Behavioral Health Coverage Reform

Medicare covers behavioral health services on paper. Whether that coverage translates into care is a different question. For roughly one in four Medicare beneficiaries living with a mental health condition, and for an estimated 1.7 million with a diagnosed substance use disorder, the gap between what the program covers and what they can actually access is shaped by three forces: cost-sharing that varies widely between physical and behavioral health services, a historically thin supply of Medicare-participating behavioral health providers, and a network adequacy framework that CMS has consistently struggled to enforce. The 2024 expansion of Medicare to include marriage and family therapists and mental health counselors represented the most significant change to the behavioral health provider roster in decades. The evolution of telehealth policy in 2025 and 2026 clarified, in ways that matter for long-term access planning, what is permanent and what is not.

MA Behavioral Health Cost-Sharing

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Traditional Medicare charges beneficiaries 20 percent coinsurance on most outpatient mental health services after the Part B deductible, a rate that mirrors physical health cost-sharing at face value. The operational reality in Medicare Advantage is more varied. A 2024 Government Accountability Office analysis of 5,702 MA plans found that at least 70 percent of plans required beneficiary copayments for an individual session with a mental health provider, with a median copay of $30 per session. The plans covered approximately 82 percent of MA beneficiaries.

That $30 median figure masks significant market-level variation. For a beneficiary managing depression with weekly outpatient therapy, a $30 copay per visit translates to $1,560 annually in behavioral health cost-sharing alone, before accounting for medication management visits, psychiatric evaluations, or any inpatient episodes. For a beneficiary on a fixed Social Security income, that cost structure functions as a strong utilization deterrent even before any denial or prior authorization obstacle enters the picture.

The Part A psychiatric hospital benefit carries its own structural burden. A lifetime cap of 190 days in freestanding psychiatric facilities has been embedded in Medicare statute since the program’s inception and reflects no clinical rationale. Beneficiaries admitted to general acute care hospitals face no comparable lifetime limit for psychiatric care. The asymmetry is historical rather than clinical, and it has never been addressed legislatively.

Inpatient psychiatric stays in 2026 carry the standard Part A deductible of $1,676 per benefit period for the first 60 days, with daily coinsurance from day 61 forward. The structure is identical to acute medical admissions, a formal parity that CMS achieved through the ACA phasedown of the old 50 percent mental health coinsurance rate. The coinsurance equalization completed in 2014 was a genuine reform. What it did not change was provider supply, network adequacy, or the more granular cost-sharing structures that MA plans impose at the plan level.

New Provider Types

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On January 1, 2024, marriage and family therapists and mental health counselors became eligible to bill Medicare Part B for the first time. The authority derives from the Mental Health Access Improvement Act, enacted as part of the Consolidated Appropriations Act of 2023. CMS estimated at implementation that approximately 400,000 MFTs and MHCs would be eligible to enroll as Medicare providers.

The enrollment pathway requires a master’s or doctoral degree meeting state licensure standards, at least two years or 3,000 hours of post-degree supervised clinical experience, and active state licensure. CMS opened enrollment in November 2023, with billing effective dates no earlier than January 1, 2024. MFT and MHC services billed to Medicare are reimbursed at 75 percent of the clinical psychologist rate under the Physician Fee Schedule.

That 75 percent rate has practical consequences. The national reimbursement rate for the psychiatric diagnostic evaluation code CPT 90791 fell from $195.46 in 2024 to $166.91 in 2025, a reduction of approximately 14.6 percent, driven primarily by a reduction in the PFS conversion factor to $32.3465. For MFTs and MHCs, who receive 75 percent of that already-reduced psychologist rate, the effective per-visit payment is substantially below what Medicaid or commercial payers typically offer. The gap between Medicare rates and commercial rates is a persistent deterrent to broad enrollment at scale.

The stated access promise behind the 2024 expansion was the addition of a large underutilized workforce to the Medicare provider pool, including addiction counselors meeting MHC criteria. In practice, the distance between provider eligibility and active Medicare participation has historically been large across all provider types. CMS has not published enrollment tallies that would allow a current comparison between the estimated 400,000 eligible providers and the number who have actually completed enrollment, credentialed with plans, and begun submitting claims. That gap is likely substantial, given the administrative burden of the Medicare enrollment process and the reimbursement differential that makes Medicare a lower-priority payer for many private practitioners.

