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CMS Proposes 2.4% Hike & Explores Star Ratings, Electronic Patient Assessments in FY 2026 IPF PPS Rule

The Centers for Medicare & Medicaid Services (CMS) recommended a host of payment and quality program changes for fiscal year (FY) 2026 in the proposed inpatient psychiatric facility prospective payment system (IPF PPS) rule the agency released on Friday, April 11.
 
As NABH reported to members in an alert late Friday, the proposed rule recommends increasing FY 2026 rates for inpatient psychiatric hospitals and units by 2.4% ($70 million), relative to FY 2025 levels, which accounts for a 3.2% market basket update that would be offset by 0.8 percentage point productivity adjustment.

Proposed Payment Changes
This annual IPF PPS update also proposes changes to other PPS components, including:

  • Outliers: To maintain the outlier pool at the current level of 2.0% of total payments, CMS proposes increasing the high-cost threshold from $38,110 to $39,360. This change will slightly reduce the number of IPF claims that qualify for an outlier payment.
  • Labor Costs: The labor-related share would slightly increase from 78.8% t to 78.9%, which indicates a slight rise in labor costs, relative to all other costs.

Facility-based adjustments: Medicare payments for IPF patients factor in multiple facility-level characteristics including local wages, rural status, teaching hospital status, the presence of a qualifying emergency department. This rule proposes two budget-neutral changes to current facility level adjustments:
 
Rural: Based on its analyses of more recent Medicare claims and cost reports from 2020 through FY 2022, the agency promises to increase the rural adjustment to 18%. This increase from the current 17% adjustment, which has been in effect since this PPS was established, recognizes an 18% differential in per diem costs, relative to non-rural IPFs. This budget neutral change would be implemented by using funds that are otherwise used for IPF PPS payments.
 
Teaching: For FY 2026, CMS proposes to increase the teaching adjustment from 0.5150 to 0.7981, to account for the estimated higher indirect operating costs. This proposal also is based on analyses of the new cost data from FY 2020 through FY 2022. Similarly, this change would be implemented in a budget-neutral manner.
 
Finally, we note that for other hospital proposed rules for FY 2026 CMS issued on April 11, the proposed annual updates were generally in line with the proposed IPF PPS update, with a 2.4% update proposed for general acute-care hospitals and 2.6% proposed for long-term care hospitals. This range of proposed updates stands in stark contrast to the 5 percentage-point increase for 2026 that CMS recently finalized for Medicare Advantage plans— a disparity that we will stress in our comments to CMS.

Proposed Quality Reporting Changes
While the NABH Quality Committee will help develop our comments on the quality-measurement proposals in the rule, NABH urges all its members to contact CMS and explain  how these changes would affect patient care and your organization’s overall operations.
 
Proposed Quality Measure Removal
The agency proposes removing these four quality measures, which are currently set to affect FY 2026 payments:

  • Facility Commitment to Health Equity,
  • Covid–19 Vaccination Coverage among Health Care Personnel,
  • Screening for Social Drivers of Health, and
  • Screen Positive Rate for Social Drivers of Health.

As part of its rationale for these proposed removals, CMS noted the costs associated with achieving a high score outweigh their benefit especially because these “structural measures” do not directly measure clinical outcomes. Further, the rule cites as a benefit the associated reduction in annual costs per IPF for implementing these measures.
 
Proposed New Measures
CMS seeks guidance from stakeholders on how to design these new measures:

  • Nutrition: CMS asks how to consider assessing individual nutritional status using various strategies, guidelines, and practices designed to promote healthy eating habits and ensure individuals receive the necessary nutrients for maintaining health, growth, and overall well-being. This also includes aspects of health that support or mediate nutritional status, such as physical activity and sleep. In this context, preventable care plays a vital role by proactively addressing factors that may lead to poor nutritional status or related health issues.
  • Wellbeing: CMS requests comments about designing a well-being measure that reflects a comprehensive approach to disease prevention and health promotion, as it integrates mental, social, and physical health while emphasizing preventive care to proactively address potential health issues. The agency specifically requests tools and measures that assess overall health, happiness, and satisfaction in life that could include aspects of emotional well-being, social connections, purpose, fulfillment, and self-care work.

Proposed Measure Modification
To facilitate using their data in a complementary manner, CMS proposes to align the timeframes for two IPF quality measures: the Emergency Department (ED) Visit measure and the Unplanned Readmission measure. To do so, the IPF ED Visit timeframe will be expanded from a 1-year to 2-year reporting period, which matches the timeframe for this readmission measure. This change would take effect for the third quarter of 2025 through the second quarter of 2027, with the data to begin affecting payment in FY 2029.
 
Possible Future Use of Star Ratings
Currently, CMS publishes quality data online at www.medicare.gov/care-compare with provider-specific data for some IPFs available within the “hospitals” category.  Also, beginning earlier this year, CMS provided to each IPF and the public an organization-specific report of the quality data CMS has submitted to the Hospital Quality Reporting system.
 
The Consolidated Appropriate Act of 2023 requires HHS to make additional IPF quality program data available to the public. To satisfy this new mandate, this rule raises for future consideration the possibility of using “star ratings” for IPFs, as it currently does for other hospitals and providers.
 
Star ratings are composite measures on provider performance that are intended to help patients and caregivers understand a provider’s quality of care and to compare quality differences across providers. Historically, providers have engaged in extensive policy work with CMS to improve star ratings’ relevance to patients and caregivers, with some concerns still unaddressed by the agency.
 
This rule seeks feedback on the future of developing a five-star methodology for IPFs that  would encourage continuous quality improvement. CMS intends to design this methodology based on information from IPFs, patient groups, and other stakeholders, while currently seeking input on these points:

  • Criteria for measure selection,
  • Possible use of measures in the current IPF quality reporting program, and
  • Future use of additional data for an IPF Star Rating System.

Details questions in these three categories are listed in Appendix A listed below.

