Healthcare industry leaders are calling for comprehensive regulatory reforms to address persistent behavioral health access gaps as demand for mental health and substance use disorder services reaches unprecedented levels driven by pandemic-related stress, economic instability, and social upheaval. Executives from Oscar Health, One Medical, and Ginger emphasized during a recent HLTH GoLive virtual webinar that while telehealth regulatory flexibilities implemented during the COVID-19 pandemic have meaningfully expanded treatment access, sustained progress requires additional state and federal policy changes addressing licensure restrictions, reimbursement barriers, and outdated privacy regulations that constrain providers’ ability to scale services and coordinate care effectively across fragmented delivery systems.
The discussion highlighted a fundamental tension in behavioral health policy where existing regulatory frameworks designed to protect patients and ensure quality standards increasingly function as impediments to care access in an era where technology enables new delivery models that don’t conform to traditional practice patterns. Regulatory structures developed decades ago when healthcare delivery occurred primarily through in-person interactions in physical facilities struggle to accommodate virtual care platforms, coaching models, asynchronous communication, and interstate service delivery that characterize modern behavioral health innovation. Industry stakeholders argue that thoughtful regulatory modernization can preserve essential patient protections while removing unnecessary barriers that prevent providers from deploying technology solutions addressing the nation’s escalating behavioral health crisis.
The pandemic created natural experiments in regulatory flexibility as states and federal agencies implemented emergency waivers suspending or relaxing various requirements to ensure treatment continuity during lockdowns and social distancing mandates. These temporary measures demonstrated that many longstanding regulatory constraints were not essential to patient safety or care quality, prompting questions about whether pre-pandemic regulatory structures reflected evidence-based policy or simply institutional inertia resistant to change despite technological advancement and evolving care delivery models.
Technology Enhances Access and Enables Scale
Sean Martin, senior medical director at Oscar Health, emphasized that technology excels at two critical functions in behavioral health delivery: enhancing access for patients facing geographic, transportation, scheduling, or stigma-related barriers to traditional in-person care, and enabling scale that allows providers to serve substantially larger patient populations than facility-based models permit. These twin capabilities address fundamental challenges that have plagued behavioral health systems for decades, where treatment capacity consistently falls short of population needs while entire communities lack adequate provider availability.
Oscar Health, a New York-based technology-driven health insurance company, recently raised $140 million in a funding round led by Tiger Global Management, bringing total funding to $1.6 billion, and confidentially filed for an initial public offering in late 2020. The company’s substantial capital raises and public market aspirations reflect investor confidence in technology-enabled healthcare models that leverage digital platforms, data analytics, and care coordination to improve outcomes while managing costs more effectively than traditional insurance approaches.
Enhanced access through technology manifests across multiple dimensions including geographic reach where virtual care eliminates travel requirements that prevent rural residents or individuals with transportation limitations from accessing treatment, temporal flexibility where asynchronous messaging and flexible scheduling accommodate patients managing work responsibilities or childcare obligations incompatible with traditional appointment structures, and reduced stigma as patients can engage treatment from private settings rather than entering facilities publicly identified with mental health or addiction services.
Scalability advantages stem from technology’s ability to optimize provider time allocation, support diverse service intensity levels matching patient acuity, facilitate efficient care coordination, and remove physical capacity constraints inherent to facility-based delivery. A therapist conducting virtual sessions can eliminate commute time between office locations, reduce downtime between appointments, and potentially serve patients across wider geographic areas compared to models requiring physical presence at multiple sites. Digital platforms can triage patients to appropriate service levels ranging from self-guided resources and coaching for lower-acuity needs through intensive clinical services for severe conditions, ensuring that advanced clinical expertise focuses on patients requiring specialized intervention rather than addressing concerns that less-intensive modalities could effectively manage.
State Licensure Requirements Constrain Interstate Service Delivery
Jenni Vargas, chief strategy officer at One Medical, a San Francisco-based membership-based primary care practice, identified state licensure restrictions as critical barriers preventing behavioral health providers from achieving the scale necessary to meet national demand. Current medical licensing requirements mandate that clinicians hold licenses in every state where their patients are physically located during treatment encounters, creating significant administrative burden, credential processing delays, and ongoing maintenance costs that limit providers’ ability to serve patients across state lines.
The state-by-state licensure system made logical sense when healthcare delivery occurred exclusively through in-person interactions within defined geographic service areas, but creates arbitrary constraints in virtual care environments where patient location becomes irrelevant to clinical service delivery quality. A therapist licensed in California possesses identical clinical competencies whether treating a patient located in California or Connecticut, yet regulatory frameworks treat these scenarios differently despite no meaningful clinical distinction.
Some states implemented temporary licensure waivers during the pandemic allowing out-of-state providers to treat residents without obtaining state-specific licenses, demonstrating that these restrictions were not essential to patient protection during emergencies. The question confronting policymakers is whether patient safety genuinely requires state-specific licensure for virtual care or whether this represents regulatory inertia that should be reformed to accommodate modern care delivery realities.
