Low-income Coloradans with mental illnesses are poised to receive longer hospital stays after state legislators set aside money to expand a decades-old Medicaid rule.

Federal law requires that Medicaid patients hospitalized in psychiatric facilities be discharged after 15 hospital days in a month or the facility doesn’t get paid. The rule was intended to prevent hospitals from warehousing patients, but advocates and psychiatrists say that it instead pushes hundreds of vulnerable Coloradans out of the facilities prematurely and into a cycle of homelessness, incarceration and emergency room visits.

That may finally change. Tucked into the Colorado legislature’s budget bill for next year is $7.2 million to allow Medicaid patients to stay in psychiatric hospitals for 30 days. Patients could stay up to 60 days, so long as the statewide average for Medicaid psychiatric hospitalizations remains at a month.

Between 300 and 400 Colorado Medicaid patients need longer than the two weeks currently allowed.

“People are cycling through these places so much, and if they could stay longer, and cycled less, we will be in a much better place,” said Rep. Judy Amabile, a Boulder Democrat who pushed for the money.

The budget, which was set to pass an initial vote in the House on Thursday, still needs one more vote in the lower chamber before restarting the process in the Senate. But the money was set aside by the lawmakers crafting the budget, meaning it’s almost certain to survive and be signed into law by Gov. Jared Polis.

Once the money’s appropriated, a waiver expanding hospital stays would need to be approved by the federal Centers for Medicare and Medicaid Services. But other states have already taken similar steps, meaning approval is likely. Much of the money set aside in the state’s budget — $5 million — is federal.

“By prioritizing funding for these Coloradans to be able to get the care they need rather than be prematurely discharged, we are saving state resources in the long run and creating healthier communities,” Vincent Atchity, the president and CEO of Mental Health Colorado, said in a statement. “Policies like this one that create a more robust system of care will help us end the costly and deadly cycles that perpetuate Colorado’s mental health crisis.”

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