Electronic Data Collection of Patient Assessment Information
Congress requires CMS to collect certain standardized patient assessment data using a standardized patient assessment instrument (PAI) in FY 2028 and each subsequent rate year[1]. More specifically, the PAI must collect at patient admission and discharge these categories of data: functional status; cognitive function and mental status; special services, treatments, and interventions; medical conditions and comorbidities; impairments; and other categories as determined appropriate by the HHS secretary. In addition, Congress requires that these data be used to compare IPFs.
 
To help develop a plan to implement this mandate, CMS has been collecting information from the field, including cautions from NABH and the Medicare Payment Advisory Commission last year that urged CMS to use PAI measures that are tested and validated specifically in IPFs, directly pertain to patient care, and are confirmed as statistically reliable.[2]  To continue developing its IPF PAI design and implementation plan, this rule presents a lengthy list of questions, provided below as Appendix B, which are intended to assess the ability of the IPF field to implement a PAI using interoperable health information technology. In our comments, NABH will emphasize current real-world limitations of the overall field’s HIT capacity. Our comments will require substantial, specific information from our members related to CMS’ extensive list of questions to influence regulators.
 
Additional Request for Information
 
Reducing Administrative Burden
Aligning with a January 2025 White House Executive Order that calls for eliminating at least 10 existing regulations to offset any new regulation that increases net costs, CMS is seeking public comment on approaches and opportunities to streamline regulations and reduce administrative burdens. CMS directs feedback on this issue to its separately posted request for information.  Specifically, questions posted in the detailed RFI fall into these categories:

  • Streamline Regulatory Requirements
  • Opportunities to Reduce Administrative Burden of Reporting and Documentation
  • Identification of Duplicative Requirements

Please see the agency’s fact sheet for more information.
NABH will submit comments on this rule by the June 10 deadline.

[1] Required by Section 4125 of the Consolidated Appropriations Act of 2023, which was enacted in Dec. 2022.
[2] See CEO Update, 5-31-24, and pages 6-8 of the May 2024 letter from the Medicare Payment Advisory Commission to CMS.

APPENDIX A
CMS Request for Information On the
Possible Future Use of Star Ratings for IPFs

CMS invites public comment on the following star rating topics.
 
Criteria for measure selection

  1. Are there specific criteria CMS should use to select measures for an IPF star rating system, such as a measure’s generalizability (degree to which a measure is applicable to a broad segment of patients)?
  2. Should an IPF star rating system be limited to or more heavily weight certain types of measures (for example, outcome measures, process measures, structural measures; measures that address certain topics, such as safety, psychiatric treatment, substance use treatment, whole person care, or patient experience)?

Suitability of measures currently in the IPFQR Program

  1. From the perspective of patients and families or other caregivers, which measures currently adopted for the IPFQR Program are most important when attempting to summarize quality of care in IPFs? Which are least important? Are there any measures in the program that should be specifically excluded or included in IPF Star Ratings? For the list of IPFQR Program measures, we refer the reader to Table 5 in section IV.F. in this proposed rule.
  2. From the perspective of referring providers, payers, or other interested parties, which measures currently adopted for the IPFQR Program are most important when attempting to summarize quality of care in IPFs? Which are least important? Are there any measures in the program that should be specifically excluded or included in an IPF star ratings system?
  3. Two measures currently in the IPFQR Program—Hours of Physical Restraint Use
    (HBIPS-2) and Hours of Seclusion (HBIPS-3)—are calculated and publicly reported as a rate per 1000 hours of patient care. Does the way these measures are currently specified and displayed create challenges for including these measures in a star rating calculation? If these measures were selected to be included in a star rating calculation, are there recommendations about how these measures should be included in a larger star rating methodology? For example, should the rate be made into a categorical variable (for example, quartiles)?

Future use of additional data for an IPF Star Rating System

  1. In the FY 2024 IPF PPS final rule (88 FR 51128), we finalized the Psychiatric Inpatient Experience (PIX) survey as a measure of patient experience in IPFs. The PIX survey will become mandatory for the FY 2028 payment determination—that is, data collection occurring in CY 2026. Although PIX data may not be available for an initial version of an IPF star rating system, what considerations should CMS give these data, when they become available? For example, should they be included as part of an overall star rating, or used to derive a standalone patient experience star rating? See for example the Hospital patient experience star rating, which is derived from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS©) survey and displayed as “Patient survey rating” on the Compare tool.
  2. Are there other measurement topics that are currently not addressed by an IPFQR Program measure, but would be valuable in an IPF star rating? We intend to use this input to inform our future star rating development efforts. We intend to consider how a rating system would determine an IPF’s star rating, the methods used for such calculations, and an anticipated timeline for implementation. We will consider comments in response to this RFI for future rulemaking.

APPENDIX B
CMS Request for Information On
IPF Patient Assessment Instruments (PAI) Design and Implementaiton

CMS invites public comment on the following PAI topics.

