Behavioral health services covered under state plan authority

Medicaid coverage of behavioral health services, including mental health and substance use disorder services, varies greatly among states. However, requirements exist for behavioral health services to be provided to certain groups:

  • In all states, children enrolled in Medicaid are entitled to receive all medically necessary services, including mental health services, under the Early and Periodic Screening, Diagnostic and Treatment benefit.
  • In addition, alternative benefit plans (ABPs) for the newly eligible population under the Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) must contain essential health benefits, including mental health and substance use disorder benefits. ABP behavioral health services must be covered at parity with medical and surgical benefits, meaning that behavioral health services must not have less favorable benefit limitations than medical and surgical benefits (§1302(b)(1) of the ACA). Behavioral health services paid for under fee for service are not currently subject to the parity regulations or essential benefits provisions required for ABPs.

Below we describe services covered under state plan authority and fee-for-service payment approaches.  All covered services may be subject to limits on the amount, duration, and scope. For example, states may cap the number of therapy and counseling sessions per enrollee. In addition, coverage policies may differ by eligibility pathway. For details on state plan services, see the Behavioral Health State Plan Services compendium. For more information on services covered by home and community-based (HCBS) waiver programs and state plan amendments, see Behavioral health services covered under HCBS waivers and SPAs.

Mandatory mental health and substance use disorder services

States are required to cover only certain mental health and substance use disorder services such as medically necessary inpatient hospital services, outpatient hospital services, rural health clinic services, nursing facility services, home health services, and physician services. Each state defines medical necessity in its state plan, subject to approval by the Centers for Medicare & Medicaid Services (CMS). For example, a life-threatening drug overdose requiring an emergency room visit and subsequent hospitalization would be covered. However, ongoing addiction therapy after hospitalization may not be considered medically necessary by the state, and thus may not be a covered service.

Optional mental health services

States may elect to cover other services that are not mandatory but are important to enrollees with behavioral health conditions. Optional services include prescribed medicines (which all states currently offer); targeted case management; rehabilitation services; therapies; medication management; clinic services; licensed clinical social work services; peer supports; and stays in institutions of mental disease (IMDs) for children up to age 21 and adults age 65 and over.

States often elect to cover certain optional services under the rehabilitative state plan benefit (called the rehab option), because the option offers states unique flexibility in delivering recovery-oriented mental health and addiction services to individuals. Such services may be provided in community settings, including a person’s home or work environment; by a broader range of professionals than some other services, including paraprofessionals, and; a broader range of services, including those that assist in acquiring skills essential for everyday functioning (Crowley and O’Malley 2007).

States may define the optional rehabilitative state plan benefit in a way that makes it medically necessary for only a subset of enrollees with behavioral health conditions. The rehab option allows states to cover a wide variety of recovery-oriented services for both mental health and substance use disorders. These include therapy, counseling, training in independent living skills, recovery support and relapse prevention training, employability skills, and relationship skills. Intensive nonhospital services including partial hospitalization and assertive community treatment can be covered under the rehab option or outpatient services (SAMHSA 2013).

Certain rehab option services, which include services in the day services category, psychotherapy, and counseling or behavior therapy, are commonly offered under Medicaid state plan authority. As of September 2015, 46 states and the District of Columbia offered at least one service in the day services category, such as community psychiatric support services, and assertive community treatment under the rehab option. Forty-two states and the District of Columbia offered psychotherapy, and every state but one offers another therapy type, such as counseling or behavior therapy for individuals, couples, families, or groups.

Services that are less commonly offered include supported employment and other employment services (13 states and the District of Columbia); home-based services, (15 states and the District of Columbia); and peer support services (17 states and the District of Columbia).

Other common mental health services provided under state plans include (as of September 2015):

  • home-based services (15 states and the District of Columbia);
  • round-the-clock services (20 states and the District of Columbia);
  • caregiver support services (14 states and the District of Columbia); and
  • telemedicine for mental health services (39 states).

One service covered less frequently is psychosocial rehabilitation, a social functioning model that aims to keep people in the community (Drake and Latimer 2012, Barbato 2006). Specific services included in psychosocial rehabilitation differ by state, but often include psychological treatment; creating a long-term support system for basic needs such as housing, employment, and social network; and educational, emotional or other support for enrollees’ families. As of September 2015, 17 states and the District of Columbia offered at least some psychosocial rehabilitation services.

Optional substance use disorder services

Compared to mental health services, substance use disorder services are covered less often. Optional services that are particularly relevant to substance use disorder treatment include prescription drugs, clinic services, rehabilitation services, other practitioner services, therapy services, personal care services, transportation services, case management services, and IMD services for people under age 21 and age 65 and over.

The most commonly covered service types for individuals with substance use disorders are medication-assisted treatment, covered by all states and the District of Columbia, and detoxification (inpatient, outpatient, or both), covered by 43 states and the District of Columbia as of September 2015. Thirty-one states covered telemedicine for substance use disorder services. Fewer states cover rehabilitative services, which include home-based services and supported employment, each covered by just eight states and the District of Columbia as of September 2015.

Detoxification. Medical detoxification is a process that systematically and safely withdraws people from addicting drugs, usually under the care of a physician. Detoxification can be done on an inpatient or outpatient basis. Inpatient detoxification allows the patient to be closely monitored, prevents further use of the substance from which the patient is detoxifying, and can speed up the process. Outpatient detoxification has the advantage of being less disruptive to the patient’s life and less expensive (The Addiction Recovery Guide 2015). As of September 2015, 32 states cover inpatient detoxification, 34 states cover outpatient detoxification, and 22 states cover both.

Medication-assisted treatment. Medication-assisted treatment refers to the use of Food and Drug Administration (FDA)-approved medications in combination with evidence-based behavioral therapies (CMS 2014). As of September 2015, all states and the District of Columbia cover naloxone and disulfiram, and 49 states and the District of Columbia cover naltrexone. 30 states and the District of Columbia cover methadone, and acamprosate is covered by 32 states. Click here for information on state coverage of FDA-approved drugs to treat addiction.

Rehabilitative therapies. Rehabilitative therapies focus on helping individuals with behavioral health disorders and their families lead functional and productive lives in the community. As of September 2015, 14 states offered peer support for people with substance use disorders, 11 states offered caregiver support services, and 8 states and the District of Columbia offered home-based services and supported employment services through the state plan option. Intensive outpatient therapy is an alternative treatment model that allows a person to take part in normal daily activities and also participate in treatment at an appropriate facility at some point during the day. Intensive outpatient services were covered by 22 states as of September 2015.

Residential treatment. Many states cover some residential treatment for substance use disorders, both for detoxification and rehabilitative treatment. Twenty-six states and the District of Columbia cover inpatient residential services other than inpatient detoxification, and 17 states cover partial hospitalization services. As of September 2015, 38 states covered IMD services for individuals under age 21, and 44 states and the District of Columbia covered IMD services for individuals age 65 and older.