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On March 9, 2024, President Biden signed into law the Consolidated Appropriations Act, 2024 (P.L. 118-42). The Consolidated Appropriations Act, 2024 (CAA 2024) includes a number of Medicaid and Children’s Health Insurance Program (CHIP) provisions related to mental health and substance use disorder (SUD) care and coverage including provisions extending and expanding policies from the 2018 Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act).

This issue brief explains the Medicaid and CHIP mental health and SUD provisions of the CAA 2024. Among other provisions, the CAA 2024 permanently requires state Medicaid plans to provide coverage for certain medication-assisted treatment and related counseling services and therapy; implements new data collection and reporting requirements related to the treatment of SUD and mental health conditions; makes permanent the state plan option to cover services for certain individuals receiving treatment in institutions for mental diseases (IMDs); and mandates guidance related to improving the behavioral health workforce and integration of care with primary care under Medicaid and CHIP.

SUPPORT Act Provisions Made Permanent and/or Modified

The bipartisan SUPPORT Act, which became law in October 2018, included a number of Medicaid and CHIP provisions related to coverage and services for individuals with SUDs and mental health conditions. Some of the SUPPORT Act provisions were permanent, such as the new requirement that state Medicaid programs must report annually on behavioral health quality measures of the adult core set and a requirement for state CHIP programs to include coverage of mental health services (including behavioral health). But other provisions of the SUPPORT Act were temporary in nature and included sunset dates.¹ The CAA 2024 made permanent and/or further modified a number of these provisions, detailed below.

Requirement for State Medicaid Plans to Provide Medicaid Coverage for Medication-Assisted Treatment (MAT)

Under the SUPPORT Act, states were required to provide Medicaid coverage for all forms of FDA-approved drugs and biologics for medications to treat opioid use disorders, including related counseling services and behavioral therapy, for a period of five years (from October 1, 2020 until September 30, 2025). According to the Centers for Medicare & Medicaid Services (CMS), this could include counseling and therapy services such as individual and group therapy, peer support services, and crisis intervention services. The provision also created an exception to the requirement for states that certified that implementation was infeasible statewide due to issues such as provider shortages, with approval of the Secretary of the Health and Human Services (HHS).

The CAA 2024 strikes the 2025 sunset date, making the requirement for state Medicaid programs to cover medication for opioid use disorders permanent. It also modifies the exception implementation language to require that states must certify an inability to comply with the requirement due to provider shortages at least every five years. According to a report by the Substance Abuse and Mental Health Services Administration (SAMHSA), most states generally appear to reimburse for medications for the treatment of opioid use disorder, however documentation available to the public is often incomplete.

Collection and Reporting of Comprehensive Data for Specified Populations Enrolled in Medicaid and CHIP

The SUPPORT Act required the Secretary of HHS to publish an annual public report with comprehensive data on the prevalence of SUDs and services provided for the treatment of SUDs in Medicaid for 2019 through 2024. The most recent report to Congress, “T-MSIS Substance Use Disorder (SUD) Data Book, Treatment of SUD in Medicaid, 2021,” was released in December 2023 and includes state-by-state information on the number and percentage of individuals enrolled in Medicaid who have a SUD, treatment services provided by state Medicaid programs including by service type and setting, delivery system employed to provide SUD services by state Medicaid programs (i.e., managed care vs. fee-for-service), and other information.

The CAA 2024 builds off of the SUPPORT data reporting requirement by including a new and permanent data-reporting provision. Importantly, it also expands the data reporting to include include mental health conditions along with SUDs, as well as CHIP data. Beginning in September 2025, and annually thereafter, the Secretary of HHS is required to link, analyze, and publish, on a publicly available website, data reported by states relating to SUD and mental health services provided to individuals enrolled in Medicaid or CHIP and diagnosed with a SUD or mental health condition, including data that is disaggregated by age. Specifically, among other information, the updated annual analysis under the CAA 2024 must include state-by-state information on individuals enrolled in Medicaid or CHIP including:

• The number and percentage of individuals in each major enrollment category who have been diagnosed with an SUD, mental health condition, or both.
• For individuals with a SUD and/or mental health diagnosis, a list of treatment services including, to the extent such data are available, specific adult and pediatric services, by each major service type and within each major setting type.
• The number and percentage of individuals by major enrollment category, who have a SUD or mental health diagnosis and receive treatment via a Medicaid managed care organization (MCO), fee-for-service, or an alternative payment model.
• The number and percentage of individuals with a SUD or mental health diagnosis that received services in an outpatient or community-based or home-based setting after receiving mental health or SUD services in an inpatient or residential setting.
• The number and percentage of inpatient admissions in which services for a SUD or mental health condition were provided to an individual that occurred within 30 days after discharge from a hospital or residential facility.
• The number of emergency department visits by an individual who has a SUD or mental health diagnosis and who within the last seven days was discharged from an inpatient stay at a hospital, mental health facility, residential treatment facility or other similar settings where they received SUD or mental health treatment.
• The number and percentage of individuals that received an assessment for a mental health condition or substance use disorders and the number of SUD or mental health services provided in the 30 days post-assessment.
• Information on prescription drugs dispensed to certain individuals with inpatient admissions or emergency department visits for SUD or mental health treatment after recent discharge from inpatient or residential settings.