  • Please note whether your IPF is a unit or a freestanding hospital. In addition, for all of your responses below, please specify whether and how your organization’s status as a unit or freestanding hospital affects your response.
  • To what extent does your facility use health IT systems to maintain and exchange patient records?
  • If your facility has transitioned to using electronic records in whole or in part, what types of health IT does your IPF use to maintain patient records?
    • Are these health IT systems certified under the Office of the National Coordinator for Health Information Technology (ONC) health IT certification program?
    • Does your facility use EHRs or other health IT products or systems that are not certified under the ONC Health IT Certification Program? If so, do these systems exchange data using standards and implementation specifications adopted by HHS?
    • Please specify.
  • Does your IPF submit patient data to CMS directly from your health IT system, without the assistance of a third-party intermediary? If a third-party intermediary is used to report data, what type of intermediary service is used? How does your facility currently exchange health information with other healthcare providers or systems, specifically between IPFs and other provider types, or with public health agencies? What challenges do you face with the electronic exchange of health information?
    • Are there any challenges with your current electronic devices (for example, tablets, smartphones, computers) that hinder your ability to easily exchange information across health IT systems?
    • Please describe any specific issues you encounter.
  • Does limited internet or lack of internet connectivity impact your ability to exchange data with other healthcare providers, including community-based care services, or your ability to submit patient data to CMS?
  • What steps does your IPF take to ensure compliance in using health IT with security and patient privacy requirements such as the requirements of the regulations promulgated under the Health Insurance Portability and Accountability Act (HIPAA) and related regulations?
  • Does your IPF refer to the SAFER Guides (see newly revised versions published in January 2025 at https://www.healthit.gov/topic/safety/safer-guides) to self-assess EHR safety practices?
  • Quality Data Submission. What challenges or barriers does your IPF encounter when submitting quality measure data to CMS as part of the IPFQR Program? Please identify any factors that hinder successful data submission. What opportunities or factors could improve your facility’s successful data submission to CMS?
  • What types of technical assistance, guidance, workforce training resources, and other resources would help IPFs to successfully implement the Fast Healthcare Interoperability Resources®[1] (FHIR®) standard for electronic exchange of patient assessment data.
  • What strategies can CMS, HHS or other Federal partners take to ensure that technical assistance is both comprehensive and user-friendly?
  • Is your facility using technology that utilizes application programming interfaces (API) based on the FHIR standard to enable electronic data sharing? If so, with whom are you sharing data using the FHIR standard and for what purpose(s)? For example, have you used FHIR APIs to share data with public health agencies? Does your facility use any Substitutable Medical Applications and Reusable Technologies (SMART) on FHIR applications? If so, are the SMART on FHIR applications integrated with your EHR or other health IT?
  • What benefits or challenges have you experienced with implementing technology that uses FHIR-based APIs? How does adopting technology that uses FHIR-based APIs to facilitate the reporting of patient assessment data impact provider workflows? What impact, if any, does adopting this technology have on quality of care?
  • Does your facility have any experience using technology that shares electronic health information using one or more versions of the United States Core Data for Interoperability (USCDI) standard? Note the Department of Health and Human Services currently underway policy development project to develop USCDI standards for behavioral healthcare.
  • Call for Volunteers. Would your IPF and/or vendors be interested in participating in testing to explore options for transmission of assessments, for example, testing methods to transmit assessments that incorporate FHIR-enabled data to CMS?
  • What other information should we consider, to facilitate successful adoption and integration of FHIR-based technologies and standardized data for a patient ssessment instruments like the IPF-PAI?
    • We invite any feedback, suggestions, best practices, or success stories related to the implementation of these technologies.

[1]FHIR is a widely adopted standard for exchanging healthcare data electronically, facilitating interoperability between different systems. Developed by HL7, FHIR uses a RESTful API based on web standards like JSON, XML, and RDF.  

Medicaid Policy Proposals May Disrupt Behavioral Healthcare Access

Background

Behavioral health conditions such as major depressive disorder, schizophrenia, and opioid use disorder are highly prevalent among Medicaid beneficiaries; in 2020, almost 40% of nonelderly adult beneficiaries had a mental or substance use disorder.[1] These individuals depend on the wide range of behavioral health benefits in Medicaid programs, including clinical services across the continuum of care, prescription drugs, and recovery support services. Medicaid is also the single largest payer for behavioral healthcare services in the United States and is an essential revenue source for behavioral healthcare organizations such as outpatient clinics, inpatient and residential facilities, and Opioid Treatment Programs (OTPs).[2]

Several policy proposals have been made to lower federal financial participation (FFP) in Medicaid, such as changing the current formula for Federal Medical Assistance Percentages, instituting caps to FFP at the state- or enrollee-levels (such as by transitioning Medicaid to a block grant), or limiting the existing safe harbor preventing a portion of state taxes on providers’ net patient revenue from being considered when calculating FFP.[3] Additionally, proposals have been made to institute work requirements for Medicaid beneficiaries.[4]

Medicaid Financing Proposals Could Exacerbate Existing Challenges

Reductions in FFP could prompt states to make harmful changes to their Medicaid programs to offset reduced revenue, such as:

  • Decreasing provider payments.
  • Restricting benefits, particularly optional benefits such as prescription drugs and home- and community-based services.
  • Limiting eligibility, such as for the Medicaid expansion population.

These changes could make it much more difficult for people with behavioral health conditions to access needed care. Despite Medicaid being the nation’s largest payer of behavioral healthcare services, there is still significant unmet need for care[5]; each year, millions of people with behavioral health conditions do not receive any treatment.[6] This gap in treatment is largely attributable to a pervasive misalignment between payment for and coverage of behavioral healthcare services, and the positive impact these services have on people and communities.

Existing insurance payment rates for behavioral healthcare services are inadequate, and reductions would worsen this problem. Substantial disparities exist between behavioral healthcare providers and the rest of the healthcare system: an analysis found that, compared with psychiatrists and psychologists, benchmarked commercial insurance reimbursement for office visits with specialist medical/surgical physicians was 25% and 29% higher, respectively.[7]

Meanwhile, Medicaid payment is typically much lower than other insurance programs, with average Medicaid reimbursement for physician office visits being 38% less than employer-sponsored insurance and 26% less than Medicare.[8] Another study found that psychiatrists were reimbursed by Medicaid fee-for-service 19% less on average than by Medicare.[9] Further, Medicaid rates do not necessarily cover provider costs; in 2018, Medicaid payments for community hospital services amounted to only 89% of the cost to deliver those services.[10]

Therefore, reduced payment may further disincentivize behavioral healthcare providers’ participation in Medicaid, exacerbating current issues with inadequate insurance networks of behavioral healthcare providers. For example, a secret shopper survey in New York found that only 14% of calls made to mental healthcare providers listed as in-network by health plans led to an appointment being offered.[11] Another analysis found that over half of mental healthcare providers in Oregon Medicaid managed care plan directories did not see Medicaid beneficiaries in 2018.[12] This reflects the current state of low in-network use of behavioral healthcare services. In 2021, commercially insured patients had out-of-network office visits with psychiatrists 8.9 times more and with psychologists 10.6 times more than with medical/surgical specialists.7

Restricting benefits may also lead to greater out-of-network use, as many important behavioral healthcare services are not mandatory benefits in Medicaid, including residential and inpatient behavioral healthcare, most psychiatric medications, targeted case management, and various other clinical services.[13]

Accordingly, each of the Medicaid policy changes could result in individuals incurring greater out-of-pocket expenses, which, according to the Congressional Budget Office (CBO), could “possibly [lead] to a significant increase in medical debt and bankruptcies.”[14] Otherwise, more individuals could delay or forgo care due to unaffordability, which could result in worsened symptoms that necessitate more intensive care than if treated earlier.

