The Medicare Advantage behavioral health provider shortage is becoming an increasingly urgent issue, as more seniors rely on these plans for their mental health care. Medicare Advantage (MA) plans are designed to provide comprehensive coverage to Medicare beneficiaries, many of whom have complex behavioral health needs. However, the shortage of behavioral health professionals—especially psychiatrists—is making it difficult for these plans to meet federal provider network standards and deliver timely, adequate care.
In January, the Centers for Medicare and Medicaid Services (CMS) announced a proposed rule that seeks feedback from healthcare providers, insurers, and other stakeholders to better understand the challenges MA plans face when trying to add behavioral health providers to their networks. This move reflects growing concern at the federal level about how the provider shortage may be affecting access to behavioral health services for Medicare Advantage members. Given that MA plans cover a rapidly growing population of seniors, the shortage has far-reaching implications for the future of mental health care in this demographic.
Why the Medicare Advantage Behavioral Health Provider Shortage Is Worsening
Several factors contribute to the Medicare Advantage behavioral health provider shortage, creating a complex web of challenges. First and foremost, psychiatrists have the highest opt-out rate of any physician specialty when it comes to Medicare participation. According to the Kaiser Family Foundation, 7.2% of psychiatrists have chosen to opt out of Medicare, compared to just about 1% of physicians overall. This disproportionate opt-out rate significantly limits the pool of psychiatrists available to MA plans.
At the same time, the Medicare-eligible population is expanding quickly. The U.S. Census Bureau estimates that by 2030, 73 million Americans will be aged 65 or older, representing roughly 21% of the population. By 2060, that number is expected to grow to 95 million, or about 23% of the population. This demographic shift means that the demand for behavioral health services among seniors is only going to increase.
Medicare Advantage plans themselves are growing in popularity. In 2012, just 26% of Medicare beneficiaries were enrolled in MA plans; by 2021, that figure had increased to 42%. This growth puts additional pressure on MA networks to expand their behavioral health offerings to serve a larger and more diverse member base.
The COVID-19 pandemic further exacerbated this shortage. It not only increased the prevalence of behavioral health needs but also reduced stigma around seeking care. Yet the supply of qualified behavioral health providers has not kept pace. The workforce is aging, too. The Association of American Medical Colleges (AAMC) reported that in 2019, 61% of psychiatrists were aged 55 or older. As this cohort retires, the shortage is expected to worsen, and even substantial increases in training new psychiatrists would take years to impact the supply.
The Impact of the Medicare Advantage Behavioral Health Provider Shortage on Access to Care
This shortage has tangible effects on the quality and availability of behavioral health services for MA beneficiaries. CMS requires MA plans to meet network adequacy standards, ensuring that members have timely access to necessary providers, including those specializing in behavioral health. When plans cannot meet these standards, they must request exceptions, a process that CMS has seen increase over the years.
For patients, this means potential delays in care, longer wait times for appointments, and limited provider choices. In some regions, beneficiaries may struggle to find psychiatrists or therapists within their MA network, especially if they prefer in-person visits.
Medicare’s reimbursement policies also play a role in limiting network adequacy. Currently, only certain types of behavioral health providers—such as clinical social workers—are eligible for therapy and counseling reimbursements under Medicare. This restriction narrows the range of providers MA plans can include, leaving many licensed mental health professionals excluded despite being qualified to provide care.
Telehealth’s Role Amid the Medicare Advantage Behavioral Health Provider Shortage
Telehealth has emerged as an important strategy to mitigate the behavioral health provider shortage within Medicare Advantage networks. Telepsychiatry and virtual counseling can expand access, especially for seniors with mobility or transportation challenges.
Companies like Array Behavioral Care have forged partnerships with large MA insurers such as Humana to provide telehealth-based in-home psychiatric and counseling services to millions of beneficiaries. CMS has also updated its telehealth policies, permanently allowing Medicare beneficiaries to receive mental health telehealth visits from their homes, regardless of geographic location. Furthermore, providers can now conduct audio-only visits if patients decline video-based sessions.
Despite these advances, barriers remain. Medicare reimbursement rates for telehealth visits, while improved, are still considered insufficient by many providers. Additionally, the administrative burden of enrolling in Medicare and the complexities of billing discourage many psychiatrists and therapists from participating in MA networks. This contributes to the persistent Medicare Advantage behavioral health provider shortage despite the expanded telehealth options.
The Road Ahead: Addressing the Medicare Advantage Behavioral Health Provider Shortage
Addressing the Medicare Advantage behavioral health provider shortage will require comprehensive, coordinated efforts from policymakers, payers, providers, and other stakeholders. Several key areas need attention:
- Reimbursement reform: Increasing Medicare reimbursement rates and broadening the range of eligible behavioral health providers for therapy and counseling services could incentivize more providers to participate.
- Simplifying administrative processes: Reducing the complexity of Medicare enrollment and billing could encourage psychiatrists and therapists to join MA networks.
- Expanding telehealth access: Continuing to support flexible telehealth policies and investing in technology infrastructure will help make behavioral health care more accessible.
- Workforce development: Increasing funding for psychiatry residencies and behavioral health training programs will be essential to address the long-term shortage.
- Innovative partnerships: Collaborations between MA plans and telepsychiatry companies can rapidly expand provider networks and improve access.
CMS’s recent request for information marks a critical step in gathering insights and identifying solutions. As the Medicare population grows and behavioral health needs escalate, resolving this shortage is crucial to ensuring that seniors receive timely, high-quality mental health care.