The CAA 2024 requirement also includes a number of provisions to make the data research-friendly. By March 2027, and annually thereafter, the HHS Secretary, must publish a revised analysis that allows for a research-ready and publicly-accessible interface of the data based on input from stakeholders on the usability of the data. Finally, it appropriates $10 million for the Secretary to carry out the required activities.

Monitoring Prescribing of Antipsychotic Medication

The SUPPORT Act required state Medicaid programs to have in place a program to monitor and manage the appropriate use of antipsychotic medications among children, including foster youth specifically, beginning October 1, 2020. According to CMS’ 2022 report on state fee-for-service drug utilization review (DUR) programs, all state fee-for-service DUR programs reported having such a program in place. Yet based on reported responses from MCOs as part of their managed care DUR report, only 88% of Medicaid MCOs had a program in place for managing or monitoring appropriate use of antipsychotic drugs in children, suggesting more work is needed in states to ensure sufficient oversight of MCOs.³ The CAA 2024 builds on the SUPPORT Act requirement to also include monitoring and managing antipsychotic medication for adults over the age of 18 receiving home and community-based services and residing in institutional care settings such as nursing homes or inpatient psychiatric hospitals, starting March 2026.

Extension of State Option to Provide Medical Assistance for Certain Individuals in Institutions for Mental Diseases (IMDs)

The Medicaid statute generally prohibits federal Medicaid dollars from funding services provided to certain individuals in IMDs with more than 16 beds, also referred to as Medicaid’s “IMD exclusion.” The SUPPORT Act created a limited and temporary exception to the IMD exclusion by creating a 1915(l) Medicaid state plan option to provide high-quality and clinically-appropriate withdrawal management and SUD treatment services in residential and inpatient treatment facilities that qualify as an IMD for adults covered by Medicaid aged 21 through 65. As part of the state plan option, states and providers were required to meet a number of requirements, including a state maintenance of effort requirement to maintain certain state funding support for services provided in IMDs and outpatient and community-settings. Eligible IMDs were also required to meet other coverage and services requirements including offering at least two forms of MAT on-site alongside behavioral health services. The 1915(l) state plan option was made available from October 1, 2019 until September 30, 2023 after which it sunset. As of September 2023, two states (South Dakota and Tennessee) had adopted the state plan option.⁴

The CAA 2024 provision makes the 1915(l) state plan option permanent and allows existing states to receive state plan amendment approval retroactive to October 1, 2023. It also makes a number of amendments to the state plan option. This includes changing the state maintenance of effort requirement to apply to all non-Federal funds, only apply to outpatient and community-based services, and provide states with additional flexibility on the base year. It also modifies certain condition definitions.

Starting October 2025, states seeking the 1915(l) IMD state plan option must also have evidence-based substance use disorder-specific individual placement criteria and utilization management approaches in place to ensure eligible individuals receive an appropriate level of care. In addition, states must use a process to review compliance of eligible IMDs with certain standards that employ nationally recognized SUD-specific program standards. Not later than 12 months after a state plan amendment approval (or by March 2025 for states with existing state plan amendments), the state must also assess the availability of treatment for individuals enrolled in Medicaid in each of the required levels of care across the care continuum as well as the availability of MAT and medically-supervised withdrawal management services. The assessment must be completed within 12 months.

Other Medicaid and CHIP Mental Health and SUD Provisions

In addition to provisions extending or expanding provisions from the 2018 SUPPORT Act, the CAA also includes additional Medicaid and CHIP mental health and SUD provisions.

Guidance Relating to Improving the Behavioral Health Workforce and Integration of Care under Medicaid and CHIP

The CAA 2024 requires the Secretary of HHS to issue guidance to states on a number of topics related to improving the behavioral health workforce and integration of mental health or SUD care with primary care in Medicaid and CHIP. The guidance is required to be issued by March 2026. Among other requirements, the guidance to states must include:

• opportunities to increase access to mental health and SUD providers that participate in Medicaid or CHIP (with a focus on improving workforce capacity in rural and underserved areas) such as through education, training, recruitment and retention including best practices from states as well as opportunities to finance, support and expand the availability of providers of community-based mental health and SUD services including participation of paraprofessionals; and
• opportunities to promote the integration of mental health or SUD services with primary care services including an overview of state options for adopting and expanding value-based payment arrangements and alternative payment models, opportunities to leverage Medicaid to support integration including with respect to the use of electronic medical records in mental health care and SUD care settings, and examples of specific integration strategies and models (such as the collaborative care model or primary care behavioral health model for behavioral health integration) designed to support different age groups including children and youth and individuals over 65.

