New government findings highlight critical gaps in behavioral health access for Medicare and Medicaid

Access to behavioral health care remains a persistent challenge for millions of Americans, particularly when it comes to behavioral health access for Medicare and Medicaid beneficiaries. Low-income and elderly populations relying on these government programs face significant barriers. A recent in-depth report from the Office of Inspector General (OIG) within the U.S. Department of Health and Human Services (HHS) highlights stark shortages of behavioral health providers serving these beneficiaries, raising concerns about the availability and utilization of mental health and substance use disorder services in both urban and rural counties.

The scope of the problem: limited provider participation and low utilization

The OIG’s report analyzed data from 20 counties—10 rural and 10 urban—across 10 different states during the 2021 calendar year. It focused on several key metrics related to behavioral health access for Medicare and Medicaid: the share of behavioral health providers who are actively seeing patients enrolled in Medicare, Medicare Advantage, or Medicaid; the ratio of these providers to enrollees; utilization rates of behavioral health services; and the split between telehealth and in-person care visits.

• Only about one-third of behavioral health providers in these counties accepted patients from these government programs: specifically, 29% accepted traditional Medicare patients, 33% accepted those enrolled in Medicare Advantage plans, and 38% accepted Medicaid beneficiaries.
• Utilization rates of behavioral health services were notably low: only 8% of Medicaid enrollees received behavioral health treatment in 2021, and the numbers were even lower for Medicare and Medicare Advantage enrollees, with less than 4% receiving services.
• This disparity suggests that despite the high prevalence of behavioral health conditions—estimated at one in five adults nationwide—many individuals are unable to access care, often due to the limited availability of providers participating in these programs.

Rural vs. urban disparities in behavioral health access for Medicare and Medicaid

One of the most striking findings concerns the disparity between rural and urban counties regarding behavioral health access for Medicare and Medicaid:

• On average, rural counties had fewer than two active behavioral health providers per 1,000 enrollees across Medicare, Medicare Advantage, and Medicaid, compared with around four to seven providers per 1,000 enrollees in urban counties.
• Traditional Medicare and Medicaid programs saw the lowest provider-to-enrollee ratios, exacerbating access challenges for many beneficiaries.
• Moreover, many rural counties lacked even a single behavioral health provider able to prescribe medications under these programs, limiting access to vital psychiatric medications and integrated care.

Utilization patterns: limited engagement despite high need

The report also examined the average frequency with which beneficiaries engaged with behavioral health providers, an important aspect of behavioral health access for Medicare and Medicaid populations:

• Most enrollees saw only one behavioral health provider throughout the year, rather than accessing a range of services.
• The average number of visits per year varied by program: Medicare beneficiaries saw providers about eight times annually, Medicaid enrollees around six times, and Medicare Advantage enrollees about five times.
• Such limited engagement points to potential gaps in continuity and comprehensiveness of care, which are essential for effective treatment of mental health and substance use disorders.

Telehealth’s growing but uneven role in behavioral health access for Medicare and Medicaid

The COVID-19 pandemic accelerated the adoption of telehealth services, which offered an important avenue for behavioral health access for Medicare and Medicaid beneficiaries—especially where provider shortages and transportation barriers exist. The report reveals that:

• About three-quarters of beneficiaries saw a provider in person at least once during 2021.
• Between one-half and two-thirds of beneficiaries also used telehealth, either exclusively or in combination with in-person visits.
• Telehealth use was much higher in urban counties compared to rural areas, highlighting ongoing digital divide challenges affecting access for rural beneficiaries.

Why are behavioral health providers not serving Medicare and Medicaid beneficiaries?

Several well-documented reasons contribute to this troubling shortage of behavioral health access for Medicare and Medicaid patients:

• Administrative burden: providers often face complex credentialing, billing, and prior authorization processes with government programs that can discourage participation.
• Low reimbursement rates: payment levels for behavioral health services under Medicare and Medicaid frequently lag behind those from private insurers, reducing financial incentives to serve these populations.
• Workforce shortages: nationwide shortages of psychiatrists, psychologists, counselors, and other behavioral health professionals limit capacity overall.
• Network adequacy challenges: many Medicare Advantage and Medicaid managed care plans struggle to meet network adequacy standards for behavioral health, leading to “phantom networks” where providers listed as available are actually inaccessible.

Government and CMS responses: steps toward improving behavioral health access for Medicare and Medicaid

CMS recognizes these barriers and concurs with OIG’s findings and recommendations. Over recent years, the agency has introduced several key initiatives to enhance behavioral health access for Medicare and Medicaid beneficiaries:

• Expanding the behavioral health workforce: starting in 2023, CMS began reimbursing services provided by licensed marriage and family therapists (LMFTs) and mental health counselors under Medicare, effectively broadening the pool of eligible providers.
• Strengthening network adequacy: CMS finalized policies requiring Medicare Advantage plans to include licensed clinical social workers and clinical psychologists in their network adequacy standards and to meet specific wait-time requirements.
• Care coordination enhancements: Medicare Advantage organizations must now incorporate behavioral health services into their care coordination programs to ensure whole-person care.
• Telehealth flexibility: temporary COVID-era waivers have expanded telehealth access for behavioral health services, and CMS is advocating for the continuation of these flexibilities beyond the public health emergency period.

Recommendations from the office of inspector general

The OIG report urges a comprehensive approach to increasing behavioral health access for Medicare and Medicaid beneficiaries:

1. Encourage more providers to serve Medicare and Medicaid patients through better payment rates, reduced administrative barriers, and incentives for participation.
2. Expand coverage to additional provider types to tap into the broader behavioral health workforce, including LMFTs, counselors, and peer support specialists.
3. Use network adequacy standards to drive provider availability, holding Medicare Advantage and Medicaid managed care plans accountable for maintaining accessible, robust behavioral health networks.
4. Increase monitoring of service use and network gaps to better identify underserved populations and hold plans accountable for transparency and accuracy in provider directories.

Conclusion: the path forward for behavioral health access for Medicare and Medicaid

The report’s findings come at a crucial moment when mental health and substance use disorders affect a growing portion of the population, especially vulnerable seniors and low-income individuals who depend on Medicare and Medicaid for care. Addressing provider shortages and network adequacy is essential not only to reduce unmet behavioral health needs but also to prevent worsening outcomes such as hospitalizations, emergency room visits, and untreated chronic conditions.

Sustained commitment from federal agencies, state governments, payers, and providers is needed to improve behavioral health access for Medicare and Medicaid beneficiaries nationwide. Expanding provider participation, leveraging telehealth, and improving network transparency will be key to ensuring that America’s most vulnerable populations receive the behavioral health care they urgently require.

If you or someone you know relies on Medicare or Medicaid for behavioral health services, staying informed about these changes can help in advocating for better care and access.