Current State:
Colorado has various local programs for responding to behavioral health crises (e.g. co-responder teams pairing police with clinicians, mobile crisis units), but there isn’t a statewide coordination of best practices or funding strategies. Under current law, when someone is placed on an emergency 72-hour mental health hold (M-1 hold), the facility must evaluate them “as soon as possible,” but no specific requirement exists to assess ongoing hold criteria during that evaluation. Also, if a facility cannot treat someone, practices for transfer or discharge vary. Medicaid generally does not pay for long stays in mental health institutes (IMDs) due to federal law. In 2024, Colorado’s budget allowed up to 30-day stays in IMDs with federal approval, but there was no permanent statutory change for longer stays.
Proposed Changes:
SB25-042 takes multiple steps to strengthen crisis response: (1) It directs the Dept. of Public Safety (DPS) and BHA to convene a stakeholder group by end of 2025 to map out existing local crisis programs (co-responder, mobile crisis, etc.), find gaps (especially funding or reimbursement gaps), and recommend how to fill those gaps. The findings and model programs must be listed publicly. (2) It requires BHA and HCPF to report to the legislature by Jan 1, 2027 on funding shortfalls for crisis services and possible state/federal funding solutions. (3) It authorizes HCPF to cover up to 60 days of inpatient mental health treatment in an Institute for Mental Disease (IMD) (a psychiatric hospital) for Medicaid patients, if allowed by federal law. This essentially codifies a recent budget change to pay for longer psychiatric hospital stays. (4) The bill tightens M-1 hold procedures: the required evaluation must include an assessment of whether the person still meets hold criteria (this was previously optional), and a facility may only discharge a patient on a mental health hold if the patient no longer meets hold criteria. If the patient still needs care that the facility cannot provide (e.g. specialized care), the facility must transfer them to an appropriate facility rather than simply discharging. These changes aim to ensure people in crisis aren’t released prematurely or lost in the system.
Impact on Providers:
Behavioral health providers, especially those in crisis work (crisis teams, emergency departments, psychiatric hospitals), would see more coordination and support. The stakeholder group and subsequent recommendations could lead to new funding streams or programs that bolster local crisis units. For example, providers might get better reimbursement for mobile crisis services if gaps are identified. Hospitals and crisis centers will need to adjust protocols: evaluations for holds will take a bit more time to document that criteria check, and they can no longer discharge someone on a hold until stable or appropriately transferred. This could mean short-term increased responsibility for hospitals to find placement or keep patients longer, but it ensures patients get needed care, potentially reducing repeat crises. Providers in psychiatric facilities may benefit from Medicaid covering longer stays (up to 60 days), which means more treatment days can be reimbursed – allowing patients to receive adequate inpatient care without facilities absorbing uncompensated costs. Overall, the bill seeks to fill systemic gaps, so behavioral health professionals may gain clearer protocols, more resources, and a more continuous care system for people in crisis. Improved data sharing (through annual interoperability reports, which were in the introduced bill) and the convening of Continuums of Care could also enhance how providers coordinate care across regions.
