With the aging population rapidly expanding, the United States faces a growing public health challenge: meeting the mental health and substance use needs of older adults. According to the CDC, nearly 20% of adults over age 55 have experienced a behavioral health issue. In response, the Centers for Medicare and Medicaid Services (CMS) are taking steps to reshape Senior Behavioral Health Care through expanded services, workforce changes, and a stronger emphasis on value-based care.
Mental health and substance use disorders in elderly populations are becoming increasingly recognized, not only as clinical issues but also as system-level concerns. Unfortunately, this rise comes at a time when the behavioral health workforce is facing critical shortages. Dr. Katherine Hobbs, founder and CEO of Author Health, highlighted this need during Behavioral Health Business’ VALUE event, stating, “Opening up access to different types of providers and different types of services is critically important for us to be able to meet the future need.”
Author Health, a hybrid behavioral health provider serving seniors with Medicare Advantage, recently secured $115 million in its debut funding round—an indication of both market demand and investment interest in Senior Behavioral Health Care solutions.
CMS Initiatives: Expanding Access and Options
CMS has implemented several major initiatives aimed at increasing access to behavioral health providers and modernizing the system. One significant step forward was the agency’s decision to allow marriage and family therapists (MFTs) and mental health counselors (MHCs) to enroll in Medicare, opening the door to thousands of new professionals who can serve this aging demographic.
Michelle Guerra, clinical programs manager at Premera Blue Cross, sees promise in this move, especially for rural areas with limited psychiatric care. “Adding these providers, hopefully, will increase access,” she said, noting that many communities lack both psychiatrists and psychologists. However, she also cautioned that roughly 20-30% of counselors do not take any insurance, meaning Medicare beneficiaries may still struggle to find timely care despite the policy change.
While this isn’t a cure-all, it’s a crucial step forward. By expanding the types of professionals eligible for reimbursement, CMS is laying the groundwork for a broader and more flexible Senior Behavioral Health Care system.
Intensifying Treatment with IOPs
In addition to increasing the provider pool, CMS is also expanding covered services. One major advancement is the inclusion of Intensive Outpatient Programs (IOPs) in Medicare coverage. These programs, which offer a higher level of care than standard outpatient services, are now accessible to Medicare beneficiaries—at least in certain qualified settings.
Dr. Lori Ryland, chief clinical officer of Pinnacle Treatment Centers, explained that making IOPs available through Medicare is “extremely important.” Still, there are caveats: these services must be delivered in specific settings such as hospitals, community mental health centers, or opioid treatment programs. This restriction excludes many facilities, especially those focused on treating alcohol use disorder.
Despite these limitations, IOP availability represents another key advancement in Senior Behavioral Health Care, offering a bridge between outpatient and inpatient care for older adults who need more intensive treatment but don’t require hospitalization.
Prevention, Screening, and Navigation: A New Emphasis on Upstream Care
In its 2025 budget proposal, the Biden administration continues to prioritize behavioral health for seniors, including $8.1 billion allocated to the Substance Abuse and Mental Health Services Administration (SAMHSA). Part of this funding will support suicide prevention efforts targeting older adults.
CMS is also pushing prevention and early intervention as part of its long-term strategy. Medicare now covers navigation services to reduce the social barriers to care, while screenings for tobacco use and depression are increasingly common. However, gaps remain. While tobacco users are offered free cessation counseling following a positive screen, those who screen positive for depression receive no complimentary follow-up therapy sessions.
This discrepancy points to opportunities for CMS to deepen its commitment to Senior Behavioral Health Care by aligning coverage with screening results and offering more proactive interventions. As Guerra noted, “The scaffolding is there. The opportunity is there. I would really like to see Medicare go the little extra step of bringing in some free sessions to support depression.”
The Push Toward Value-Based Care
At the heart of CMS’s long-term strategy is a transition to value-based care—an approach that ties reimbursement to patient outcomes rather than volume of services. This model has seen success in physical health care and is increasingly being applied to behavioral health as well.
Dr. Hobbs emphasized that the infrastructure for value-based models already exists in Medicare. “There have been major advances in value-based reimbursement and value-based care delivery within Medicare,” she explained. “Measures like the PHQ-9 and GAD-7, as well as Medicare-specific tools like HEDIS, allow us to monitor and reward quality in behavioral health.”
These tools are essential in shaping a future where Senior Behavioral Health Care is not only accessible but also accountable. They create a data-driven foundation that can support better outcomes, more efficient services, and improved patient satisfaction.
However, gaps still remain. For instance, residential addiction treatment is not covered under Medicare, and there is a cap on lifetime inpatient behavioral health stays. These coverage limitations can hinder progress toward a fully integrated, value-based system.
Looking Ahead: Meeting the Needs of a Changing Population
The future of Senior Behavioral Health Care will depend on continued innovation, policy flexibility, and provider participation. CMS has made real progress—expanding covered services, including more provider types, and experimenting with new reimbursement models. But it’s clear that more must be done to address the unmet mental health and substance use needs of older adults.
For providers, payers, and policymakers alike, this is a pivotal moment. An aging population with increasingly complex behavioral health needs demands bold action, ongoing investment, and a commitment to equitable access to care.
As Michelle Guerra aptly put it: “I’m going to wait and see how many providers take up the mantle and accept the Medicare payment rate.” The success of these efforts will ultimately depend not just on policy, but on real-world implementation, collaboration, and a shared vision for what Senior Behavioral Health Care should look like in the years to come.
Key Takeaways
- Nearly 1 in 5 seniors experience behavioral health issues
- CMS is expanding provider eligibility and coverage options
- Intensive outpatient programs are now covered under Medicare
- There is growing support for value-based care models
- Gaps remain in provider participation, residential care, and prevention follow-through