Certified Community Behavioral Health Clinic (CCBHC) Services Under Medicaid

Under current law, a number of state Medicaid programs reimburse for services provided by certified community behavioral health clinics (CCBHCs) either via the Medicaid CCBHC Demonstration created under the Protecting Access to Medicare Act of 2014 (PAMA) and/or through existing Medicaid authorities such as a state plan amendment or section 1115 demonstrations. The PAMA Medicaid CCBHC Demonstration program provides participating states with enhanced federal Medicaid matching funds (equivalent to a state’s CHIP enhanced federal medical assistance percentage) for eligible CCBHC services provided to individuals covered by Medicaid. States participating in the CCBHC Demonstration are also required to establish prospective payment systems for Medicaid services delivered at CCBHCs and ensure CCBHCs meet federal standards such as providing 24-hour crisis services and routine outpatient care, ensuring that services for children and youth are family-centered, youth-guided, and developmentally appropriate, and serving anyone who requests care for mental health or substance use, regardless of their ability to pay. States that reimburse for services delivered at CCBHCs outside of the CCBHC Demonstration continue to receive their regular federal Medicaid match for such services and have additional flexibility when it comes to reimbursement.

The CAA 2024 amends the Medicaid statute to formally define and add CCBHC services to the list of Medicaid-coverable categories of services. The definition includes a list of services – including screening and assessment, outpatient mental health and SUD services, crisis mental health services, intensive case management services, and peer support and counsel services and family support – provided at a CCBHC. The provision also defines a CCBHC as an organization certified by a state to meet certain criteria established by the Secretary of HHS under the PAMA CCBHC Demonstration program (regardless of whether a state is participating in the demonstration program), provides all listed services, and agrees to provide relevant data such as encounter or quality data to the state or Secretary of HHS.

Related Medicaid and CHIP Provisions

The CAA 2024 also includes a number of broader Medicaid and CHIP provisions that, while not specifically limited to mental health and SUD coverage or care, are related to the provision of such coverage or services. This includes:

• Requiring states to suspend rather than terminate Medicaid or CHIP coverage for individuals who are inmates of public institutions starting January 1, 2026. States are currently required to suspend rather than terminate Medicaid coverage for youth in juvenile settings (as required by the 2018 SUPPORT Act) and will be required to do the same for youth covered by CHIP starting in January 2025 (as required by the 2023 Consolidated Appropriations Act). The CAA 2024 would extend this requirement to all individual covered by Medicaid and CHIP including pregnant individuals. According to SAMHSA, an estimated 44% of individuals in jail and 37% of those in prison have a mental illness compared to 18% of the general public. And as noted by the Medicaid and CHIP Payment and Access Commission, suspending Medicaid coverage rather than terminating it allows individuals to more quickly gain coverage upon release.
• Providing $113.5 million in funding to the Secretary of HHS to award and administer grants to states to develop operational capabilities to promote the continuity of care for individuals who are inmates of a public institution and are eligible for Medicaid or CHIP. HHS must award funds by March 2025.
• Requiring the Secretary of HHS to issue guidance to states on common implementation and operation challenges states face in ensuring access to high-quality, timely, accessible care before, during, and after incarceration for individuals covered by Medicaid and CHIP including best practices and strategies, by September 2025. The CAA 2024 provides $5 million in funding to the Secretary to carry out this requirement along with the mandated guidance on improving the behavioral health workforce and integration of care and updated requirements related to monitoring of prescribing of antipsychotic medications.
• Eliminating reductions to Medicaid disproportionate share hospital (DSH) payments for fiscal year 2024 and delaying existing fiscal year 2025 cuts to January 1, 2025. DSH payments are payments made by states to hospitals that serve a high proportion of individuals covered by Medicaid or uninsured patients (which may include payments to IMDs). According to the Congressional Research Service, while most states focus their Medicaid DSH funding on hospitals, in fiscal year 2022, 30 states provided Medicaid DSH payments to IMDs including two states that spent all of their Medicaid DSH funding on IMDs.

Timeline

Endnotes

¹ The requirement that state Medicaid programs report annually on the behavioral health quality measures of the adult core set was effective starting FY 2024.

² Data on infant and early childhood health-related services is key to ensuring access to high-quality mental health care for infants and young children. For example, data on rates of child social-emotional and parent depression screening and the provision of services, such as evidence-based dyadic treatment, can show the extent to which preventive care and treatment of young children are being used at expected levels, or the extent to which they appear to be under-used.

³ While some MCOs may not cover pediatric populations or have psychotropic drug benefits carved out of their managed care programs, this is an area of for continued oversight given that a majority of children in the US are enrolled in MCOs and that many states enroll Medicaid-covered foster care children and youth in managed care. Additionally, according to a 2022 study analyzing Medicaid MCOs in Texas, about 8% of children on Medicaid who were not in foster care were prescribed psychotropic medications, in comparison to the 35% of those who were in foster care.

⁴ The majority of states employ separate section 1115 demonstrations to provide SUD services in IMDs rather than SUPPORT Act state plan option. As of April 23, 2024, 37 states had approved section 1115 demonstrations with waiver provisions to receive federal financial participation for SUD treatment provided in IMDs.