States have considerable latitude in shaping their Medicaid programs.  While each State's Medicaid program must meet mandatory Federal requirements, including covering essential health service, and serving core eligibility groups, Federal law and regulations give States many options.  This section highlights two programs, approved under different sections of the statute, focused on serving persons with mental illness.

The Behavioral Health Waiver for Adults with Severe Disabling Mental Illness (SDMI Waiver) was approved by CMS to be effective on December 1, 2006. It is designed to provide a consumer 18 years of age and older with SDMI a choice of receiving long term care services in a community setting as an alternative to receiving long term care services in a nursing home setting.  The consumer must meet nursing home level of care and reside in an area of the state where the SDMI Waiver is available.  The SDMI Waiver will be available in three geographical areas based on an urban core. Those areas are Yellowstone County (including counties of big Horn, Carbon, Stillwater and Sweet Grass), Silver Bow County (including counties of Beaverhead, Deer Lodge, Granite and Powell) and Cascade County (including counties of Blaine, Chouteau, Glacier, Hill, Liberty, Pondera, Teton and Toole).

The objective of the SDMI Waiver is rehabilitation and recovery, while encouraging the consumer to accept personal responsibility for services and desired outcomes.  The State will ensure the providers of HCBS services possess and demonstrate the capability to effectively serve consumers with SDMI. 

The package of services to be included in the SDMI waiver are:  Case Management, Chore, Homemaker,  Personal Assistance (and Specially Trained Attendant Care), Adult Day Health, Residential Habilitation,  Day Habilitation, Prevocational Services, Supported Employment, Respite, Psychosocial Rehabilitation, Adult Residential Care, Chemical Dependency Counseling, Dietitian/Nutrition/Meals, Habilitation Aide, Personal Emergency Response Systems,  Private Duty Nursing (and Registered Nurse Supervision), Specialized Medical Equipment and Supplies, Supported Living, Non-Medical Transportation, Extended State Plan-Occupational Therapy, Illness Management and Recovery, and Wellness Recovery Action Plan.  Services are reimbursed fee for service; there is no managed mental health plan. 

The Department of Public Health and Human Services, Addictive and Mental Disorders Division is the lead agency for the operation of the SDMI waiver.  The State Medicaid Director is also the Deputy Director for the Department of Public Health and Human Services.

The optional 1915(i) State Plan Home and Community Based Services (HCBS) benefit option allows individuals to access home and community based services through the State plan instead of a waiver. Unlike 1915(c) waivers, individuals do not have to meet an institutional level of care in order to receive these services and States do not have to demonstrate that 1915(i) services cost the same or less than institutional services.

Iowa was the first State to receive approval to add 1915(i) services to its State plan, to be effective on January 1, 2007. Iowa's State plan HCBS benefit offers statewide case management services and habilitation services (which includes home-based Habilitation, day habilitation, prevocational habilitation and supported employment).  To receive these services, individuals must have a need for assistance on a continuing or intermittent basis for at least two years in at least two of the following criteria:

-be unemployed, or employed in a sheltered setting, or have markedly limited skills and a poor work history;

-require financial assistance for out-of-hospital maintenance and may be unable to procure this assistance without help;

-show severe inability to establish or maintain a personal social support system;

-require help in basic living skills such as self-care, money management, housekeeping, cooking, or medication management; and/or

-exhibit inappropriate social behavior that results in demand for intervention. 

In addition, individuals must meet the risk factor of needing psychiatric treatment more intensive than outpatient care, and/or have a history of psychiatric illness resulting in at least one episode of continuous, professional supportive care other than hospitalization.