This is an exclusive BHB+ story
While addressing the opioid crisis is often hailed as a bipartisan priority, the Trump administration’s sweeping reforms to mental health and substance use disorders (SUD) funding reveal a significant shift in America’s approach to these challenges.
The new administration has focused its efforts on cracking down on illegal fentanyl and opioids entering the country. Meanwhile, it appears to be cutting back on funding and agencies involved in addressing the crisis.
I can foresee this shift in focus dramatically changing public health – and even direct care efforts surrounding substance use disorder in America.
Still, many of those previous investments, some of which were even put in place by the first Trump administration, have demonstrated their worth. For example, the CDC recently released a report that found a nearly 24% decline in U.S. drug overdose deaths from 2023 to 2024.
The CDC attributes the decline in overdose deaths to the data-driven distribution of naloxone, increased access to evidence-based treatment for SUD, a shift in the illegal drug supply, and investment in prevention and response programs, including the CDC’s Overdose Data Action program.
However, last week, the Department of Health and Human Services (HHS) announced that it would lay off roughly 10,000 employees – including 2,400 at the CDC alone. The massive layoffs in HHS has called for concern among behavioral health providers and allied organizations.
“HHS’s activities touch the lives of virtually all Americans and play a significant role in helping people impacted by mental health conditions and substance use disorders in local communities across the country,” a letter jointly penned by 12 leading national mental health and substance use organizations said. “However, these deep staffing cuts leave us with questions about how this vital, lifesaving work will continue — or how any of these changes would improve the mental health of Americans. The lack of clarity around these layoffs, compounded by the termination of staff who promote and ensure transparency across HHS, makes this situation even more dire.”
The layoffs were not the only change; HHS also announced the consolidation of the Substance Abuse and Mental Health Services Administration (SAMHSA) and the cancellation of $11.5 billion in COVID-era grants that included addiction treatment and mental health initiatives.
All of these changes point to a shift in how the administration plans to address, care and fund treatment and prevention for SUDs.
In this week’s exclusive BHB+ Update, I will discuss:
– The new changes that the Trump administration has put in place
– How providers and patients could be impacted by these changes
– Why opioid settlement money could be a new place to look for funding
Changes for SAMHSA
SAMHSA was once the go-to for leading public health efforts related to mental health and SUD. But last week, HHS, led by Robert F. Kennedy, Jr., announced that SAMSHA would be consolidated into the newly formed Administration for a Healthy America (AHA), along with a number of other health administrations.
The move was part of a larger initiative by HHS to go from 28 divisions to 15. Kennedy said that AHA would preserve the core function of the consolidated agencies while adding a level of efficiency.
SAMHSA has been on the chopping block for months now. In February, the Subcommittee on Delivering on Government Efficiency (DOGE) fired over 10% of SAMHSA’s staff, according to CBS News.
And more reductions could be on the table. According to a letter penned by 50 members of Congress to Kennedy, additional reductions could impact 50% to 70% of SAMSHA staff.
Experts are warning that the proposed cuts could significantly impact the prevention efforts and the movement toward evidence-based treatments for SUDs.
“As the lead U.S. health agency delivering behavioral health services, SAMHSA has adopted a population health approach by prioritizing ‘upstream services’ informed by psychological science,” the American Psychological Association recently wrote in a statement. “Such services are provided early to avoid crisis through prevention and timely intervention. They include behavioral health integration, trauma-informed care, suicide prevention, and evidence-based treatments for opioid and other substance use disorders. These strategies improve health outcomes and are a smarter investment in our nation’s mental health.”
In the letter to Kennedy, congressional representatives noted that cutting SAMSHA would have a dire effect on Opioid Treatment Programs (OTPs), which are the only providers in the country allowed to dispense methadone. Methadone can be particularly effective in treating patients with a higher tolerance to opioids.
SAMHSA established an accreditation requirement in 2001 to help OTPs ensure quality care to patients.
“[SAMHSA] ensure[s] that addiction treatment is safe and available by ensuring that [OTPs] comply with federal regulations,” the letter said. “There are at least 1,500 of these opioid treatment programs across the country who are relying on this support. Without adequate staff at SAMHSA, OTPs cannot operate, and patients will not receive addictions medications, counseling and other behavioral health services. SAMHSA staff certify mobile medication units which are critical in increasing access to medications for opioid use disorders especially in rural areas. Without SAMHSA staff, these mobile medication units won’t be deployed in our communities.”
Unless regulation changed, the end of OTPs could potentially inhibit methadone prescribing. This could be detrimental to patients who have a high tolerance to opioids, with other medication-assisted-treatment options are not as effective.
While the change would impact a slew of nonprofits, big for-profit organizations in the field would also take a hit. For example, Acadia Healthcare (Nasdaq: ACHC) has a network of OTPs across the country.
Unreliable grant funding
SAMHSA is also responsible for dolling out local and state grants. It’s unclear if programs relying on these grants will be able to count on these funds in the future – but early signs suggest not.
As for grants at large, Trump recently announced his plans to pull back $11.5 billion in COVID-era grants related to addiction and mental health, among other conditions. HHS attributed the cuts to the end of the pandemic.
“The COVID-19 pandemic is over, and HHS will no longer waste billions of taxpayer dollars responding to a non-existent pandemic that Americans moved on from years ago,” the agency said in a statement.
While a group of Democratic-led states are suing the government over this move, if it goes into effect, states and local governments across the country could lose the funding to support addiction treatment. I would predict this would disproportionately impact nonprofits caring for vulnerable populations.
Anecdotally, it seems like the funding cuts will have an outsized impact on SUD treatment programs.
What’s a provider to do?
While there are few options for providers to future-proof themselves regarding the changes at the federal level, I have heard some states are beginning to look into the opioid settlement funds as a potential alternative to federal funding.
I don’t think this is necessarily a long-term solution to the funding crisis that many state and local entities will face, but it could be a bandaid. The largest opioid settlement is $26 billion, according to KFF News.
Still, those resources were initially intended to be used in conjunction with federal funding to combat the opioid epidemic. And public health organizations and providers need all the funding they can get when it comes to treating OUD.
At the BHB VALUE conference in March, several behavioral health leaders discussed the importance of preparing for funding cuts and changes now. Actions providers can take include going to their board of directors for support, further diversifying their revenue streams and doubling down on operational efficiency.
