Behavioral health is in the political crosshairs. This series tracks the Trump administration’s proposed policy changes, funding cuts and structural overhauls that could reshape behavioral health care in the U.S. From HHS reorganizations to Medicaid shifts, we’re following what matters — and what’s at stake — for providers, payers and investors. (Last update: May 8, 2025)
May 8, 2025
Trump walks back original Surgeon General pick, names influencer as new nominee
Trump announced Dr. Casey Means would replace his previous pick as the new nominee for U.S. Surgeon General via a May 7 Truth Social post, changing course one day before his previous nominee, Dr. Janette Nesheiwat, was scheduled to be confirmed before Congress on May 8.
Now, the agenda item has been crossed out on the Senate Health, Education, Labor and Pensions Committee’s revised schedule with a note that states, “Dr. Janette Nesheiwat will no longer appear before the HELP Committee following the withdrawal of her nomination to be Surgeon General.”
Nesheiwat was a former medical contributor on Fox News and was picked as the original Trump administration nominee in November 2024. Recently, she faced criticism over claims that she graduated from the University of Arkansas for Medical Sciences—a claim that appears both on her website and LinkedIn. However, CBS News reported that records indicate she earned her medical degree from the American University of the Caribbean. She did complete a residency through UAMS.
Trump did not comment on the reasoning behind the change in his post, but stated Nesheiwat would still work in “another capacity at HHS.”
Means is a Stanford University School of Medicine graduate. She reportedly dropped out of her surgical residency and has had an inactive medical license since 2024. Means has also taken on the persona of social media “influencer” and regularly posts recipes and grocery recommendations to her followers under the handle @drcaseyskitchen.
In a May 7 blog post, Means underscored her support for HHS Secretary Robert F. Kennedy Jr.’s views and outlined 15 areas of improvement she hopes to see under the new administration, which she now will likely become part of. Her “wishlist,” as she calls it, ranges from reforming the National Childhood Vaccine Injury Act, removing conflicts of interest at the National Institute of Health, investigating food supply toxins and adding warning labels to ultra-processed foods.
She also advocates for a transition to value-based care models.
“We must base any value-based care business model for healthcare on actual value: better outcomes over lower cost. We must not confuse a medicated patient with a good outcome. A healthy patient with well-functioning cells is a good outcome,” Means wrote in the blog update. “These two aren’t mutually exclusive, but they are not the same. If doctors were paid more (incentivized) for truly healthy patients, we would rapidly adopt a prevention approach in clinical practice (healthy eating, exercise, stress reduction), which is by far the cheapest way to get the best outcomes.”
Her brother, Calley Means, is reportedly an ally of HHS Secretary Kennedy and currently works as a special government employee for the United States Department of Health and Human Services.
“I am so proud of her and know she will help the President and @SecKennedy change the world,” he wrote in a post on X.
Trump stated, “Dr. Casey Means has the potential to be one of the finest Surgeon Generals in United States History,” boasting that she has “impeccable” credentials that align with his Make America Healthy Again agenda.
A date for her confirmation before the Senate has not yet been confirmed.
20 attorneys general join together in lawsuit over Trump administration HHS cuts
Attorneys general from 19 states and the District of Columbia filed a lawsuit on May 5 against the administration over these cuts, particularly related to how “mental health and substance use services have been completely gutted as a result of the administration’s restructuring.”
The move comes as many have raised concerns about whether the administration’s restructuring and layoffs were legal.
“The administration fired hundreds of employees working on mental health and addiction treatment, including half of the entire workforce at the Substance Abuse and Mental Health Services Administration (SAMHSA), and closed all ten SAMHSA regional offices,” the New York Attorney General’s release states. “The 988 Suicide and Crisis Lifeline team was slashed, and the National Survey on Drug Use and Health was halted, blinding policymakers to trends amid an escalating overdose crisis.”
While the attorneys general cite a number of issues related to the Department of Health and Human Services’ restructuring and reduction-in-force moves, their arguments over the illegality of these actions primarily center around the mass terminations, extensive program closures and laboratory shutdowns. They argue the administration has undermined constitutional provisions by taking such actions.
The coalition of attorneys general is requesting the court “immediately halt the Trump administration’s unlawful dismantling of HHS and to require the restoration of critical health programs to protect the health and well-being of people nationwide.”
“Dismantling HHS by terminating the people necessary for it to meet its own mandates, and paralyzing it by means of a confusing reorganization, is an unlawful effort to undercut the will of Congress who ordered the agencies and programs to run,” lawsuit documents claim.
