The Centers for Medicare & Medicaid Services (CMS) has made significant strides toward improving access to mental health and substance use disorder (SUD) services for Medicare beneficiaries. One of the latest efforts includes a proposed rule aimed at making behavioral health care more affordable for those enrolled in Medicare Advantage plans. The new rule, which is expected to be published on December 10, is designed to ensure that in-network cost-sharing for behavioral health services does not exceed the cost-sharing levels seen in traditional Medicare. This proposal reflects CMS’s ongoing commitment to making behavioral health care more accessible and equitable for vulnerable populations.
This proposed rule follows a broader trend of CMS prioritizing equitable healthcare access, particularly in the realm of behavioral health. By tackling the high costs associated with behavioral health services in Medicare Advantage plans, CMS is addressing a critical issue that has long impacted Medicare beneficiaries. Additionally, the rule introduces provisions to limit unnecessary prior authorization requirements and curtail practices that could impede access to care. These changes aim to reduce the financial burden on individuals seeking mental health and addiction treatment, ultimately contributing to a more accessible healthcare system for seniors and people with disabilities.
Background on Medicare Advantage and the Need for Change
Medicare Advantage (MA) plans are private insurance plans that offer an alternative to traditional Medicare. These plans cover the same services as Medicare Parts A and B but often include additional benefits, such as vision, dental, and hearing coverage. Since its inception, Medicare Advantage has grown in popularity, with enrollment surpassing 50% of all Medicare beneficiaries in recent years. However, this expansion has also brought attention to the fact that, while these plans offer enhanced benefits, there are significant disparities in cost-sharing for behavioral health services compared to traditional Medicare.
Under traditional Medicare, beneficiaries typically pay a fixed percentage for mental health and SUD services, and these costs are generally more predictable. However, Medicare Advantage plans, which are administered by private insurance companies, have different cost-sharing structures. These differences can sometimes lead to higher out-of-pocket costs for beneficiaries, particularly for those who require ongoing behavioral health care. This disparity has been a source of concern for many advocates, who argue that the increased financial burden may discourage beneficiaries from seeking the care they need.
CMS has recognized this issue and has moved to address it by proposing a new rule that would limit the cost-sharing for behavioral health services in Medicare Advantage plans to the same levels as those in traditional Medicare. By doing so, CMS hopes to ensure that all Medicare beneficiaries have equitable access to mental health and substance use disorder treatment, regardless of the type of Medicare plan they are enrolled in.
Key Provisions of the Proposed Rule
The proposed rule contains several key provisions that are designed to improve access to behavioral health services for Medicare Advantage enrollees. These provisions aim to reduce financial barriers to care, improve transparency, and enhance the overall quality of care provided through Medicare Advantage plans.
1. Capping Behavioral Health Cost-Sharing
One of the most significant aspects of the proposed rule is the requirement for Medicare Advantage plans to limit in-network cost-sharing for mental health and substance use disorder services to no more than the cost-sharing levels in traditional Medicare. This change is expected to provide greater financial predictability for beneficiaries who require ongoing behavioral health treatment, such as therapy or inpatient care.
Medicare Advantage plans would be required to adopt more consistent cost-sharing structures, ensuring that individuals do not face exorbitant out-of-pocket expenses for behavioral health services. As a result, beneficiaries will be more likely to seek and maintain the care they need, without the fear of financial hardship.
2. Reducing the Use of Prior Authorization
Prior authorization has long been a controversial practice in health insurance, and behavioral health care has not been immune to its impact. In many cases, Medicare Advantage enrollees are required to obtain prior authorization for behavioral health services, which can delay care and create administrative hurdles.
CMS’s proposed rule seeks to limit the use of “inappropriate” prior authorization requirements for behavioral health services. This move is designed to eliminate unnecessary delays in care and reduce the administrative burden on both patients and providers. By streamlining the process for accessing care, CMS hopes to improve timely access to services, which is particularly important for individuals facing mental health crises or urgent substance use disorder treatment needs.
