Initiative 5: mental health IMD

In November 2020, Centers for Medicare & Medicaid Services (CMS) approved an amendment to our state’s Section 1115 Medicaid demonstration waiver, called the Medicaid Transformation Project (MTP).

This amendment allows Washington State to purchase (an average of 30 days) acute inpatient services for Medicaid clients between the ages of 21 and 65 who reside in a dedicated large psychiatric facility that qualifies as an “institution for mental diseases” (IMD).

IMDs are hospitals, nursing facilities, or other institutions of more than 16 beds that are primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, which includes substance use disorder (SUD).

Prior to this initiative, access to inpatient care was challenging. Access to the full array of mental health treatment options is vital to recovery for individuals experiencing mental illness. A continuum of treatment is important to ensure safe, healthy communities and quality outcomes.


  • Washington State can expand bed capacity, meaning more people can receive inpatient psychiatric care.
  • Reduced administrative burdens for providers, plans, and Washington State.
  • Providers who provide quality service can reduce costs through larger facilities.
  • Facilities that provide care under this initiative can receive Medicaid funds.
  • Medicaid clients will have access to more health care services at new settings that were previously ineligible.


David Johnson
Federal programs manager​