The lawsuit, totaling more than 100 pages, was filed in the U.S. District Court of Rhode Island.
May 1, 2025
Department of education confirms $1B in cuts to school mental health grants over DEI discrepancies
The Department of Education will not renew around $1 billion in grants that were intended to expand school-based mental health services and hire psychologists and counselors as part of the bipartisan 2022 Bipartisan Safer Communities Act.
According to multiple outlets, the Department of Education reportedly confirmed the cuts in a letter, stating it “plans to re-envision and re-compete its mental health program funds to more effectively support students’ behavioral health needs.” Behavioral Health Business reached out for a copy of the document and instead the department replied with the following statement:
“We can confirm that the Department will not renew $1 billion worth of grants,” a spokesperson wrote. “These are not cancellations, but rather notices of non-continuation in cases that awards were not advancing administration priorities.”
The statement went on to criticize provisions related to diversity, equity and inclusion, which were also included in the act signed into law by former President Joe Biden, as “deeply flawed priorities” that have “nothing to do with mental health and could hurt the very students the grants are supposed to help.”
The discontinuation of the grants were first reported by Christopher Rufo, a conservative activist, who published screenshots on X from the grant documents that detail priorities related to hiring diverse candidates in school counselor roles.
Citing examples from the grants, a spokesperson told BHB the following examples from the documents were misaligned with current Trump administration priorities:
- A diversity goal for applicant schools, where eight out of 24 counselors added through the grant (and matching funds) should be non-white.
- Noting that training counselor educators have the responsibility to prepare the next generation of counselors to recognize and challenge systemic injustices, antiracism and the pervasiveness of white supremacy to ethically support diverse communities.
- Noting that training for practitioners applies a critical compassion perspective – as opposed to a colorblind perspective (race and color do not matter) or deficit-based models applied with a sense of pity.
- The administration noted The Racial Trauma Module, which trained therapists to focus on racial stress and trauma, is not aligned with their priorities.
- Social Justice learning objectives that assessed personal goals for anti-racist pedagogy practice, deconstructed the role personal identity and positionality plays in education, examined the influences of racism and white privilege in education practice, developed the skills for mindful facilitation and conversational “brave spaces,” and facilitated conversations on best practices in anti-racist pedagogy.
“We owe it to American families to ensure that taxpayer dollars are supporting evidence-based practices that are truly focused on improving students’ mental health,” Biedermann said.
Are HHS layoffs illegal?
Weeks after announcing its major restructuring, which included the termination of nearly 10,000 employees and the closure of several related agencies, the Department of Health and Human Services (HHS) is under scrutiny for these actions, possibly being illegal.
When conducting a reduction-in-force procedure, federal agencies are to adhere to the structures outlined by the U.S. Office of Personnel Management under Title 5 in the Code of Federal Regulations—Part 351. Under the regulations, employees must be given written advanced notice, information about the action being taken, information about employees’ right to appeal, access to inspection of retention records, severance pay, and career transition assistance, among other things.
Legal experts and unions have criticized HHS’ handling of its RIF procedure, claiming issues like “incorrect paperwork, improper competitive areas and lack of transparency,” and accusing the agency of “sidestepping” normal procedures, according to one employment law firm.
Over a dozen HHS current and former employees told Healthcare Dive earlier this month that they reported multiple discrepancies in the normal RIF process, with some even reporting incorrect information on termination letters.
Multiple groups, including the Federal Practice Group and the National Treasury Employees Union, which represents employees in 37 federal agencies and offices, have filed grievances and plan to appeal the layoffs, Healthcare Dive reported.
Pitched as a move to optimize its workforce, several groups, including the National Medical Association, the Association of American Medical Colleges, Union of Concerned Scientists, National Nurses United and Mental Health America, among others joined in criticizing the cuts noting they will slow progress and could do more harm than good to public health.
“Unfortunately, the immediate reduction in force means these agencies will lose staff with years of experience and expertise, and the pathway for the transition of their knowledge and the critical services they operate is unclear,” the MHA statement reads. “This has the potential to jeopardize years of work and recent progress, like reducing overdose deaths.”
BHB reached out to HHS to request comment on the illegality of these cuts and has not yet received a response.
April 15, 2025
Office on Smoking and Health shuttered
The Centers for Disease Control will be closing the Office on Smoking and Health, according to STAT News.
The department responsible for tobacco use prevention campaigns and collecting national data around smoking trends officially closed on April 1. The closure impacted around 120 employees, according to STAT.
