MedicaidCoverageMedium impact
Prohibition on Reimbursing for Outpatient Service for Adults Admitted to Residential Programs that Meet the Definition of IMD Under Federal Medicaid Rules
Maryland Medicaid·MD · Psychiatry, Family Medicine, Internal Medicine +1 more·Substance Use Disorder
We identified it
Jun 20, 2026
Summary
Maryland Medicaid will no longer reimburse outpatient services for adults admitted to residential substance use disorder programs that qualify as Institutions for Mental Disease (IMD) under federal rules. This creates a billing restriction where outpatient and residential services cannot be billed simultaneously for the same patient.
Action Required
Immediately: Billing team must verify patient residential status before submitting outpatient claims for substance use disorder services. Create workflow to check if adults are admitted to IMD-qualifying residential programs before billing any outpatient services. Claims for outpatient services during residential IMD stays will be denied by Maryland Medicaid.