The Senate Finance Committee is advancing a major proposal that could reshape access to mental health services for Medicare beneficiaries. The draft legislation, released Thursday, aims to expand Medicare mental health coverage to include licensed marriage and family therapists (LMFTs) and licensed professional counselors—providers who are currently excluded from Medicare’s outpatient mental health benefits.
“There is an enormous need all across the country for mental and behavioral health care, but there aren’t nearly enough providers to meet that demand,” said Senate Finance Committee Chairman Sen. Ron Wyden (D-Ore.). “These proposals are about training new providers and finding opportunities to do more with the mental health workforce we already have.”
Currently, LMFTs and licensed professional counselors cannot bill Medicare, meaning that Medicare mental health coverage excludes roughly 25% of the behavioral health workforce. With about 18% of the U.S. population enrolled in Medicare, this gap represents a significant barrier to care for seniors and those with chronic conditions.
Legislative Context and National Mental Health Priorities
The Senate Finance Committee has positioned itself at the forefront of mental health regulation reform, aligning with the Biden administration’s broader unity agenda. Mental health reform is increasingly intertwined with other national priorities, including legislation addressing youth behavioral health, telehealth expansion, and crisis response.
Other recent efforts in Congress have included the Bipartisan Safer Communities Act, which combines gun safety measures with mental health initiatives. The committee’s draft legislation represents the third in a series of proposed measures to modernize Medicare mental health coverage. Previous drafts focused on telehealth and youth mental health initiatives.
While this draft does not directly include public-private partnerships, the committee emphasized their role in leveraging additional resources to address mental health needs. “Public-private partnerships are also going to be instrumental in solving this challenge by getting private contributions into the game and wringing more value out of taxpayer dollars,” Wyden said.
Strengthening the Existing Behavioral Health Workforce
In addition to expanding coverage for LMFTs and licensed professional counselors, the draft legislation includes several measures aimed at optimizing the existing behavioral health workforce. Key provisions include:
- Licensed Clinical Social Workers (LCSWs): The legislation would allow LCSWs to bill Medicare for health behavior assessment and intervention (HBAI) services, expanding the scope of Medicare mental health coverage to support integrated care.
- Psychologist trainees: Trainees could provide mental health therapy under general supervision rather than direct supervision, increasing their ability to serve Medicare patients.
- Occupational therapists: Medicare would be tasked with educating providers and the public about the role of occupational therapists in treating patients with mental health and substance use disorders, further strengthening Medicare mental health coverage.
Expanding the Behavioral Health Workforce
The U.S. faces a significant shortage of behavioral health professionals. The draft legislation proposes several strategies to address this gap:
- Training and education funding: The creation of 4,000 additional Medicare Graduate Medical Education (GME) slots for psychiatry residencies would expand access to psychiatrists.
- Incentives for underserved areas: Psychiatrists, psychologists, LCSWs, marriage and family therapists, and mental health counselors could receive bonus payments when practicing in Health Professional Shortage Areas, improving accessibility and reinforcing Medicare mental health coverage in high-need regions.
- Indirect measures: These include Stark Law exemptions, Medicaid demonstration grants, and strategies from the Health and Human Services Secretary to recruit, educate, and retain providers in rural and underserved communities.
Broader Implications for Mental Health Access
If passed, this legislation would significantly broaden Medicare mental health coverage, allowing more Americans to access care from a wider range of providers. By including LMFTs, counselors, and other practitioners, Medicare could meet the needs of seniors and individuals with chronic conditions more effectively. The focus on HBAI services, occupational therapy, and workforce incentives reflects a comprehensive approach to integrating mental health into overall health care.
Next Steps
Senator Wyden has signaled that additional draft legislation is forthcoming, particularly focused on crisis care and implementing mental health parity across federal programs. These measures will complement the expansion of Medicare mental health coverage and further strengthen access to behavioral health services nationwide.
The Senate Finance Committee’s proposals represent a potentially transformative step for Medicare mental health coverage, ensuring that more providers can serve patients and that more Americans receive the care they need—when and where they need it.