These risks are magnified for Medicaid beneficiaries who lose coverage, as a portion of them may be unable to enroll in other plans (e.g., employer-sponsored, Marketplace). If FFP caps are implemented, CBO and Joint Committee on Taxation staff estimate that about 65% of people who lose Medicaid coverage would become uninsured.[15]

Work Requirements Must Include Behavioral Health Exceptions

Beyond financing, other proposals have been made to implement work requirements for Medicaid beneficiaries (also called “community engagement requirements”), whereby adults’ Medicaid eligibility is conditioned on continued participation in work or other qualifying activities (e.g., educational activities, volunteer programs).4 If pursued, work requirements must incorporate sufficient exceptions to ensure that individuals whose mental or substance use disorders prevent them from satisfying the requirements remain eligible for Medicaid enrollment and are not terminated.

These exceptions should reflect the enormous challenges that people with behavioral health conditions face, many of whom need treatment but cannot access it. Therefore, exceptions should not be limited to people actively enrolled in treatment. Additionally, while some people with behavioral health conditions may qualify for a disability exception, these determinations are often complex and do not capture everyone with significant impairment, so relying on disability exceptions alone risks people who cannot work because of their condition losing coverage. Further, some people with behavioral health conditions experience diminished mental capacity that interferes with their ability to complete administrative processes such as verifying exception eligibility or work requirement compliance, so processes must be designed to accommodate these circumstances. Finally, some people who are not working due to their behavioral health condition may be able to obtain employment if they receive appropriate treatment and recovery supports, so continued Medicaid coverage could actually help facilitate people getting employed.

Importance of Medicaid for the Behavioral Healthcare System

With Medicaid beneficiaries having a disproportionately high prevalence of behavioral health conditions,[16] Medicaid is critical to the delivery of services that people with mental and substance use disorders rely upon to treat their conditions. Therefore, the proposed Medicaid policy changes pose significant risks to behavioral healthcare organizations, which already are stretched thin by low reimbursement and uncompensated care amounting to billions of dollars per year.[17] These changes could necessitate cuts to service availability, leading to decreased access for patients amidst unprecedented need for services.

For OTPs, Medicaid funding enables them to be at the front line of the national response to the overdose crisis. OTPs deliver evidence-based treatment that promotes long-term recovery from opioid use disorder and prevents overdose deaths, and their efforts have transformed the lives of countless Medicaid beneficiaries, especially considering that Medicaid beneficiaries have an overdose death rate that is twice as high as the overall rate in the United States.[18] With 86% percent of OTPs accepting Medicaid in 2023[19] – more than any other insurance type – less funding from Medicaid could threaten the sustainability of OTPs and undermine the recent progress made to reduce overdose deaths.

Beyond the essential care that behavioral healthcare organizations provide, these facilities also have tremendous positive impacts on the economy. For example, one study found that the national economic impact of inpatient psychiatric facilities is nearly three times higher than expenditures, and these facilities alone create almost half a million jobs.[20] If Medicaid expenditures are reduced, we could expect even greater decreases in economic output attributable to behavioral healthcare facilities.

Recommended Actions

The 119th Congress and Trump administration have several major opportunities to reduce burden on behavioral healthcare organizations and better support them as they work to combat the nation’s behavioral health crisis. With respect to Medicaid, NABH recommends the following immediate actions to expand access to treatment:

  • Eliminate the Institution for Mental Diseases exclusion, which blocks access to treatment for millions of Americans with severe mental and substance use disorders.
  • Align mental health parity requirements for Medicaid managed care plans with the recent final rule for commercial markets, which was a major step forward in expanding access to care.
  • Promote adequate Medicaid reimbursement of behavioral healthcare services to match the cost of delivering those services and the value they provide to patients.

Conclusion

For too long, payment and coverage inadequacy has inhibited the availability of behavioral healthcare services. Proposed changes to Medicaid financing and eligibility could have devastating impacts on Medicaid beneficiaries’ access to behavioral healthcare and the organizations that deliver these services. Congress and the Trump administration should undertake policy efforts that promote access to care for the millions of Americans with mental and substance use disorders.

References


[1] Guth M, Saunders H, Corallo B, Moreno S. Medicaid coverage of behavioral health services in 2022: findings from a survey of state Medicaid programs [Internet]. Kaiser Family Foundation; 2023 Mar 17 [cited 2025 Jan 17]. Available from: https://www.kff.org/mental-health/issue-brief/medicaid-coverage-of-behavioral-health-services-in-2022-findings-from-a-survey-of-state-medicaid-programs

[2] Medicaid and CHIP Payment and Access Commission. Behavioral health [Internet]. Medicaid and CHIP Payment and Access Commission; [cited 2025 Jan 17]. Available from: https://www.macpac.gov/topic/behavioral-health

[3] Congressional Budget Office. Options for reducing the deficit: 2025 to 2034 [Internet]. Congressional Budget Office; 2024 Dec [cited 2025 Jan 17]. Available from: https://www.cbo.gov/system/files/2024-12/60557-budget-options.pdf

[4] Limit, Save, Grow Act of 2023, H.R. 2811, 118th Cong., 1st Sess. (2023). Available from: https://www.congress.gov/bill/118th-congress/house-bill/2811

