Behavioral Health Waivers

Serious Mental Illness

The Centers for Medicare & Medicaid Services (CMS) approved Alabama’s request for a new section 1115(a) demonstration, titled “Institutions for Mental Disease Waiver for Serious Mental Illness” on May 20, 2022. This demonstration authorizes Alabama Medicaid to receive federal financial participation (FFP) for services provided to Medicaid recipients during short term stays for acute care in psychiatric hospitals that qualify as institutions for mental diseases (IMDs) in Baldwin and Mobile counties for Medicaid-eligible individuals ages 21-64 diagnosed with Serious Mental Illness.

SMI Waiver Documents

Substance Use Disorder

Alabama Medicaid is submitting a Section 1115 Demonstration to seek federal authority to:

  • Allow the State to include Subtstance Use Disorder (SUD) residential treatment provided in Institutions for Mental Diseases (IMDs) as part of an essential continuum of care for Medicaid-enrolled individuals with Opioid Use Disorder (OUD) or SUD.
  • Extend Medicaid State Plan Medicaid rehabilitation option services and residential treatment in an IMD to qualified low-income individuals without health insurance screened as meeting the criteria for SUD in specific areas of the State.

Through this demonstration, Alabama Medicaid will remove Medicaid payment barriers for OUD and SUD treatment to provide coordinated and comprehensive treatment in outpatient and community-based settings as well as in residential and inpatient treatment settings including those settings the state identifies as an IMD. Alabama Medicaid aims to increase critical access to residential treatment capacity, allowing Alabama to provide an effective SUD treatment continuum of care with interventions capable of meeting individuals’ changing needs for various levels of care (LOCs). In addition to improving access to the continuum of SUD treatment services, Alabama Medicaid also aims to enhance linkages between behavioral health and physical health providers, thereby increasing the integration of whole-person care.

SUD Waiver Documents


Questions regarding this waiver application may be submitted by email to or by mail c/o Administrative Secretary, Alabama Medicaid Agency, PO Box 5624, Montgomery, AL 36103-5624.