The question “What does Medicare cover for mental health?” is about to get more answers. CMS has recently proposed a rule that would establish Medicare coverage of intensive outpatient behavioral health programs to expand access to treatment for people with mental health and substance use disorders.

Under the proposed rule, CMS will define IOP as a distinct outpatient program of psychiatric services provided to individuals with acute substance use disorder or mental illness. These services could be accessed at community mental health centers, hospital outpatient departments, FQHCs, or RHCs.

The proposed rule aims to address the gap in coverage for intensive outpatient services under Medicare, which currently only covers partial hospitalization programs and inpatient psychiatric care. By expanding coverage to IOPs, clients will have more options for receiving intensive mental health and substance use disorder treatment.

This proposal is aligned with the Biden Administration’s efforts to improve access to mental health and substance use disorder treatment and reduce disparities in care. The proposed rule is now open for public comments until September 11, 2023, and is expected to be finalized in 2024.

What This Could Mean for Behavioral Health Agencies

This proposal could have various benefits for mental health coverage Medicare, including:

• Increased demand and patient referrals: Expended Medicare coverage for intensive outpatient programs could lead to increased demand and client referrals to behavioral health agencies. Ramp up your demand with TheraNest Practice Management and EHR.
• Enhanced financial stability: Medicare reimbursement for intensive outpatient services can support the financial stability and expansion of behavioral health agencies by providing a reliable and stable source of revenue.
• Efficient utilization of resources: Medicare coverage for intensive outpatient programs can optimize resource use and reduce strain on inpatient facilities by encouraging clients to seek outpatient care instead of more costly inpatient care.
• Opportunities for collaboration: Increased availability of Medicare-funded intensive outpatient services fosters collaboration between behavioral health agencies and other healthcare providers, enhancing integrated care approaches, improving coordination, and facilitating better patient outcomes.
• Expansion of service offerings: With Medicare coverage, behavioral health agencies can expand and improve their services for Medicare beneficiaries through specialized programs and a wider range of evidence-based interventions.

However, there are concerns that the proposed coverage may not be enough to cover the cost of these services, which could impact the financial viability of behavioral health agencies.

Additionally, the proposal may present administrative challenges for participating behavioral health agencies, including navigating changes in coding, billing, physician certification, and other documentation requirements, which may require additional resources and staff training.

What This Could Mean for People in Need of IOP

This proposal could have significant benefits for clients, as it allows them to access an intermediate level of behavioral health care, providing them with more comprehensive and intensive treatment options.

By covering intensive outpatient programs, CMS helps patients receive the necessary care they need without having to be admitted to an inpatient setting. This flexibility can be particularly beneficial for individuals who may not require 24-hour supervision but still need intensive treatment for their behavioral health conditions.

In addition, the country is currently experiencing a significant issue with mental health and substance abuse. As CMS expands coverage for mental health and substance abuse programs, it empowers more people to seek and obtain the support they require to tackle this growing concern.

The establishment of Medicare coverage for intensive outpatient behavioral health programs aligns with the CMS Behavioral Health Strategy, which aims to improve access to prevention and treatment services for substance use disorders and mental health conditions. This strategy focuses on enabling well-coordinated and integrated care, ensuring that clients receive comprehensive support for their behavioral health needs.

But a potential downside is that the limited coverage may exclude some individuals who would benefit from intensive outpatient programs. There’s already a lot of confusion regarding what Medicare covers for mental health.

CMS establishing Medicare Coverage of Intensive Outpatient Behavioral Health Programs has the potential to make mental health coverage of Medicare and intensive programs more accessible to clients and to bring additional revenue to behavioral health agencies. However, the rule could prove burdensome if the coverage isn’t enough, and agencies should expect to make some administrative adjustments to participate in the program. If your behavioral health agency has comments or concerns, we highly recommend that you provide your feedback while the rule is still open to comments.