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Decades-old rule pushes mentally ill Coloradans out of hospitals too soon. Legislators may finally change it.

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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.

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