The U.S. Centers for Medicare & Medicaid Services (CMS) is considering a major policy change aimed at expanding access to behavioral health services nationwide. Under the proposed updates to the Notice of Benefit and Payment Parameters for 2024, mental health facilities and substance use disorder treatment centers could be designated as essential community providers (ECPs). This designation would require health plans offered through federal and state-based marketplaces to include these providers in their networks.
If passed, the proposal could significantly improve patient access to behavioral health services and reduce barriers that have long challenged the behavioral health system. Michelle Guerra, a senior consultant in population health and health equity at RTI Health Advance, told Behavioral Health Business that the potential impact is substantial. “First, it would expand access to behavioral health care for members on marketplace plans. And second, it sends a clear message that behavioral health is an essential type of health care, reducing stigma around behavioral health,” Guerra explained.
Expanding Coverage for Millions
The proposal could affect roughly 14.5 million people enrolled in marketplace health plans, the majority of whom do not qualify for Medicare, Medicaid, or CHIP coverage. As states complete Medicaid eligibility redeterminations following the end of the public health emergency (PHE), this number is likely to grow. Many individuals could transition from Medicaid coverage to marketplace plans, highlighting the need for accessible behavioral health services.
One of the potential benefits of this proposal is the reduction of out-of-network behavioral health facilities. Research from risk-management firm Milliman shows that behavioral health facilities are five times more likely to be out of network than medical surgical inpatient facilities. By increasing the number of in-network essential community providers, patients could see reduced out-of-pocket costs and improved access to care, addressing a longstanding challenge in the behavioral health sector.
Implications for Health Plan Payers
The proposed ECP expansion is not only significant for patients—it also carries implications for health plan payers. In order to comply with the new requirements, payers may need to strengthen relationships and contracts with mental health and substance use disorder providers, including facilities that were previously unwilling or unable to participate due to low reimbursement rates or administrative barriers.
Guerra noted, “It is a chance for payers and non-network facilities to come back to the table and work out a contract that can meet both parties’ needs. Payers likely will need to be more flexible in their contracting efforts to bring more of these essential community providers on board, such as considering higher reimbursements or other incentives.” By offering more attractive contract terms, payers can ensure that patients have access to the behavioral health services they need while also integrating providers who may have previously been excluded.
Expanding Provider Participation
The proposal also seeks to broaden participation thresholds for other types of essential community providers. Currently, federally qualified health centers (FQHCs) and family planning providers (FPPs) are among the six provider types designated as ECPs, and CMS proposes expanding the required 35% participation threshold for these organizations. Many FQHCs and FPPs already offer integrated behavioral health services or maintain partnerships with community-based behavioral health providers. By increasing payer contracting with these organizations, access to behavioral health services could be significantly expanded, helping close the gap between demand for care and the limited supply of providers.
Streamlining Marketplace Enrollment
Beyond the ECP designation, the proposal includes measures to simplify enrollment in marketplace health plans. Individuals losing Medicaid or CHIP coverage would have the opportunity to enroll in a marketplace plan 60 days before or 90 days after losing coverage. This flexibility is critical as up to 18 million people are at risk of losing Medicaid coverage following the end of the PHE. Research from the Urban Institute predicts that roughly 4 million adults could lose coverage, along with 3.2 million children transitioning from CHIP to other health plans.
By making it easier for individuals to transition between coverage types, CMS aims to ensure continuity of care and reduce gaps in access to essential behavioral health services. This is particularly important for populations managing chronic mental health conditions or substance use disorders, for whom interruptions in care can have severe consequences.
Broader Federal Efforts to Expand Behavioral Health Access
This proposal is part of a broader federal effort to expand access to behavioral health care for Medicare and Medicaid beneficiaries. Earlier this month, CMS introduced a proposal for Medicare Advantage (MA) plans to add psychologists, licensed clinical social workers, and prescribers of medication for opioid use disorder (OUD) to the list of evaluated specialties under MA. The proposal also includes new behavioral health wait-time standards, ensuring patients can access care in a timely manner.
CMS has also finalized rules allowing behavioral health providers to bill for services provided by licensed professional counselors (LPCs) and licensed marriage and family therapists (LMFTs). Additionally, hospital outpatient departments can now bill for in-home telebehavioral health services. These changes are designed to improve access to care, enhance service delivery, and reduce administrative barriers that have historically limited the availability of behavioral health treatment.
Addressing Longstanding Challenges
Behavioral health care has historically faced multiple challenges, including workforce shortages, limited insurance coverage, and stigma associated with mental health and substance use treatment. By designating behavioral health facilities as essential community providers, CMS is signaling that mental health and substance use disorder care are critical components of overall health. This could encourage more providers to join networks, increase in-network availability, and reduce the cost burden on patients seeking care.
For health plans, the proposal presents an opportunity to rethink contracting strategies and build partnerships that better meet the needs of their members. For patients, it could mean easier access to mental health and substance use services, lower costs, and a smoother transition between coverage types. For the behavioral health industry, it sends a strong message about the essential nature of these services and the federal commitment to expanding access to care.
Looking Ahead
While the proposal is still under review, its potential impact is significant. Expanding access to behavioral health services through essential community providers, increasing participation thresholds for FQHCs and FPPs, and streamlining marketplace enrollment could collectively reshape how millions of Americans access mental health and substance use care.
By addressing both patient access and provider participation, CMS is taking meaningful steps to close the gap between behavioral health care demand and supply. If adopted, the changes could help reduce stigma, encourage payer-provider collaboration, and ensure that behavioral health is recognized as an essential component of comprehensive health care.
