On November 13, 2018, the Centers for Medicare & Medicaid Services (CMS) informed state Medicaid directors about a new option that would allow states to receive reimbursement for short-term psychiatric care provided in an institution of mental disease (IMD) for adults with serious mental illness (SMI) or children with serious emotional disturbance (SED). The new option would require a 1115 Medicaid demonstration waiver to include services provided to short-term residents of psychiatric hospitals or residential treatment settings with more than 16 beds that qualify as an IMD. In the guidance letter, CMS emphasized that the authority would only . . .