Behavioral Health Benefits Remain Key Focus for Medicaid Programs

State Medicaid programs continue to expand behavioral health benefits, especially for specific high-needs populations.

Several states have rolled out new behavioral health benefits or enhanced existing ones. All the while, no states have plans to restrict behavioral health benefits during fiscal year 2023, according to a new survey of state Medicaid leaders from the Kaiser Family Foundation (KFF).

Last fiscal year, only two states — Montana and Oklahoma — trimmed duplicate behavioral health benefits that were available through other state programs or Medicaid benefits, according to a KFF Medicaid leadership survey report.


“States are focusing on both long-standing issues and new priorities, including new and expanded initiatives to improve equity and reduce health disparities, maintain access to telehealth, improve behavioral health access and supports, and address workforce challenges,” the report states.

State Medicaid programs are targeting key populations including those involved with the justice system, children, pregnant and postpartum people, and those who receive long-term services and supports (LTSS).

Many states reported increased behavioral health benefits for mental health and substance use disorder (SUD) treatment across “institutional, intensive, outpatient, home- and community-based, and crisis services” settings.


At least 10 states are expanding coverage of crisis services, while many others are enrolling in the federal Certified Community Behavioral Health Clinic (CCHBC) model or adopting the collaborative care model for integrated care, developed at the University of Washington.

Despite the positive outlook from the benefits and care delivery perspective, the end of the federal public health emergency (PHE) would result in fewer people getting care through Medicaid, the single largest payer for behavioral health services.

During the pandemic, the Centers for Medicare & Medicaid Services (CMS) allowed states to make it easier for people to get Medicaid coverage in exchange for a higher federal match for Medicaid spending. Total enrollment for adults and children in Medicaid in the U.S. increased to 89.4 million in June, a 26.5% increase from February 2020.

“When the PHE ends, states will begin processing redeterminations and millions of people could lose coverage if they are no longer eligible or face administrative barriers despite remaining eligible,” the report states. “Current CMS guidance indicates states must initiate all renewals and other outstanding eligibility actions within 12 months after the PHE ends.”

The KFF report doesn’t estimate how many people may lose access to behavioral health benefits via Medicaid. The average decline projection for the fiscal year 2023 from the state Medicaid directors was 0.4%.

The U.S. The Office of the Assistant Secretary for Planning and Evaluation, part of the Health and Human Services Department, estimated that 17.4%, or about 15 million people, will lose coverage in an August report.

Expanding benefits

For the fiscal year 2023, 14 states reported benefit enhancement or additions to mental health and SUD treatment, the most frequently expanded benefit regardless of care type. In the prior year, that number was 16, with some states expanding these benefits for both fiscal years.

Of the seven total care types tracked, the report states that two Medicaid programs added or enhanced autism treatment services: the District of Columbia and South Carolina.

Massachusetts added behavioral health benefits for children younger than 21 who receive a positive behavioral health screening, regardless of diagnosis, to provide earlier intervention and hopefully prevent worse conditions.

Massachusetts’ Medicaid program, called MassHealth, will see a statewide network of community behavioral health centers and a 24/7 help-and-crisis line go live in January, Amanda Craft, assistant secretary for MassHealth in the Massachusetts Executive Office of Health and Human Services, said during a webinar hosted by KFF.

The telehealth ‘silver lining’

Behavioral health remains a top specialty with telehealth utilization, the report states.

About 79% of states reported that behavioral health was among the highest used services for telehealth; about half of the states identified mental health services as the most utilized. However, the report did say that directors are wary of the quality of behavioral health delivered via telehealth, along with maternity, dental and children’s services.

“Looking ahead, states are weighing the expanded access that telehealth brings — especially for behavioral health services and in rural areas — against quality and other concerns,” the report states.

The findings are in line with other research. Another KFF report from earlier in the year found that 39% of all telehealth visits from March to August 2021 were for mental health or SUD issues. Further, 36% of mental health and SUD outpatient visits were delivered via telehealth during the same period; 5% of all other outpatient visits were delivered via telehealth.

However, mental health services for Medicaid enrollees have dropped during the pandemic despite the increased use of telehealth.

States are increasingly looking to community health workers, peer support workers and other non-clinical staff to magnify the impact of the care provided.

Also, the MassHealth primary care affordable care organization (ACO) program will include payment tiers that are differentiated by the use of integrated care and peer support services, Kraft said.

“What we’ve done is build in both funding and flexibility and — increasingly — requirements for providers to utilize community health workers,” she said. “As part of that model, we’re encouraging primary care practices to implement team-based care that includes community health workers, and then also includes peer workers to support individuals and families. So some of those costs are built into the investments that we’re making.”

Most states assumed that Medicaid enrollment would decrease as the PHE protections are slated to end early in FY 2023. This is expected to be tied to lower Medicaid spending as well.

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