State Medicaid programs across the nation will continue to make behavioral health a strategic priority in 2025.
A new survey report released by the Kaiser Family Foundation (KFF) found that half the state leaders of the joint federal-state health plan for the vulnerable want to expand the continuum of behavioral health services in their states, come up with new reimbursement models, or better integrate behavioral and physical health services, for example.
The focus on behavioral health comes as Medicaid leaders continue to address program and member challenges.
“Consistent with state-identified behavioral health priorities, a number of states reported behavioral health challenges including increased demand for services, workforce shortages, lack of access to services, gaps in the service continuum (especially for children and youth), challenges related to integrating physical health and behavioral health, and complexity of aligning available behavioral health funding sources,” the report stated.
Generally, the survey found that 21 states made improvements to “Mental Health and Substance Use Disorder (SUD) Services,” while the same number intend to do so in 2025. Some states fall into both categories.
It also found that most states have or will in the future increase behavioral health reimbursement: 34 states already increased outpatient mental health services in 2024, and 26 have adopted increases for 2025.
In small part, this is being seen in the autism therapy industry. On top of the slight rise, leaders in the space said during Behavioral Health Business’ Autism & Addiction Treatment Forum that regulators are more aware of and more attuned to the conversations advocates want to have on the issue.
These increases come in the context of several competing priorities and challenges, the report highlighted. The federal government has ended increased matching Medicaid funds used to support and encourage states to get and keep people on Medicaid during the pandemic. All but four states have completed so-called unwinding processes when it comes to program eligibility by August 2024. The survey was conducted over the summer, KFF’s report noted.
Without that added funding, state Medicaid directors said state programs might be vulnerable to changes in economic conditions and state budgeting functions in a way they weren’t during the pandemic, when the federal government was doling out more cash for expanded Medicaid coverage. Already, poor investment from states and their managed care organization (MCO) partners makes it very difficult to access psychiatric services, for example.
Plus, with less generous qualifications, fewer people are being covered by the program and may not find health plan coverage elsewhere. As of June 2024, the latest data available, overall Medicaid enrollment was down about 14% from a year ago. Medicaid directors reported that they expected enrollment declines of 4.4% in 2025.
Medicaid redeterminations have impacted Universal Health Services (NYSE: UHS), one of the larger psychiatric hospital operators in the country, in terms of financial performance. Early in the year, the company reported lower behavioral health patient days than expected, in part due to redeterminations.
Other than increasing reimbursement, states have largely focused benefits improvements on expanding access to crisis services to complement state’s efforts in implementing and improving access to the 988 Suicide and Crisis Lifeline. Seven states enhanced mobile crisis response in 2024. Three states added or expanded crisis services for youth.
Contingency management continues to work into Medicaid programs. It is the practice of giving some valuable incentive, in some cases cash, for behaviors that lead to recovery. This specific practice is rarely used. Only four states have implemented it or have clearance from the federal government to add it as a benefit. In 2024, Delaware received such clearance. Hawaii, Michigan, Rhode Island and West Virginia have requests pending with federal regulators.
More activity in recent months on this front is seen in the tech- and tech-enable space. Virtual addiction treatment provider Pelago announced the development of a contingency management program. Another virtual addiction treatment provider, PursueCare, announced it raised $20 million and acquired the software of now-defunct startup Pear Therapeutics in December 2023. That helped place contingency management at the core of the business.
Nine states have taken actions that better integrate behavioral health with physical health care: four added benefits that enable the Collaborative Care Model (CoCM) while five have added interprofessional consultation code reimbursement for behavioral health services.
KFF and Health Management Associates (HMA) conducted the survey in collaboration with the National Association of Medicaid Directors (NAMD).
The post Most State Medicaid Programs Will Continue to Make Behavioral Health a Strategic Priority appeared first on Behavioral Health Business.