Financial Strain Has 40% of Mental Health, SUD Treatment Organizations Facing Closure

Behavioral health providers have long struggled with low reimbursement rates and slim margins, and the coronavirus only compounded those problems. As a result, a large number of American mental health and addiction treatment organizations could be forced to shut their doors if they don’t get more federal relief, the National Council for Behavioral Health found in a newly released survey.

To gather the findings, the National Council polled a sample of its 3,326 member organizations, the majority of which are safety net providers that offer behavioral health services to the under- and uninsured. The poll was conducted online from Feb. 1 through Feb. 18, 2021.

Of the 332 members surveyed, 40% said they would not be able to survive past the end of 2021 under their current financial situation.


Nation Council President and CEO Chuck Ingoglia said the striking figure highlights the ongoing need behavioral health providers have for additional government support.

“Relief funding thus far has been enormously important,” Ingoglia said in a press release announcing the news. “But relief funding is finite – demand for critical mental health and substance use treatment, bolstered by COVID-19, is not.”

Amid the coronavirus, 67% of behavioral health organizations surveyed by the National Council said they have seen an increased demand for overall services, while 63% reported an uptick for youth services specifically.


Despite that high demand, 68% of organizations surveyed reported having to cancel, reschedule or turn away patients, and nearly half have seen their patient waitlists increase by more than 7%.

Plus, half of all organizations reported that they have had to either furlough employees or let go of them altogether. The workforce decrease threatens to further exacerbate existing problems, as the industry already has trouble attracting and retaining enough talent to keep up with high behavioral demand.

“The future of our nation’s mental wellbeing – particularly our young people – is at stake,” Ingoglia said. “We call on Congress and the administration to collaborate with us to find solutions around strengthening the behavioral health care workforce and providing increased support to address the continued rise in demand for services.”

The National Council’s call to action comes after less than 40% of behavioral health providers were able to benefit from Provider Relief Fund (PRF).

The PRF was initially created last April as part of the CARES Act stimulus package, with $100 billion being set aside for health care providers after Congress passed the legislation. However, a recently released report from the Medicaid and CHIP Payment Access Commission, which is a nonpartisan legislative branch consultancy, found that only 38% of eligible mental health and substance use providers received any funds.

While behavioral health providers’ financial outlook isn’t great, it’s better than it was about six months ago. Back then, 39% of providers said they only had the money to survive six months or less, according to a similar National Council survey released in September.

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