The closure of the office has sparked backlash from industry groups, who say the move could mean an uptick in youth smoking.
“It is inexplicable and especially harmful that these cuts are coming at a time when the FDA should be redoubling its enforcement efforts against the many illegal, flavored e-cigarette products that have entered our country from overseas and put kids at risk,” Yolonda Richardson, president and CEO, Campaign for Tobacco-Free Kids, said in a statement. “These cuts will make it easier for unscrupulous companies to continue targeting our kids with illegal, flavored and highly addictive e-cigarettes. Furthermore, cuts to the FDA’s Center for Tobacco Products will not save taxpayers money as the center is funded with user fees paid by the tobacco industry.”
Industry groups pushback on HHS cuts
National, state and local health organizations are pushing back on the Trump administration’s recent announcement of cuts at the U.S. Department of Health and Human Services and The Substance Abuse and Mental Health Services Administration (SAMHSA).
The organizations say that restructuring HHS would weaken the infrastructure of substance use and mental health services in the country.
“Recent action to rescind $1 billion in appropriated SAMHSA funds slated for critical activities to stem the overdose crisis and the reported 50% reduction in the agency’s workforce threatens the vital infrastructure that supports substance use prevention, treatment and recovery, overdose prevention and other harm reduction strategies, as well as mental health services and supports throughout the country,” the statement says.
The statement argues that federal funding cuts and staff reductions will eventually trickle down to states and local community services and impact millions of at-risk individuals.
Medicaid cuts loom
Congress passed its revised budget resolution, which directs the House Energy and Commerce Committee — which oversees Medicare and Medicaid spending — to cut spending by $880 billion over the next decade.
Likely the bulk of the cuts will come from the Medicaid budget. Cuts to Medicaid could have a significant impact on behavioral health services, especially autism and substance use disorder services.
“Medicaid cuts could have a crippling effect on behavioral health services. Behavioral health services currently already have limited resources and funding, any additional cuts would make things even more challenging,” Dr. Imamu Tomlinson, CEO of Vituity, previously told Behavioral Health Business. “This is especially true for patients at the lower end of the socioeconomic spectrum who depend on behavioral health safety nets.”
April 3, 2025
HHS layoffs begin
On April 1, employees throughout the sprawling U.S. Department of Health and Human Services were informed that their positions were being cut. The news was part of the major restructuring effort aimed at significantly reducing the size of the agencies tasked with safeguarding and advancing public health in the United States.
The layoffs span a wide range of roles, including doctors, scientists, researchers, administrative personnel and high-ranking officials.
Related to the cuts, lawmakers that lead the Senate’s Health, Education, Labor and Pensions Committee have called on HHS Secretary Robert F. Kennedy, Jr., to testify at an April 10 hearing to explain the department’s reorganization.
Director of the National Survey on Drug Use and Health impacted by HHS cuts
Among those impacted by the HHS workforce reduction was Jennifer Hoenig, director of the National Survey on Drug Use and Health (NSDUH), according to The Hill.
Hoenig expressed that she and her whole team at the Substance Abuse and Mental Health Services Administration (SAMHSA) had been let go.
NSDUH is an annual survey conducted in the United States that provides essential data on the use of tobacco, alcohol, illicit drugs and mental health in the civilian, non-institutionalized population aged 12 and older.
States sue Trump administration for funding cuts
A coalition of officials from roughly two dozen states – among them New York Attorney General Letitia James, Colorado Attorney General Phil Weiser, Kentucky Governor Andy Beshear, Pennsylvania Governor Josh Shapiro and leaders from the District of Columbia – have filed a federal lawsuit against the Trump administration’s HHS.
The legal challenge claims health care funding reductions are unlawful, asserting that the federal government failed to offer a reasonable justification or supporting evidence for the decision. According to the attorneys general, the cuts could have devastating consequences for public health.
“The Trump administration is now terminating millions in grants being used in our state to support vaccine clinics for kids, crisis mental health services, opioid abuse intervention, and to control disease spread in health care facilities,” Michigan Attorney General Dana Nessel said in an announcement. “And once again they’re breaking the law to take money that has been granted to the states. These programs keep Michigan healthy and, in some cases, help save lives, and that’s worth standing up and fighting for.”
In Michigan, funding cuts have meant the end of a mental health grant to support state residents with serious mental illness or severe emotional disturbances. A program to support SUD services for marginalized and underserved populations, including pregnant women and rural populations, has also been terminated.