[5] Meiselbach MK, Ettman CK, Shen K, Castrucci BC, Galea S. Unmet need for mental health care is common across insurance market segments in the United States. Health Aff Sch. 2024 Mar 8;2(3):qxae032. doi: 10.1093/haschl/qxae032. PMID: 38756925; PMCID: PMC10986235. Available from: https://pmc.ncbi.nlm.nih.gov/articles/PMC10986235

[6] Substance Abuse and Mental Health Services Administration. 2023 NSDUH Detailed Tables [Internet]. Substance Abuse and Mental Health Services Administration; 2024 Jul 30 [cited 2025 Jan 17]. Available from: https://www.samhsa.gov/data/report/2023-nsduh-detailed-tables

[7] Mark TL, Parrish W. Behavioral health parity – pervasive disparities in access to in-network care continue [Internet]. RTI International; 2024 Apr 17 [cited 2025 Jan 17]. Available from: https://dpjh8al9zd3a4.cloudfront.net/publication/behavioral-health-parity-pervasive-disparities-access-network-care-continue/fulltext.pdf

[8] Biener AI, Selden TM. Public and private payments for physician office visits. Health Aff. 2017 Dec;36(12):2160-2164. doi: 10.1377/hlthaff.2017.0749. PMID: 29200346. Available from: https://www.healthaffairs.org/doi/10.1377/hlthaff.2017.0749

[9] Zhu JM, Renfro S, Watson K, Deshmukh A, McConnell KJ. Medicaid reimbursement for psychiatric services: comparisons across states and with Medicare. Health Aff. 2023 Apr;42(4):556-565. doi: 10.1377/hlthaff.2022.00805. PMID: 37011308; PMCID: PMC10125036. Available from: https://pmc.ncbi.nlm.nih.gov/articles/PMC10125036

[10] Appendix 1: supplementary data tables. Trends in the overall health care market [Internet]. American Hospital Association; [cited 2025 Jan 17]. Available from: https://www.aha.org/system/files/media/file/2020/10/TrendwatchChartbook-2020-Appendix.pdf

[11] Office of the New York State Attorney General. Inaccurate and inadequate: health plans’ mental health provider network directories [Internet]. Office of the New York State Attorney General; 2023 Dec 7 [cited 2025 Jan 17]. Available from: https://ag.ny.gov/sites/default/files/reports/mental-health-report_0.pdf

[12] Zhu JM, Charlesworth CJ, Polsky D, McConnell KJ. Phantom networks: discrepancies between reported and realized mental health care access in Oregon Medicaid. Health Aff. 2022 Jul;41(7):1013-1022. doi: 10.1377/hlthaff.2022.00052. PMID: 35787079; PMCID: PMC9876384. Available from: https://www.healthaffairs.org/doi/10.1377/hlthaff.2022.00052

[13] Medicaid and CHIP Payment and Access Commission. Behavioral health services covered under state plan authority [Internet]. Medicaid and CHIP Payment and Access Commission; 2021 Jan 11 [cited 2025 Jan 17]. Available from: https://www.macpac.gov/subtopic/behavioral-health-services-covered-under-state-plan-authority

[14] Congressional Budget Office. Options for reducing the deficit: 2023 to 2032 [Internet]. Congressional Budget Office; 2022 Dec [cited 2025 Jan 17]. Available from: https://www.cbo.gov/system/files/2022-12/58164-budget-options-large-effects.pdf

[15] Congressional Budget Office. Establish caps on federal spending for Medicaid [Internet]. Congressional Budget Office; 2022 Dec 7 [cited 2025 Jan 17]. Available from: https://www.cbo.gov/budget-options/58622

[16] Saunders S, Rudowitz R. Demographics and health insurance coverage of nonelderly adults with mental illness and substance use disorders in 2020 [Internet]. Kaiser Family Foundation; 2022 Jun 6 [cited 2025 Jan 17]. Available from: https://www.kff.org/mental-health/issue-brief/demographics-and-health-insurance-coverage-of-nonelderly-adults-with-mental-illness-and-substance-use-disorders-in-2020

[17] Government Accountability Office. States’ use and distribution of supplemental payments to hospitals [Internet]. Government Accountability Office; 2019 Jul [cited 2025 Jan 17]. Available from: https://www.gao.gov/assets/gao-19-603.pdf

[18] Mark TL, Huber BD. Drug Overdose Deaths Among Medicaid Beneficiaries. JAMA Health Forum. 2024 Dec 6;5(12):e244365. doi: 10.1001/jamahealthforum.2024.4365. PMID: 39641942; PMCID: PMC11624576. Available from: https://pmc.ncbi.nlm.nih.gov/articles/PMC11624576/

[19] Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. National Substance Use and Mental Health Services Survey (N-SUMHSS), 2023: annual detailed tables [Internet]. Substance Abuse and Mental Health Services Administration; 2024 [cited 2025 Jan 17]. Available from: https://www.samhsa.gov/data/sites/default/files/reports/rpt53013/NSUMHSS-Annual-Detailed-Tables-23.pdf

[20] Dobson A, DaVanzo JE, Heath S, Berger G, El-Gamil A. The economic impact of inpatient psychiatric facilities: a national and state-level analysis. National Association for Behavioral Healthcare; 2010 Feb 19 [cited 2025 Jan 17]. Available from: https://www.nabh.org/wp-content/uploads/2018/06/NAPHS-Final-Report-2-19-10.2.pdf

President Biden’s 2023 Budget Seeks to Transform U.S. Behavioral Healthcare Delivery