The 2025 PFS rule continued a phased increase in valuation for timed mental health services billed by MFTs and MHCs, a trajectory CMS began in 2024. CMS also expanded eligibility for behavioral health integration service codes to more provider types, and added codes for opioid use disorder treatment. These are incremental improvements to a rate structure that remains below commercial parity.

The Telehealth Picture

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The telehealth policy environment for behavioral health services clarified considerably through 2025 and early 2026. The Consolidated Appropriations Act of 2021 permanently removed geographic and originating site restrictions for behavioral and mental health telehealth in Medicare. Beneficiaries can receive behavioral health telehealth services in their homes, from any location, and the restriction requiring patients to travel to a rural facility to receive telehealth disappeared. Audio-only behavioral health telehealth is also permanently authorized, subject to CMS documentation requirements when patients decline or cannot use video, a provision that addresses rural beneficiaries without broadband access and homebound patients without caregivers who can manage video technology.

The in-person visit requirement for behavioral health telehealth services, which would have required a face-to-face visit within six months of initiating mental health telehealth care and annually thereafter, is suspended through December 31, 2027, under the Consolidated Appropriations Act of 2026. This is particularly important for new behavioral health patients who initiate care via telehealth, including those in rural markets or with mobility limitations who would face a meaningful access barrier if required to establish care in person first.

The non-behavioral health telehealth flexibilities are in a different position. Home as originating site, no geographic restrictions, and audio-only services for non-behavioral health services have been extended through December 31, 2027, under the same legislation. Those were temporary pandemic-era provisions that required repeated congressional action to preserve. The contrast with behavioral health telehealth, where the permanent policy regime is more fully established, reflects a deliberate legislative sequencing that advocates have pursued for years.

The period from September 30 to November 12, 2025, when the government shutdown lapsed telehealth coverage briefly, illustrated the access impact of policy uncertainty in stark terms. A policy analysis published during the shutdown estimated a 24 percent drop in telehealth utilization in the first 17 days, with Florida, Louisiana, and New York seeing declines above 40 percent before retroactive coverage was restored. For behavioral health specifically, even a short coverage gap can rupture therapeutic relationships and interrupt medication management in ways that have downstream clinical and cost consequences.

The Access Gap

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The expansion of covered provider types and the stabilization of telehealth policy address the supply and delivery sides of the behavioral health access problem. They do not address the network adequacy side, where the evidence is considerably more damaging.

In October 2025, the HHS Office of Inspector General published a data brief examining behavioral health provider networks across 40 Medicare Advantage plans and 20 Medicaid managed care plans in 10 counties across five states. The findings documented a systemic problem. On average, 55 percent of behavioral health providers listed in MA plan network directories had not provided a single service to enrollees in 2023. In more than half of the MA plans studied, at least one-third of listed providers were inactive. OIG found that 72 percent of those inactive providers should not have been listed at all, because they no longer worked at the addresses in the directory, had indicated they would not see patients enrolled in the plan, or had never agreed to be network providers.

An earlier OIG analysis found fewer than five active behavioral health providers available per 1,000 enrollees across traditional Medicare, MA, and Medicaid managed care combined. The ghost network problem, which the insurance industry has faced litigation over from Elevance Health and others, reflects a set of underlying incentives that directory accuracy rules alone cannot fix. Providers cited two primary reasons for declining to participate actively in MA behavioral health networks: administrative burden and low reimbursement rates. Both are structural, not incidental.

The rural behavioral health desert compounds the directory inaccuracy problem. In counties with no Medicare-billing behavioral health specialists regardless of what a plan’s directory says, coverage is notional. A beneficiary in a rural county may face a network directory listing providers in a distant urban county, providers who do not accept new patients, or telehealth-only options that depend on broadband access the beneficiary may not have. The 2021 elimination of geographic restrictions for behavioral health telehealth addresses the last scenario directly, but it does not create providers where none exist.

CMS’s response to the OIG recommendations was partial. The agency indicated it had taken steps aligned with the recommendations and planned additional action, but did not formally concur with the specific directives to use encounter data to identify and de-list inactive providers from MA directories. Network adequacy enforcement for behavioral health remains the enforcement gap that links every other reform in this space. The Mental Health Access Improvement Act creates the supply. The telehealth permanence creates the delivery channel. Neither produces access if the network reporting infrastructure remains inaccurate and the compliance posture remains soft.

Related Reading

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MCR-03_06 Telehealth at the Crossroads: Permanence, Benefit Design, and the Rural Access Divide MCR-05_05 ACOs and the Whole-Person Care Imperative: Behavioral Health, Oral Health, and SUD Integration