Why are there so few beds? Deinstitutionalization created a legal legacy that still today blocks funds for psychiatric hospitalization. As we know, the 1963 Community Mental Health Act was about reducing the hospitalization of patients as the federal government developed a community mental health care system. And with the Medicaid Institutions for Mental Diseases (IMD) exclusion, written into the Medicaid Act of 1965, Medicaid funding for care of an adult in any mental health facility having more than sixteen mental health beds was, and still is, prohibited.
