News & Perspectives

CMS issues guidance on Medicaid behavioral health delivery system reform

16. November 2018 Tom Entrikin Health

On November 13, 2018, the Centers for Medicare and Medicaid Services (CMS) released a letter to state Medicaid directors outlining a wide range of opportunities for states to design innovative delivery systems for adults and children with serious mental health conditions.

The CMS letter offers guidance on strategies to improve care for such individuals using Medicaid State plan provisions, managed care contracts, health homes, and demonstration waivers. It examines current research on the importance of early identification in schools of children and adolescents who are at risk of developing mental health conditions, the need for effective strategies to engage such individuals in appropriate treatment as soon as possible, and the potential benefits of innovative services that can be covered via the state Medicaid plan and managed care capitation rates, such as crisis stabilization and peer supports. The letter also notes that key activities such as behavioral health outreach usually cannot be covered directly as a Medicaid state plan service, but that the cost of such activities can be included in calculating Medicaid administration costs and in Medicaid provider rate setting for other Medicaid covered services. 

The CMS letter is available here: