CMS Proposes Behavioral Health Program Changes

5 min

On July 13, 2023, the Centers for Medicare & Medicaid Services (CMS) announced a proposal to significantly expand behavioral health coverage provided under Medicare.[1] The proposal, presented as a part of the calendar year 2024 Medicare Physician Fee Schedule (PFS), would greatly increase the variety of behavioral health offerings under Medicare while also aiming to accurately value the behavioral health services paid for by CMS.[2] These proposals and other changes to the PFS are currently open for public comment.[3]

In announcing the proposals, CMS suggested that the primary factor driving these changes to behavioral health coverage is the need for improved access to mental healthcare and substance abuse treatment.[4] The COVID-19 pandemic saw drastic increases in the rate at which Americans reported symptoms of anxiety, depression, and other mental health disorders.[5] Recent studies have also shown that both the pandemic and quarantine resulted in significant increases in substance abuse throughout the United States.[6] In response to this mental health crisis, CMS is pushing to expand behavioral healthcare coverage as it recognizes many Medicare and Medicaid recipients may be especially susceptible to mental health issues.[7]

CMS currently covers mental health treatments in both inpatient and outpatient settings, and provides prescription drugs used for treating mental health issues. However, there are significant gaps in coverage between these two areas.[8] Certain types of mental health practitioners, such as family therapists and mental health counselors, are currently excluded from enrolling as Medicare providers.[9] And while Medicare currently covers psychiatric hospitalization and outpatient therapy, it fails to cover intensive outpatient programs (IOPs), which are needed when beneficiaries require an intermediate level of attention requiring more than outpatient therapy but which does not rise to the level of hospitalization.[10] Last, there is the problem of access to mental health services in rural and underserved communities, stemming from the shortage of mental health practitioners in these areas and the fact that most mental health practitioners do not accept public funding because of low reimbursement rates.[11]

The 2024 PFS proposal attempts to deal with these issues in a variety of ways. CMS proposes to allow clinical social workers, marriage and family therapists, and mental health counselors to provide health behavior assessment and intervention services through CMS programs. It also proposes to allow licensed professional counselors, addiction counselors, and marriage and family therapists to enroll in Medicare, greatly expanding the access Medicare beneficiaries have to mental health professionals.[12] At the same time, the proposal expands access to providers for those seeking opioid addiction treatment by allowing certain services to be provided through telehealth and audio-only means.[13]

In addition to expanding provider access, the proposal would create a whole new benefit category in the form of an IOP for behavioral health.[14] Not only would this provide beneficiaries with another avenue to receive mental healthcare, but it also allows CMS to better control Medicare spending, as providing an IOP option is likely more cost-efficient than sending beneficiaries to inpatient programs when it may not be required.[15]

In terms of behavioral health spending, the proposal looks to increase payments made under Medicare for crisis care, substance use disorder treatments, and psychotherapy.[16] In particular, the proposal would increase the standard PFS rate by 150% when mental health services are provided outside of traditional healthcare settings in locations where persons are experiencing a mental health crisis.[17] This increase is expected to better reflect the costs associated with providing crisis care services.

If finally adopted, the proposal would also adjust Relative Value Units (RVUs) used in conjunction with psychotherapy codes under the PFS. RVUs are used to value the cost of medical services provided and are adjusted based on geographic areas. The proposal would address distortions CMS believes exist in relation to RVUs used for timed mental health services.[18] These distortion corrections would be implemented in the PFS over the course of a four-year period.[19]

The public comment period for these and other proposals related to updates to the PFS is open until September 11, 2023.[20] Assuming CMS does not undertake any drastic reworking of these proposals following the comment period, providers and Medicare beneficiaries can expect the proposals to be effective on January 1, 2024.[21] It remains to be seen what hurdles CMS may face in the implementation of these proposals, but in an attempt to curb worsening mental health in the United States, the proposals undoubtedly would reshape the Medicare behavioral health landscape through increased provider access and entirely new benefit categories.

If you have further questions about the proposed material transaction bill or need assistance interpreting state regulations, please feel free to contact the authors of this alert or your Venable relationship attorney.

[1] Meena Seshamani, Douglas Jackson, Important New Changes to Improve Access to Behavioral Health in Medicare, CMS Blog (July 14, 2023), (hereinafter Changes to Improve Access).

[2] Id.

[3] Id.

[4] Id.

[5] National Health Institute, Mental Health During the COVID-19 Pandemic (March 20, 2023),

[6] Republican Policy Committee, Substance Use has Risen During COVID-19 Pandemic (March 15, 2022),

[7] Change to Improve Access, supra note 1; Commonwealth Fund, Medicare’s Mental Health Coverage: What’s Included, What’s Changed, and What Gaps Remain (March 2, 2023),

[8] Commonwealth Fund, supra, note 7.

[9] Id.

[10] Changes to Improve Access, supra, note 1.

[11] American Psychiatric Association, National Report Offers Solutions to Overcome the Three Major Obstacles to Rural Mental Health Care (November 18, 20221),,due%20to%20lower%20reimbursement%20rates.

[12] American Counseling Association, CMS Releases Medicare Proposed Rule (July 17, 2023),

[13] Changes to Improve Access, supra note 1.

[14] Robert Holly, CMS Looking to Establish New Behavioral Health Intensive Outpatient Medicare Program, Behavioral Health Business (July 13, 2023)

[15] Id.

[16] Alan Goforth, CMS Advances 2-23 Physician Fee Schedule, Health Equity Agenda: Industry Reacts, Benefits Pro (July 17, 2023),

[17] Changes to Improve Access, supra note 1.

[18] CMS, Calendar Year (CY) 2024 Medicare Physician Fee Schedule Proposed Rule (July 13, 2023),

[19] Id.

[20] Changes to Improve Access, supra note 1.

[21] Id.