3. Transparency in Provider Directories
Another critical provision in the proposed rule is the requirement for Medicare Advantage plans to make provider directory information more accessible. Specifically, plans would be required to update and maintain accurate provider directories that can be easily accessed through the Medicare Plan Finder tool. This will enable beneficiaries to quickly find in-network behavioral health providers and make informed decisions about their care.
The transparency in provider directories is especially important for mental health and SUD treatment, as these services are often more difficult to access than other types of care. By making it easier for beneficiaries to locate providers and confirm their coverage options, CMS is taking a step toward improving the overall patient experience in the Medicare Advantage program.
4. Improving CMS Oversight of Marketing and Communication
In addition to the above provisions, the proposed rule includes measures to enhance CMS’s oversight of Medicare Advantage marketing and communication materials. This is aimed at ensuring that beneficiaries receive accurate information about their coverage options, particularly when it comes to behavioral health services. By providing clearer and more reliable information, CMS hopes to help beneficiaries make better-informed choices about their healthcare plans.
Industry Reactions to the Proposed Rule
The proposed rule has garnered positive feedback from many stakeholders in the healthcare industry, particularly those focused on improving access to behavioral health services. The American Hospital Association (AHA), in particular, praised CMS for its efforts to strengthen consumer protections and ensure that behavioral health care remains affordable for Medicare Advantage beneficiaries.
Ashley Thompson, Senior Vice President at the AHA, commended CMS for recognizing the growing importance of behavioral health access in the Medicare Advantage program. “As enrollment in Medicare Advantage has for the first time reached more than half of all people enrolled in Medicare, it is more important than ever to establish and implement stronger consumer and beneficiary protections,” Thompson said in a statement. She emphasized that CMS’s proposal builds upon prior rulemaking to strengthen limitations on commercial insurers’ use of proprietary coverage criteria, which can sometimes be more restrictive than traditional Medicare.
Many advocates for mental health care access have also expressed support for the rule, highlighting that it is an important step toward reducing the financial barriers that prevent people from seeking care. The cap on behavioral health cost-sharing is seen as a major win for beneficiaries who have struggled with high out-of-pocket costs for mental health and SUD treatment under Medicare Advantage.
Potential Impact on the Behavioral Health Landscape
If the proposed rule is finalized, it could have a significant impact on the behavioral health industry. First and foremost, it could make mental health and substance use disorder services more accessible to Medicare Advantage beneficiaries. By limiting the financial burden associated with these services, CMS is paving the way for greater utilization of behavioral health care, which could lead to better health outcomes for seniors and individuals with disabilities.
The rule could also encourage other insurers and healthcare programs to reevaluate their cost-sharing structures and consider implementing similar measures to make behavioral health care more affordable. Additionally, by addressing the issue of prior authorization, the rule may prompt broader changes in the way health insurers handle access to behavioral health services, reducing administrative barriers and improving the overall experience for patients and providers alike.
Looking Ahead: Next Steps and Implementation
The proposed rule is currently open for public comment, and CMS has requested feedback on a number of issues, including the timeline for implementation and potential impacts on Medicare Advantage plans. The rule is scheduled to go into effect in 2026 or 2027, depending on the outcome of the comment period and further revisions to the proposal.
One of the key considerations for CMS is whether a transition period is necessary to allow Medicare Advantage plans and providers to adjust to the new cost-sharing requirements. Given the complexity of the Medicare Advantage program and the need for coordination among various stakeholders, CMS may opt to implement the changes in phases to minimize disruptions and ensure a smooth transition.
Conclusion
CMS’s proposed rule to cap behavioral health costs for Medicare Advantage members represents a critical step toward achieving more equitable access to mental health and substance use disorder services. By addressing issues related to cost-sharing, prior authorization, and provider transparency, CMS is ensuring that Medicare beneficiaries have better access to the care they need, without facing financial barriers.
As the behavioral health landscape continues to evolve, this rule could serve as a model for other insurers and healthcare programs, promoting broader access to essential services and improving overall health outcomes for vulnerable populations. With the increasing demand for mental health and addiction treatment, CMS’s proposed rule is a timely and necessary response to the pressing need for equitable healthcare in the United States.
