The COVID-19 pandemic has had a devastating effect on nearly every corner of the health care system, but behavioral health providers have been among the hardest hit. As demand for mental health and substance use disorder (SUD) services has surged, many organizations have faced unprecedented financial strain, leaving them struggling to keep their doors open. Recognizing this gap, the U.S. Department of Health & Human Services (HHS) has announced a major expansion of its Provider Relief Fund (PRF) program, opening up new opportunities for behavioral health providers who were previously left out.
The latest phase of funding, announced on October 1, 2020, sets aside $20 billion to support providers on the front lines of the pandemic, including those offering critical behavioral health services. Importantly, this phase makes newly eligible a broad range of providers who had not previously been able to access federal relief dollars, marking a significant turning point in the fight to stabilize and sustain behavioral health care during the crisis.
Expanded Eligibility For Behavioral Health Providers
Until this announcement, only behavioral health organizations reimbursed through Medicare or Medicaid had been eligible for relief. That left many providers, particularly community-based programs and private practices, without access to desperately needed funding.
Now, HHS has broadened the list of eligible providers to include a wider spectrum of mental health and addiction professionals. Working in partnership with the Substance Abuse and Mental Health Services Administration (SAMHSA), the Health Resources and Services Administration (HRSA) identified categories such as addiction counseling centers, mental health counselors, and psychiatrists as newly eligible.
The announcement has been welcomed as a major victory by advocacy organizations, though some details remain unclear. For example, psychiatrists were already eligible under previous phases, which has caused some confusion about the specific expansion categories. Still, the overarching message is clear: more behavioral health providers now have access to the financial support they need to continue serving their communities.
The Financial Strain On Behavioral Health Organizations
The expansion comes at a critical moment. Behavioral health organizations across the country have faced skyrocketing demand for services as the pandemic has intensified stress, isolation, unemployment, and grief. At the same time, many of these organizations have seen revenues fall due to disruptions in service delivery, reduced in-person visits, and increased costs related to safety protocols and telehealth adoption.
A recent survey by the National Council for Behavioral Health found that nearly two-thirds of behavioral health providers have been forced to cancel, reschedule, or reduce services since the pandemic began. Nearly half have laid off or furloughed staff. Without relief, many risk permanent closure—at a time when their services are more essential than ever.
Chuck Ingoglia, president and CEO of the National Council, praised the HHS announcement as an important lifeline. “The administration’s announcement of an additional $20 billion in relief funds gives much-needed support at a time when demand for mental health and substance use treatment has skyrocketed due to increased isolation, unemployment, and other difficulties Americans face during this crisis,” he said in a statement.
Advocacy Groups Applaud, But Call For More
Several leading industry associations have been pushing for months to secure expanded relief funding for behavioral health providers. The National Association for Behavioral Healthcare (NABH), the National Association of Addiction Treatment Providers (NAATP), and the National Council for Behavioral Health have all raised concerns about the exclusion of many providers from earlier phases of funding.
Mark Dunn, public policy director at NAATP, emphasized that while the new funding is a significant step, it is not enough to address the full scope of need. “While this is not the amount necessary to provide relief to every program in need, it is a substantial step forward and sets a positive precedent for new funding in the future,” he noted.
Similarly, NABH’s president and CEO, Shawn Coughlin, acknowledged both the progress and the ongoing challenges. “The categories—addiction counseling, mental health counselors, and psychiatrists—are a bit confusing because psychiatrists are already eligible,” he told Behavioral Health Business. “So we’re digging into it.” Still, Coughlin applauded the expansion as a positive move for the field.
Who Can Apply And How Much Is Available?
Under this new phase, providers can receive 2% of annual revenue from patient care, plus an additional payment designed to cover pandemic-related revenue losses and expenses. HHS will calculate final allocations based on three key factors:
- Changes in operating revenues from patient care
- Increases in operating expenses related to COVID-19, including safety measures and telehealth expansion
- Previous payments already received through the Provider Relief Fund
In addition to newly eligible providers, organizations that previously received PRF funding may apply for additional aid if they continue to face financial challenges. Another important expansion: organizations that began practicing in 2020, which were previously excluded, may now also apply.
Applications opened on October 5, 2020, with a deadline of November 6. HHS has urged providers to apply as early as possible to speed up the review process and accelerate payment distributions.
Why This Matters For Patients And Communities
The financial stability of behavioral health providers is not just an organizational concern—it has direct consequences for patients and communities. When providers are forced to cut services, furlough staff, or close their doors, individuals struggling with mental health conditions or substance use disorders lose access to care. This can lead to worsening health outcomes, increased emergency room visits, and higher rates of overdose or suicide.
By expanding relief eligibility, HHS is helping ensure that more providers can continue to meet rising demand. This funding has the potential to preserve critical access points for care, particularly in rural and underserved communities where options are already limited.
The Broader Policy Context
The expansion of relief funding also highlights a growing recognition at the federal level of the essential role behavioral health providers play in public health. Historically, mental health and addiction services have been underfunded and marginalized compared to physical health care. The pandemic has brought new urgency to correcting that imbalance.
Many advocates see this expansion as a step toward greater parity between behavioral and physical health. It also underscores the need for sustained investment beyond the pandemic. While short-term relief is critical, long-term policy solutions—such as increased reimbursement rates, expanded telehealth coverage, and permanent parity enforcement—will be necessary to build a stronger, more resilient behavioral health system.
Looking Ahead
As providers begin applying for relief funds, much will depend on how efficiently HHS processes applications and distributes payments. Transparency about eligibility and allocation will also be key to ensuring that funding reaches the providers most in need.
While challenges remain, the expansion of eligibility marks meaningful progress. It reflects months of advocacy and underscores the government’s growing recognition of the behavioral health sector’s importance during this unprecedented crisis.
Ultimately, the goal is clear: to keep doors open, staff employed, and services available to the millions of Americans who rely on behavioral health care. This latest relief funding represents not just financial support, but also a signal that behavioral health providers are being seen and valued as vital components of the nation’s health care safety net.
