CMS Expands Coverage of Mental Health Services Under Medicaid

Earlier this week, the Centers for Medicare and Medicaid Services revealed it is giving states the chance to get paid for more mental health services under Medicaid.

In a letter to state Medicaid directors on November 13, the agency said states can pursue reimbursement for short-term residential treatment services in an institution for mental disease.

Through this announcement, CMS aims to assist adults with serious mental illness and children with serious emotional disturbance. These conditions can go untreated for years, and people with SMI or SED are less likely to finish high school and attain higher education, according to an agency news release.

As part of the opportunity, states have to report information and data regarding their performance measures in the effort. CMS won’t approve a project unless it is expected to be budget neutral to the federal government. Additionally, participating states are expected to commit to taking action to improve community-based mental healthcare.

Via email, Chris Molaro, co-founder and CEO of mental health tech startup NeuroFlow, said he sees this Medicaid announcement as good news.

“This move from CMS is a step in the right direction to improve access and provides the resources and infrastructure to effectively care for and treat patients’ mental health,” Molaro said.

He noted that the implications of the decision include improved outcomes for mental health and physical health, as well as potential financial benefits and cost savings.

“It’s moving in the right direction in terms of treating mental health in the same paradigm as physical health,” Molaro noted. “There is still more to do, but in my opinion, this is a very positive iteration.”

CMS also currently offers states the chance to pursue similar projects regarding substance use disorders, including opioid use disorder. The agency has approved this option in 17 states.

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