How Medicaid Covered Behavioral Health Services in 2022

March 20, 2023 - Medicaid coverage of behavioral health services in 2022 varied across states, but the majority of state Medicaid programs reported covering at least half of all services, according to an issue brief from the Kaiser Family Foundation (KFF).

Nearly 40 percent of nonelderly adult Medicaid beneficiaries had a mental health or substance use disorder (SUD) in 2020. Behavioral health services are not a defined category of Medicaid benefits, but some fall under mandatory benefit categories, like psychiatrist services being covered under the physician services category. Other services may be covered under optional benefit categories.

Medicaid’s Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit provides comprehensive behavioral health services coverage for children, but the benefit does not apply to adults.

KFF surveyed state Medicaid officials to determine which behavioral health benefits are covered for adult beneficiaries in fee-for-service (FFS) programs. Forty-five states, including the District of Columbia, responded to the survey.

Researchers grouped the benefits by service categories: institutional care/intensive, outpatient, SUD, naloxone, crisis, integrated care, and other services. Out of the 55 behavioral health benefits included in the survey, the median number of covered services was 44. All but one state, South Carolina, covered at least half of all services.

Six states reported coverage for more than 90 percent of all services. These states also covered 100 percent of services in multiple categories.

Medicaid expansion has likely contributed to the high coverage rates for behavioral health services, researchers said. However, they noted that coverage does not always equal access, as ongoing workforce shortages may hinder accessibility.

Most states reported no copay requirements for behavioral health coverage, but service limits, such as prior authorization requirements, were common.

The brief noted that these findings reflected FFS Medicaid and did not include coverage for managed care organizations (MCOs) or Section 1115 waivers, which may be used to broaden coverage for behavioral health services.

Among state FFS programs, coverage rates were the highest for SUD and outpatient services.

Ten states covered all 17 SUD services and 27 states covered between 76 percent and 99 percent of all SUD services. Within the category, almost all states reported coverage of outpatient SUD treatment, but states were least likely to cover clinically managed high-intensity residential services.

Most states covered medications for SUD treatment, including buprenorphine, methadone, and naltrexone. Around one in four states reported copay requirements for most SUD medications.

All states covered more than half of the 14 outpatient services, with 14 states covering all of the services. Outpatient services ranged from psychiatric testing to partial hospitalization services.

Almost all states covered evaluation and testing services and individual, family, and group therapy. Meanwhile, there was more variation in coverage of activities of daily living (ADL)/skills training, day treatment, and case management services. States were most likely to report copays for therapy and service limits for case management.

Coverage rates were the lowest for crisis services, which provide specialized responses to beneficiaries experiencing behavioral health emergencies. Twenty-one states covered less than half of the five crisis services in the survey. Several states didn’t cover any of the services, while four states covered all of the services.

The most frequently covered service in this category was mobile crisis services, which may be tied to the provision under the American Rescue Plan Act that provides enhanced funding for states to provide community-based mobile crisis intervention services.

Thirty-seven states reported covering at least half of the four institutional care/intensive services, which are reserved for situations like behavioral health emergencies or long-term treatment. Only three states covered less than half of the eight integrated care services, which included mental health screening in primary care settings and psychiatric evaluation with medical services.

Researchers project that states will continue expanding Medicaid behavioral health benefits and implement additional policies to boost access to behavioral healthcare, such as addressing the workforce shortage and solidifying telehealth policies.