Congress Tries Again to Increase Medicaid Spending for Behavioral Health

Federal lawmakers are taking another stab at increasing funding for behavioral health expenditures in the Medicaid program.

A version of the Medicaid Bump Act was introduced in the U.S. Senate and Congress on March 12. The bill would create financial incentives for states to elevate spending on behavioral health beyond levels in 2019. Specifically, it would create an enhanced Federal Medical Assistance Percentage (FMAP) rate of 90% for mental health and substance use disorder (SUD) treatment.

States and their Medicaid programs would not be allowed to use the additional federal money to replace state funding levels. The new funds would be used to increase the capacity, efficiency and quality of behavioral health within Medicaid provider networks, according to a news release.


“Unfortunately, systemic underinvestment has left far too many out in the cold and without a place to seek these vital resources,” Rep. Paul Tonko (D-N.Y.) said in a news release. “Our Medicaid Bump Act begins to right that wrong, bolstering availability for providers by increasing the federal reimbursement rate for mental and behavioral health care services under Medicaid.”

About 40% of those on Medicaid have behavioral health conditions.

Sen. Tina Smith (D-Minn.) and Sen. Debbie Stabenow (D-Mich.) are the sponsors of the bill’s Senate version. Tonko filed an equivalent bill in the House in July 2023. He is joined by co-sponsors Rep. Brian Fitzpatrick (R-Penn.) and Rep. David Trone (D-Md.).


“As Co-Chair of the Bipartisan Mental Health and Substance Use Disorder Task Force, I’m proud to co-lead this bipartisan, bicameral legislation that will provide an incentive for states to increase their Medicaid spending on behavioral health services in order to expand access to care in areas where the demand outstrips the supply of service providers,” Fitzpatrick said in the release.

The bill would charge the Secretary of Health and Human Services (HHS) to define which services qualify as eligible behavioral health services for the enhanced FMAP. It would also enact an annual reporting requirement detailing the impact of the funding increase on behavioral health utilization.

Legislation that would have had a similar effect and used the same name first popped up in Congress in 2017, according to a cursory review of the legislative body’s website. At that time, then-Rep. Joe Kennedy III sponsored the bill. He filed it again in 2019. Tonko and Smith took up the legislation in 2021. Tonko refiled in 2023. 

Medicaid has seen greater reform attention during the Biden administration. A recent funding bill made certified community behavioral health centers (CCBHCs) permanent by amending the Social Security Act. In February, The Centers for Medicare and Medicaid (CMS) released new guidance to state Medicaid directors on allowing master’s-level social workers, marriage and family therapists, and other master’s level behavioral health clinicians greater participation in Medicaid.

However, other analyses highlight gaps in the system. A review of the Medicaid program found that about 75% of states are missing “core” behavioral health crisis response services.

Companies featured in this article: