June 24, 2024

Serene Nest

taking care of your health, Our Mission

Doing and Undoing in Mental Health Services

4 min read

As grizzled veterans of the mental health (MH) system, we are acutely aware of the truth in the apocryphal saying: “What the right hand giveth, the left hand taketh away.” In terms of MH services, this sentiment might be reframed as: “Every advance in MH services is counteracted by a retreat somewhere else in the system.” Indeed, despite ample evidence of their efficacy and cost- effectiveness, many promising mental health care policies continue to stagnate—trapped in a political and bureaucratic cycle of doing and undoing.

Something like that is happening now with the recent expansion of Medicare compensation and provider eligibility for MH services, while at the same time, there is an enormous reduction in the number of people eligible for Medicaid coverage. Medicaid is the single largest MH services payer for seriously mentally ill people in the United States.

The Good News

In November 2023, The Centers for Medicare & Medicaid Services (CMS) announced a number of important policy changes with respect to provider eligibility and increased levels of Medicare reimbursement for a number of MH services. Recognizing the dearth of Medicare-qualified MH providers (e.g., only 54.8 percent of psychiatrists accept Medicare, down from 74 percent in 2005-2006, compared with an average of 86.1 percent for other medical specialties), CMS finalized procedures allowing Masters-level marriage and family therapists (MFTs) and mental health counselors (MHCs) to be paid directly for their services. It is estimated that more than 400,000 behavioral health providers are newly eligible to bill CMS for MH services. CMS is also finalizing policies with respect to payment of peer support specialists (e.g., former addicts working in substance abuse treatment programs).

As someone (FWP) who was extensively involved in the evaluation of outpatient child development interventions, postpartum depression treatment, and child and family posttraumatic stress disorder (PTSD) therapies delivered by Masters-degree therapists, I have no doubts that Masters-degree therapists can deliver excellent prevention and treatment services that are efficacious and cost- effective. To ensure success, however, high-quality training and appropriate credentialing must be built into the cost of doing business.

The Bad News

We are now in the middle of the “Great Unwinding” of the Medicaid Continuous Enrollment Provision originally enacted in the context of the COVID-19 pandemic to increase and sustain health insurance coverage, especially important for lower-socioeconomic-status (SES) families. As a result, it is estimated that between 8 and 24 million Americans will lose their Medicaid coverage within a year, as states trim or slash Medicaid eligibility. Texas, for example, is cutting approximately 1.7 million people from its Medicaid rolls.

States vary significantly in how they are approaching their unwinding, so generalizations have limited applicability. As states re-determine Medicaid eligibility, certain groups (e.g., people who recently moved, people with limited English proficiency, people with disabilities, and older adults) will have more difficulties re-establishing their health insurance coverage. Theoretically, some of the individuals dropped from Medicaid could transition to other health insurance options, but the majority will face monumental real-world barriers to replacing their Medicaid benefits. As usual, the people in greatest need will face the greatest obstacles to care.

So, on one hand, we are dramatically increasing the pool of behavioral health providers eligible to deliver mental health services to Medicare recipients. On the other hand, we are drastically reducing the number of people eligible to receive Medicaid-covered mental health services.

And, as always, there are additional “the devil’s in the details” issues that pop up with any bureaucratic policy change. Current Medicare- and Medicaid-accepting MH providers complain about low reimbursement rates and the difficulties documenting and billing for services rendered. Indeed, it is thought that these obstacles are the major reason why so few psychiatrists and clinical psychologists are willing to accept Medicare and Medicaid patients. It remains to be seen whether Masters-level clinicians will be more willing to put up with all the bureaucratic hurdles and accept lower reimbursement rates.

How Is This Going to Turn Out?

It is too early to tell. But we have an important opportunity to track the results of these apparently opposing policies across the “great laboratory of the 50 states.” Different states are going to do different things, and we need to learn from their collective experiences. There are numerous state and national data sets that will capture some of the results, and some states are likely to do much better than others on measures of public mental health. Controlling for the many confounds that may arise, this naturalistic experiment can offer us some useful models for another two steps forward.


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