[vc_row][vc_column][vc_column_text]President Biden is proposing new, mandatory investments totaling $51.7 billion over 10 years to enhance behavioral healthcare in America in the fiscal year (FY) 2023 budget proposal he released Monday. Among the budget blueprint’s most notable behavioral health provisions is the president’s request of $697 million for the Substance Abuse and Mental Health Services Administration (SAMHSA) to ensure that 100% of contacts are answered for the new 988 behavioral health crisis hotline that will begin to operate in July. This is an increase of $590 million from what was enacted for fiscal year 2022. Another significant provision is the president’s proposal for a new, $7.5 billion Mental Health System Transformation Fund through Medicaid to increase access to mental health services through workforce development and service expansion, including the development of non-traditional health delivery sites, the integration of quality mental health and substance use care into primary care settings, and the dissemination of evidence-based practices. President Biden’s budget also provides an investment of $397 million for the Health Resources and Services Administration’s (HRSA) Behavioral Health Workforce Development Programs, which is $235 million above FY 2022 enacted level. This funding is intended to increase training of new behavioral healthcare providers, including a track for health support workers such as peers and community health workers. The program also places an emphasis on team-based care. This investment is meant to promote inclusive and equitable behavioral healthcare for youth and focus on the knowledge and understanding of children, adolescents, and youth at risk for a mental health disorder, serious emotional disturbance, or substance use disorder (SUD). The budget also includes increases in primary care training and enhancement and nurse education, practice, and retention to expand behavioral health services into primary care. The FY 2023 budget provides $4.6 billion for SAMHSA’s mental health activities, an increase of $2.5 billion above the FY 2022 enacted level. These investments would provide a historic investment in the Behavior Health Crisis Services; expand access to crisis services; ensure access to early intervention and prevention services to the nation’s vulnerable populations; and invest in children’s mental health. NABH is pleased to see President Biden’s budget calls for improving compliance with behavioral health parity standards by requiring plans and issuers to use medical necessity criteria for behavioral health services that are consistent with the criteria developed by not-for-profit medical specialty associations. The proposal would also place limits on the consideration of profit in determinations of medical necessity. The budget would authorize the secretaries of the U.S. Health and Human Services, Labor, and Treasury Departments to regulate behavioral health network adequacy, and to issue regulations on a standard for parity in reimbursement rates based on the results of comparative analyses submitted by plans and issuers at a cost of $720 million over 10 years. The budget proposes requiring all plans and issuers to cover three behavioral health visits and three primary care visits each year without charging a copayment, co-insurance or deductible-related fee.  And it would provide $125 million in mandatory funding over five years for grants to states to enforce mental health and SUD parity requirements.  Any funds not expended by states at the end of five fiscal years would remain available to the HHS secretary to make additional mental health parity grants. It also proposes to eliminate the ability of self-insured non-federal governmental plans to opt out of parity, affording state and municipal employees the same consumer protections that apply to other employees with private health insurance. In Medicare, the president’s budget would eliminate the 190-day lifetime limit and would require Medicare to cover up to three behavioral health visits per year without cost-sharing. Also related to the Medicare program, current law requires the Centers for Medicare & Medicaid Services (CMS) to terminate psychiatric hospital participation in Medicare after six months of non-compliance with conditions of participation, even if the deficiency does not jeopardize patient health and wellbeing.  This provision does not apply to any other provider category. The president’s proposal would give CMS flexibility to allow a psychiatric hospital to continue receiving Medicare payments when deficiencies are not considered to immediately jeopardize the health and safety of its patients and where the facility is actively working to correct the deficiencies identified in an approved Plan of Correction.  This provision is considered budget-neutral and would not have cost implications. Among other provisions, the White House budget proposal would also establish a Medicare benefit category for licensed professional counselors and marriage and family therapists that authorizes direct billing and payment under Medicare for these practitioners; remove limits on the scope of services for which Medicare can pay clinical social workers, licensed professional counselors, and marriage and family therapists; and allow these practitioners to bill Medicare directly for their mental health services for covered Part A qualifying Skilled Nursing Facility stays. And the proposal would ensure that mental health and SUD benefits under Medicare do not face greater limitations on reimbursement or access to care relative to medical and surgical benefits.  The Medicare Payment Advisory Commission (MedPAC) would be required to issue a report to identify existing gaps in mental health and substance use disorder benefits to be addressed in the Medicare statute. Specifically for SUD, President Biden has proposed $519 million, more than double the 2022 enacted level, for the Family Violence Prevention and Services program. This is the primary federal funding stream dedicated to the support of emergency shelter and related assistance for victims of domestic violence and their children. The funding represents an increase of $292 million over FY 2022 enacted for the base program’s shelters and supportive services. This funding provides services to an estimated 1.3 million children and families to prevent family violence, domestic violence, and dating violence. This includes $250 million in cash assistance for domestic violence survivors and $30 million for the Safe Recovery Together demonstration grants. The demonstration grants will support families affected by domestic violence at the intersection of substance-use coercion, housing instability, and child welfare involvement. President Biden’s FY 2023 budget also proposes:
  • $413 million to SAMHSA in FY 2023, and $4.1 billion over 10 years, for community health centers
  • A $238 million increase above the FY 2022 enacted level in funding for Certified Community Behavioral Health Center Expansion Grants
  • An increase in the amount of Mental Health Block Grant funds reserved for crisis intervention services to 10% from 5%
  • An investment of $11.4 billion, including $10.8 billion in discretionary funding, in programs addressing opioids and overdose-related activities across HHS.
After President Biden kicked off the federal budget process on Monday with his budget proposal, Office of Management and Budget Director Shalanda Young testified Tuesday before the House Budget Committee. Director Young will take more questions from the Senate Budget Committee on Wednesday. Meanwhile, congressional appropriators will begin their work soon, starting with a House Appropriations Committee hearing this Thursday that will feature U.S. Health and Human Services Department (HHS) Secretary Xavier Becerra.[/vc_column_text][/vc_column][/vc_row]

NABH Analysis: CMS Proposes Expanding Medicare Telehealth Benefits and Scope of Practice Changes Beyond Pandemic

