The Centers for Medicare & Medicaid Services (CMS) is issuing a technical clarification Question and Answer (Q and A) document focused on a type of residential setting recently defined in statute called a Qualified Residential Treatment Program (QRTP) for foster care children. These programs provide a trauma-informed model of care to address the needs of children with serious emotional or behavioral disorders or disturbances. This document clarifies that QRTPs may be included in the section 1115 demonstrations described in the State Medicaid Director Letter on “Opportunities to Design Innovative Service Delivery Systems for Adults with Serious Mental Illness or Children with Serious Emotional Disturbance”, issued in November of 2018.

The Q&A document identifies the statutory basis and definition of a QRTP, explains the Medicaid Institution for Mental Diseases (IMD) payment exclusion, discusses the intersection of a QRTP and the IMD exclusion, and explains how states may include QRTPs in a section 1115 SMI/SED demonstration to ensure Medicaid coverage for services provided to Medicaid enrolled children residing in QRTPs.