Behavioral health groups speak up
On April 2, 12 national mental health and substance use organizations released a statement related to the “drastic” staffing cuts at (HHS).
“As the nation’s leading mental health, suicide prevention and substance use organizations, we are deeply alarmed by the widespread, immediate staffing cuts and dismantling of entire offices occurring at HHS,” the statement read. “HHS’s critical work is vital to increasing access to mental health and substance use disorder care, improving suicide prevention efforts, stemming the opioid epidemic and reimagining our nation’s mental health crisis response.”
The organizations included:
– National Alliance on Mental Illness (NAMI)
– American Foundation for Suicide Prevention (AFSP)
– American Psychiatric Association
– American Psychological Association
– Inseparable
– Legal Action Center (LAC)
– Mental Health America (MHA)
– National Association for Behavioral Healthcare
– National Association for Rural Mental Health (NARMH)
– National Association of County Behavioral Health and Developmental Disability Directors (NACBHDD)
– The JED Foundation
– Treatment Advocacy Center (TAC)
“This has the potential to jeopardize years of work and recent progress, like reducing overdose deaths,” the statement continued.
April 1, 2025
Trump administration cuts $11 billion in behavioral health funding
The Trump administration has slashed billions of dollars in funding for behavioral health programs.
Late in the week of March 24, multiple newsrooms reported on how the administration canceled or revoked more than $11 billion in COVID-era funding grants. These grants were frequently tied to addiction treatment programs, mental health care initiatives and other behavioral health efforts. The federal funding had been scheduled to run through September of this year, according to NPR reporting.
“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,” an HHS spokesperson told NPR.
What those cuts already mean for some states
Some states have already started to feel the impact of those cuts.
In Nevada, terminated grants included community mental health block grants funded through the American Rescue Plan Act, according to The Nevada Independent. The grants were meant to support mental health care for adults with serious mental illness and children with “severe emotional disturbances.”
Cody L. Phinney, administrator of the Nevada Division of Public and Behavioral Health, sent a letter to the state’s agency partners that manage the awards affected by the cuts.
“Please note that all activity on the affected subawards must cease immediately, as these funds will not be available to reimburse any expense that occurred after March 24, 2025,” Phinney wrote.
Nearly 50 people have already lost their jobs because of the cuts, according to the Nevada Independent.
Restructuring of health care agencies
The Trump administration has announced its plans to consolidate the Substance Abuse and Mental Health Services Administration into a new entity dubbed the Administration for a Healthy America (AHA). The change is part of a sweeping restructuring of America’s health care regulatory entities.
Overall, the restructuring will consolidate 28 divisions of HHS into 15.
“Over time, bureaucracies like HHS become wasteful and inefficient even when most of their staff are dedicated and competent civil servants,” HHS Secretary Robert F. Kennedy, Jr., said in an announcement.
An uncertain future for substance use disorder treatment
Skeptics of the restructuring fear the changes – paired with funding cuts – will have an outsized influence on substance use disorder treatment in the U.S.
For instance, SAMHSA would be folded into a newly formed office, where its 700-plus staff members would work alongside personnel from other agencies focused on chemical exposure and occupational injuries.
Sources who spoke to the Associated Press said the change could stall progress on overdose deaths and create confusion around priorities.
“There’s a reason why we have reduced overdose in this country; it’s because SAMHSA has been doing its job so well,” Dr. Ruth Potee, medical director for seven methadone clinics in Massachusetts, told AP. “My jaw drops at this news.”
HHS eliminates thousands of jobs
The HHS shakeup will come with tens of thousands of job cuts. The current 82,000 full-time employees will be reduced to 62,000, according to the Trump administration.
Many other health care-facing agencies will see their workforces contract as well:
– FDA will decrease its workforce by approximately 3,500 full-time employees.
– The CDC will decrease its workforce by approximately 2,400 employees.
– The NIH will decrease its workforce by approximately 1,200 employees.
Kennedy renews public health emergency on opioid crisis
The U.S. Department of Health and Human Services renewed the public health emergency on the country’s opioid crisis on March 18. Doing so will allow “sustained federal coordination efforts” and “preserve key flexibilities” for HHS and its agencies, according to department officials.
“Although overdose deaths are starting to decline, opioid-involved overdoses remain the leading cause of drug-related fatalities,” Secretary Kennedy said in an announcement. “This administration is going to treat this urgent crisis in American health as the national security emergency that it is.”
The previous Trump administration first declared the public health emergency in 2017. It was set to expire on March 21, 2025.
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