CMS Proposes Expanding Medicare Telehealth Benefits and Scope of Practice Changes Beyond Pandemic The Centers for Medicare & Medicaid Services (CMS) is proposing to maintain—either permanently or temporarily— many of the Medicare telehealth benefits and workforce flexibilities authorized during the Covid-19 pandemic, according to the fiscal year 2021 Medicare physician fee schedule proposed rule the agency released Monday. In issuing these proposed changes, CMS referred to President Trump’s Aug. 3 Executive Order on “Improving Rural Health and Telehealth Access” that directs the Health and Human Services secretary to propose regulations to extend flexibilities provided during the Covid-19 public health emergency (PHE) as appropriate. Proposed Extensions of Medicare Coverage of Telehealth On a permanent basis, CMS proposes to continue Medicare coverage for these telehealth services authorized during the PHE:
Home visits for the evaluation and management of an established patient: less complex and last typically 25 minutes,
Certain types of visits for patients with cognitive impairments,
Group psychotherapy,
Neurobehavioral status exams,
Care planning for patients with cognitive impairment,
Less complex domiciliary, rest home, or custodial care services, and
Prolonged evaluation and management (E/M) services.
CMS has requested public feedback on other services to add to this list of permanent Medicare-covered, telehealth services. CMS is also proposing to extend Medicare coverage on a temporary basis for telehealth delivery of the following services until the end of the calendar year when the PHE ends:
Psychological and neuropsychological testing,
Emergency department visits,
Home visits to address moderate to severe issues, typically lasting 60 minutes,
More complex domiciliary, rest home, or custodial care services, and
Nursing facilities discharge day management.
CMS has also requested comments on this list of telehealth services that the agency proposes to cover temporarily in Medicare. CMS said it intends these temporary extensions of coverage to allow time for the agency to consider whether these services should be extended permanently. In the proposed rule, CMS clarified that licensed clinical social workers, clinical psychologists, (as well as physical therapists, occupational therapists, and speech-language pathologists) can furnish the brief online assessment and management services via telehealth as well as virtual check-ins and remote evaluation services. In addition, CMS has clarified that telehealth rules do not apply when the beneficiary and the practitioner are in the same location even if audio/video technology assists in providing a service. CMS has not proposed to continue separate payments for audio-only evaluation and management services beyond the end of the PHE. Instead, the agency has requested comment on whether to develop coding and payment for a service similar to virtual check-in but for a longer unit of time with a higher value. CMS is seeking feedback on duration of services and resources required to furnish this service and also whether Medicare coverage of this audio-only service should be extended temporarily or permanently. Meanwhile, CMS is proposing to allow direct supervision to be provided using real-time, interactive audio and video technology (excluding telephone that does not also include video) through Dec. 31, 2021. The agency is requesting comments on this proposal, including guardrails that should be in place and risks to patient safety and concerns about waste, fraud, and abuse. CMS also included a number of clarifications about Medicare coverage for remote physiologic monitoring codes and new payment rates for immunization administration.

Updates to Evaluation and Management Codes

In this proposed rule, CMS has proposed revaluing a number of code sets that rely on or are analogous to E/M visits including psychiatric diagnostic evaluations and psychotherapy services. CMS has also proposed simplified coding and billing requirements for E/M visits to take effect in January 2021.

Proposed Changes to Scope of Practice Rules and Related Issues

CMS has also proposed changes to allow healthcare professionals to practice up to the top of their professional training and to continue some of the workforce flexibilities allowed during the PHE, including:
Allowing nurse practitioners, clinical nurse specialists, physician assistants, and certified nurse-midwives (instead of only physicians) to supervise others performing diagnostic tests consistent with state law and licensure, providing that they maintain the required relationships with supervising/collaborating physicians as required by state law,
Clarifying that physicians and nonphysician practitioners, including therapists, can review and verify documentation entered into the medical record by members of the medical team for their own services that are paid under the Medicare physician fee schedule,
  • Accordingly, in the inpatient psychiatric facility prospective payment system final rule issued July 31, CMS also confirmed as final, changes to the special conditions of participation rules for psychiatric facilities allowing non-physician practitioners, or advanced practice providers (including physicians assistants, nurse practitioners, psychologists, and clinical nurse specialists) to document progress notes in accordance with state laws and scope-of-practice requirements.
Clarifying that therapy students, and students of other disciplines, working under a physician or practitioner who furnishes and bills directly for their professional services to the Medicare program, may document in the record so long as it is reviewed and verified (signed and dated) by the billing physician, practitioner, or therapist, and
Requesting comment on whether to continue temporarily or permanently Medicare coverage for services of residents that are provided outside of the scope of their approved GME programs and furnished to inpatients of a hospital in which they have their training program as separately billable physicians’ services.
Proposed Changes to Opioid Treatment Program Benefit CMS has proposed making several changes to claiming rules and payment codes for the new Medicare Part B benefit for opioid use disorder services, including medications and services furnished by opioid treatment programs. Of note, add-on codes for nasal naloxone and auto-injector naloxone are proposed along with clarification on periodic assessment add-on code requirements. SUD Screening in Medicare Initial and Wellness Visits CMS is implementing a new requirement that the Medicare Initial Preventive Physical Examination and Annual Wellness Visit include screening of beneficiaries for potential substance use disorders, including a review of any current opioid prescriptions, as well as referral for specialty treatment, as appropriate. This new requirement was enacted in the SUPPORT Act. Electronic Prescribing of Controlled Substances CMS said it is implementing another SUPPORT Act provision that requires prescriptions of Schedule II, III, IV, or V controlled substances for Medicare Part D beneficiaries to be electronic. CMS issued a request for information on July 30 requesting feedback on whether to include exceptions to this requirement and whether CMS should impose penalties. Public comments on this proposed rule are due by Monday, Oct. 5.

