November 5, 2008

Deficit Reduction Act (DRA) Fact Sheet: Medicaid Services for Children Under the DRA

The Deficit Reduction Act (DRA) of 2005, P.L 109-171, was signed into law on February 8, 2006 and authorizes a number of mandatory and optional changes to Medicaid. The DRA includes several Medicaid provisions that affect children with emotional and behavioral disorders, including opportunities for States to improve access to community-based care. Since its enactment in 1965, Medicaid has provided a broad array of services for children, particularly through the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) mandate. However, many children with emotional and behavioral disorders have been unable to access the kinds of Medicaid-covered home- and community-based services that would enable them to avoid unnecessary institutionalization. The DRA attempts to address these barriers in several ways: creating the Family Opportunity Act option to expand access to Medicaid and establishing the Alternatives to Psychiatric Residential Treatment Facilities demonstration grants to improve access to community-based care. Families, providers, and policymakers must work together to ensure that children in their State are able to take advantage of the new Medicaid opportunities that are available. This fact sheet covers the major DRA Medicaid provisions affecting children with emotional and behavioral disorders.