Interstate licensure compacts offer potential solutions by creating reciprocity agreements enabling clinicians licensed in one compact member state to practice in other member states without obtaining separate licenses. The Psychology Interjurisdictional Compact has gained adoption across multiple states, allowing psychologists to provide telepsychology services to patients in other compact states after completing streamlined authorization processes. Expanding similar frameworks across behavioral health disciplines including social work, counseling, and psychiatry could substantially improve provider capacity to serve geographically dispersed patients while maintaining state oversight capabilities through compact governance structures.
Vargas emphasized that eliminating interstate licensure barriers could dramatically scale behavioral health supply by enabling providers to serve national patient populations rather than being constrained to single-state practices. A therapist working part-time hours could fill schedule gaps with patients from multiple states rather than limiting availability to local populations, while organizations building national platforms could deploy provider networks serving patients regardless of location rather than maintaining state-specific provider panels with uneven coverage.
Coaching Models Address Prevention and Early Intervention
Dana Udall, chief clinical officer at Ginger, a San Francisco-based virtual behavioral health platform partnering with employers and health plans to deliver coaching, therapy, and psychiatry services nationally, discussed how scale requirements drove her transition from hospital clinical practice to digital health. Her hospital experience revealed persistent supply-demand mismatches where patients needing behavioral health services couldn’t access them due to capacity constraints, lengthy wait times, and system fragmentation that left clinicians burned out while patient needs went unmet.
Ginger’s tiered service model deploys coaches alongside licensed therapists and psychiatrists, enabling the platform to serve larger populations by matching service intensity to patient acuity rather than requiring that all patients receive services from doctoral-level clinicians. Coaches work with individuals experiencing subclinical symptoms, life stress, relationship challenges, or wellness needs that benefit from professional support without requiring intensive clinical intervention, reserving therapist and psychiatrist time for patients with diagnosed conditions requiring specialized treatment.
Martin drew parallels between behavioral health coaching and cardiovascular disease prevention, noting that cardiologists recognize the most effective strategy for reducing heart attack morbidity and mortality involves preventing cardiac events through risk factor management, lifestyle modification, and early intervention rather than treating acute myocardial infarctions after they occur. Applying this prevention-focused logic to behavioral health suggests that coaching interventions teaching coping skills, stress management, resilience, and mindfulness could reduce progression to clinical disorders requiring intensive treatment.
The coaching model addresses a fundamental gap in traditional behavioral health systems where services typically begin after individuals develop diagnosable conditions meeting clinical thresholds rather than providing earlier support when symptoms are emerging but haven’t yet reached diagnostic criteria. This treatment gap means many individuals experience declining mental health for months or years before accessing services, by which point symptoms are more severe, entrenched, and difficult to treat compared to earlier intervention opportunities.
Lower-acuity services including coaching, peer support, psychoeducation, and digital therapeutics can serve vastly larger populations than traditional clinical care models permit, potentially reducing downstream demand for intensive services by preventing symptom escalation and providing tools supporting long-term wellness. Martin suggested that managing mental health more holistically through prevention and early intervention could reduce requirements for advanced clinicians on the back end as fewer individuals develop severe conditions requiring specialized treatment.
HIPAA Regulations Impede Care Coordination
Martin identified Health Insurance Portability and Accountability Act privacy regulations as barriers to integrated care delivery, arguing that current requirements make collaboration and information sharing difficult across providers managing different aspects of patients’ healthcare needs. While HIPAA protections serve important functions preventing unauthorized disclosure of sensitive health information, the regulations were written before contemporary technology platforms and care coordination models emerged, creating compliance challenges that may inadvertently impede care quality.
Effective behavioral health treatment often requires coordination among therapists, psychiatrists, primary care physicians, case managers, and social service providers addressing housing, employment, legal, or financial issues influencing mental health and recovery. However, information sharing across these providers involves complex consent requirements, documentation standards, and privacy protections that create administrative burden while potentially delaying communication critical to timely intervention during crises or care transitions.
Martin advocated for relaxing certain HIPAA restrictions to facilitate greater collaboration among providers coordinating patient care, noting that regulations developed before the technology revolution sometimes function as decelerants to integration and collaboration that could improve outcomes. His perspective aligns with December 2020 proposals from the Department of Health and Human Services to modify HIPAA privacy rules with goals including supporting patient engagement in care, removing coordinated care barriers, and reducing regulatory burdens on the healthcare industry.
Proposed modifications would strengthen patient rights to access their own health information while facilitating care coordination among treatment team members, recognizing that effective care increasingly depends on seamless information flow across providers managing interconnected physical health, behavioral health, and social determinants rather than siloed treatment in isolated settings. Balancing privacy protections with care coordination imperatives represents ongoing policy challenges where stakeholder input and careful regulatory drafting must ensure that reforms enhance both patient autonomy and treatment effectiveness.
The discussion among healthcare executives underscored that while technology offers powerful tools for expanding behavioral health access and improving care delivery efficiency, realizing this potential requires regulatory frameworks evolving beyond outdated assumptions about how, where, and by whom healthcare services are delivered. Policymakers face the challenge of modernizing regulations to accommodate innovation while preserving essential protections, with industry stakeholders emphasizing that getting this balance right represents critical determinant of whether the nation can adequately address its escalating behavioral health crisis.
