All state Medicaid programs are required to cover certain behavioral health services, including medically necessary inpatient hospital services, outpatient hospital services, rural health clinic services, nursing facility services, home health services, and physician services. Many other services used for the treatment of mental health and substance use disorders are optional services in the Medicaid program. These include prescription drugs (which all states currently offer although specific medicines covered may differ); targeted case management; rehabilitation services; rehabilitative therapies, such as occupational, physical, speech, or other therapies; medication management; clinic services, licensed clinical social work services; peer supports; and stays in institutions for mental diseases for persons age 65 and over and children up to age 21 (SAMHSA 2013).
Behavioral health services can be covered under several different statutory authorities, including state plans, various waivers, and other authorities for Medicaid payment. Each type of authority differs as to which services are offered and which Medicaid enrollees have access to those services. As a result, Medicaid coverage of behavioral health services varies both across states and within states depending upon the statutory authority under which services are provided, as well as the beneficiaries’ Medicaid eligibility pathway, state and county of residence, age, behavioral health diagnosis, severity of behavioral health diagnosis, and co-occurring diagnosis.
Medicaid authorities that cover behavioral health services include:
- Medicaid state plan
- alternative benefit plan
- Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit
- Section 1115 demonstration
- Section 1915(c) waiver
- Section 1915(i) state plan amendment
- health homes; and
- Financial Alignment Initiative demonstrations for dually eligible beneficiaries.
Learn more about Medicaid behavioral health benefits:
- State policies for behavioral health services covered under the state plan
- Medicaid state plan behavioral health benefits
- Behavioral health services covered under HCBS waivers and Section 1915(i) SPAs
 Behavioral health disorders are defined as those that can be found in the Diagnostic and Statistical Manual of Mental Disorders (DSM). Examples of behavioral health disorders include attention-deficit/hyperactivity disorder (ADHD), autism spectrum disorder, conduct disorder, disruptive mood dysregulation disorder, intellectual disability, personality disorders, posttraumatic stress disorder, schizophrenia, social anxiety disorder, and substance use disorder. The severity of a behavioral health disorder can vary from person to person and can change over time. Some people experience a behavioral health disorder for a short period of time, while others deal with disorders for their entire life. Additionally, some people experience an uptick in symptoms at certain times in their lives or, in the case of a substance use disorder, may fluctuate between abstinence and relapsing.