadsheet again. After one hospital stay in 2021, Erin was dropped at a bus stop. It was January, and other than a dog blanket that a passing stranger had given her, she was wearing only hospital scrubs.
“They just spit you out like you’re a throwaway human being,” Vassis said. “And that’s really tragic.”
Erin is one of 300 to 400 low-income Coloradans with severe mental illnesses who need longer hospital stays but don’t get them because Medicaid caps inpatient treatment at many psychiatric hospitals to 15 days per month, a requirement that advocates say is harming vulnerable patients and straining the broader public safety net. The patients, many of whom are homeless and are discharged before they’re fully stabilized, are left to tumble through jails and psychiatric evaluations, shelters and city streets, emergency rooms and nonprofit groups.
The details are maddening, providers and advocates said: If a patient stays at one facility for 10 days and another for six, neither hospital gets paid. Because the 15-day limit is based on a monthly clock, a patient’s length of stay is partially determined by when they are admitted. A patient admitted on Dec. 8 is likely to be out before Christmas, for instance. But a patient hospitalized on Dec. 18 can stay the rest of the month and then remain in the hospital when the countdown restarts on Jan. 1.
As the state broadly re-assesses its mental health system, a group of legislators, mental health advocates and parents are working to change the Medicaid mental health rule and provide 30 days of inpatient treatment to patients who need it. That requires a waiver from the federal government, plus $7.2 million in annual funding, according to projections provided to the Colorado Department of Health Care Policy and Financing earlier this year. Nineteen other states have secured or are awaiting a final answer on similar waiver applications, according to KFF, a health policy think-tank.
With state Medicaid officials on board, Gov. Jared Polis allocated $2.5 million in his recent budget proposal to ensure hospitals are paid for 15 days, even if a patient stays a bit longer. Now, legislators and advocates are calling on the legislature to find the remaining $5 million to extend the program to a full month.
“That just seems like money well-spent,” said Rep. Judy Amabile, a Boulder Democrat involved in the discussions. “That seems very inexpensive to me.”
The rule, advocates and lawmakers say, was well-intentioned: When Medicaid was established nearly 60 years ago, its architects didn’t want large mental hospitals to permanently warehouse vulnerable patients.
But as the decades have worn on, patients are increasingly bouncing between a series of institutions, like jails and emergency rooms, that were never intended to serve as regular pieces of the mental health puzzle. Psychiatric hospitals end up absorbing costs for longer patient stays, and some are cutting back on the number of beds they have available for the service because it isn’t economically viable, said Dr. Roderick O’Brien, the director of intensive treatment at Centennial Peaks Hospital in Louisville.
For patients who need more care, shorter stays exacerbate their illness. If they’re not fully stabilized, they may not understand the full breadth of their condition or the need to take medications, said Dr. Chelsea Wolf, the medical director for Denver Health’s inpatient psychiatric unit. Mental illnesses are “chronic, debilitating illnesses,” she said, and they will worsen over time if they’re not treated correctly and consistently.
Most patients don’t need lengthy inpatient treatment stays. But providers said it’s a vital option for those who do, especially if they’re unhoused or aren’t being treated elsewhere. O’Brien estimated that two-thirds of his patients with mental illnesses who decompensate — meaning their condition has worsened — need inpatient care for longer than two weeks.
“So the concern is that people’s health is not getting better,” said Vincent Atchity, the CEO and president of Mental Health Colorado. “They get discharged before they’re better and then, in short order, decompensate yet again and become vulnerable to other unfortunate outcomes, like prolonged periods of homelessness or harmful substance use or engagement in the criminal justice system.”
Those are the revolving doors that patients like Erin have been caught up in. The short stays then strain whichever institution next encounters the patient. Wolf, the Denver Health provider, said her hospital’s emergency room is “very, very, very frequently” filled with patients “who need ongoing psychiatric care and aren’t getting it.”
Others end up in jail. In one 12-month period several years ago, Vassis said, Erin was hospitalized nine times. In six of those cases, she was arrested within three days of being discharged. Erin was arrested again last year for breaking into her mother’s house. She is now waiting for a judge to determine if she’s competent to stand trial.
The state has a broader problem with delays within its competency system, through which people awaiting trial are psychiatrically evaluated. But that crisis overlaps with the Medicaid rule: Patients who were discharged early have ended up arrested and waiting in essentially the same hospital bed they’d been released from before, Amabile said. The difference is they were now caught up in the criminal justice system.
There are positive signs that legislators will set aside the needed money to give patients longer stays. Rep. Shannon Bird, a Westminster Democrat and the chair of the powerful Joint Budget Committee, said there was “great interest” in the idea. At a legislative meeting Thursday, she questioned the basic morality of discharging patients who need more care.
“Keeping people in the hospital for the time they need to get the care they need, instead of sending them out before they’re ready to go, only to recycle them and bring them right back when they relapse or something else happened… it seems like a good thing for us to do,” she said in an interview.
State Medicaid officials are on board with a change, too. They had discussed the problem before but didn’t pursue it because of the relatively small number of patients impacted by the rule — several hundred per year, though Amabile suspects it’s much higher.
But mounting frustration from advocates and hospitals, including from facilities with overwhelmed emergency rooms, prompted state regulators to throw their support behind expanding the rule. The health care policy and financing department can apply for a waiver from the federal Centers for Medicare and Medicaid Services this spring, depending on how much money is available. The approval process will take months.
“The reason we’re changing this policy is that we are concerned that the payment policy is driving clinical decisions,” Cristen Bates, the deputy Medicaid director here, said.
For Vassis, 30 days would be a good start. She doesn’t think it’s enough for people like her daughter, but it’s better than the status quo. Erin is creative, a painter. She’s curious about the world around her. When her illness is under control, she’s held jobs, lived on her own, gone to school. She just needs help staying stable.
“She’s someone who’s so at risk for recidivism and homelessness, it’s not even funny,” Vassis said. “If they can’t get her in the real world, she doesn’t have a chance.”
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