NABH Analysis: OTP Provisions in 2020 Physician Fee Schedule

OTP Provisions in 2020 Physician Fee Schedule

CMS finalized provisions for the nation’s opioid treatment programs (OTPs) in the 2020 Physician Fee Schedule regulation that the agency released on Nov. 1. This NABH Analysis provides a summary of those provisions, which provide for the treatment of opioid use disorders (OUDs) with new bundled service codes for OTPs, and for telehealth and opioid use treatment services in office-based settings. The final rule will be published in the Federal Register on Nov. 15. The regulations implement requirements that were included in last year’s Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patient and Communities (SUPPORT) Act. NABH is pleased that the final rule addressed the following issues that NABH mentioned in its comment letter on Sept. 28:
  • CMS raised the non-drug bundle to 161.71, which aligns with NABH’s valuation. We used a building block methodology to demonstrate that the proposed non-drug bundle, based on the CMS PFS rates, was undervalued by 31-48 percent.
  • We also identified a range of indirect and direct services routinely performed by OTPs that CMS included in the final bundle.
  • NABH advocated for the elimination of the partial bundle and recommended a more gradual overall implementation of elements of the proposed rule. In the final rule, CMS temporarily eliminated the partial episode of care with the intent to engage in future rulemaking to more gradually phase in their bundled approach.
  • Comments and data were provided to CMS reflecting potential destabilization of the workforce relevant to the proposed service requirements. CMS addressed these issues through deference to state laws and scopes of service provisions, and a reduction of the number of services needed to bill the bundle.
  • In explanatory text, CMS made note of the NABH recommendation for a rural add-on rate of 17 percent and indicated it may be considered in future rulemaking to incentivize rural care.
  • NABH recommended consideration to permanently set a zero co-pay, and CMS indicated the intent to address the issue in future rulemaking.
  • We advocated to remove OTPs from the high-risk category. CMS finalized a compromise proposal that moves OTPs that have been fully and continuously certified by SAMSA since October 23, 2018 to moderate risk, while maintaining those without full and continuous certification in the high-level risk category, as they are newly-recognized Medicare providers.
  • NABH-supported telehealth codes were finalized.
  Final Rule Highlights: Opioid Treatment Programs
  • Definition of OUD Treatment Services
    • FDA-approved opioid agonist and antagonist treatment medications
    • Dispensing and administering of such medications (if applicable)
    • Substance use counseling
    • Individual and group therapy
    • Toxicology testing (both presumptive and definitive testing)
    • Intake activities
    • Periodic assessments
  • Bundled Rates/Episode of Care
    • Bundles reflect a weekly episode of care with no time limits.
    • Rates are a combination of a drug and non-drug component.
    • Full and partial episode construction was finalized to eliminate of partial episodes of care. Utilization will be monitored, intent is to create a partial bundle in the future.
    • One service must be furnished within a week to bill a weekly drug or non-drug bundle.
  • Drug component reflects drug dispensing/administration services; rates vary according to the specific drug (methadone-oral, buprenorphine-oral, buprenorphine-injection, buprenorphine-implant, naltrexone injection), and includes buprenorphine-only products.
    • Maintenance dosage and calculation for oral buprenorphine was increased from 10 mg to 16 mg daily.
    • Created an NOS code for new medications.
  • Non-drug component includes counseling, psychotherapy, toxicology testing and tracks with SAMHSA certification.
    • Does not require counseling and psychotherapy but defers to medical need and state laws relevant to scopes of practice.
    • Case/care management is not included as a bundled or add-on code. Intent to collaborate with OTPs to better understand services, with potential future rulemaking.
    • Rates were increased using building block methodology that values the services based on established Medicare PFS (non-facility) rates for similar services; the Medicare Clinical Laboratory Fee Schedule (CLFS); and state Medicaid programs.
    • Bundles include payment for presumptive and definitive drug testing, with no separate billing under CLFS. There is no add-on code in order to avoid incentive to test more frequently than needed.
  • Add-ons
    • Intake activities for new patients, including a physical examination
    • Periodic assessments during an episode of care, such as for pregnant or postpartum patients
    • Take homes for methadone/buprenorphine for up to 7 days of medication
    • Counseling 30-minutes when counseling or therapy substantially exceed the amount in the individual treatment plan
PFS Bundles for Office-based Services/Telehealth
  • Bundled Rates/Episode of Care
    • Codes for three new (monthly) OUD treatment bundles have been added to the telehealth list on a Category 1 basis for care coordination, individual and group therapy, and counseling through two-way interactive audio-video communication technology.
      • G2086, 70-minute psychotherapy, first month. Includes treatment planning, care coordination, individual and group psychotherapy and counseling
      • G2087, 60-minute psychotherapy, subsequent months. Includes care coordination individual and group psychotherapy and counseling
      • G2088, for each additional 30-minute service required beyond 120 minutes. Includes care coordination, individual and group psychotherapy, and counseling
    • To bill G2086 and G2087, one psychotherapy services must be furnished.
    • If no therapy is provided, the bundle may not be billed. Instead, existing CPT codes for care management 99484, 99492, 99493, 99494 and E/M codes may be used.
    • Psychotherapy codes 90832, 90834, 90837, 90853 may not be used by the same practitioner for the same beneficiary in same month that episode bundles are billed.
    • Rates do not include medications, as they are reimbursed under Medicare Part B or D or toxicology testing that is billed under CLFS.
    • Provider must be licensed in the jurisdiction/location of the patient.
    • The codes are not restricted to use by addiction specialists.
    • Additional telehealth services may be requested before February 10, 2020 for consideration for the following calendar year.
    • The rule notes the prior removal of geographic limitations for telehealth services for SUD or co-occurring mental health disorders.
    • The SUPPORT ACT permits services to be furnished at any originating site, including the patient’s home, and requires that no originating site facility fee is permitted when the individual’s home is the originating site.
    • OTP services are not considered physician/practitioner services, and as such may not bill these codes. Instead, services are covered through OTP bundled rates.
NABH will closely monitor and work with CMS and other stakeholders in the implementation of this benefit and provide updates to NABH members as necessary. If you have questions, please contact Sarah Wattenberg, NABH’s director of quality and addiction services.