The Centers for Medicare and Medicaid Services Expands Medicare Behavioral Health Providers; Implications for State Medicaid Agencies  

Tucked into the CY 2024 Medicare Physician Fee Schedule Final Rule and CY 2024 Medicare Hospital Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Payment System Final Rule, released at the end of last year and authorized by the Consolidated Appropriations Act, 2023, was a long-awaited change to the pool of Medicare-enrolled behavioral health providers. Years of failed attempts in Congress to expand the types of these providers available to Medicare beneficiaries continued to exacerbate the strain on both providers with large patient rosters and patients in need of these vital services. While Medicare enrollees could get access to many of the same services through other provider types, the exclusion of certain clinicians resulted in significant access issues. For beneficiaries, the result was an inability to find a provider who was Medicare-enrolled, long waits for psychologist or social worker appointments, or foregoing care altogether.  

Prior to this rule, the only provider types allowed to provide office-based behavioral health care were:  

• • Psychiatrists or other doctors 
  • Clinical psychologists 
  • Clinical social workers 
  • Clinical nurse specialists 
  • Nurse practitioners 
  • Physician assistants 

Beginning with the release of these final rules, Medicare opened enrollment for marriage and family therapists (MFT), and mental health counselors (MHC). Intensive outpatient program (IOP) services, which are a new type of partial hospital service, were also introduced. These providers may begin billing for services on January 1, 2024. In response to a comment in the final rule, the Centers for Medicare and Medicaid Services (CMS) noted that addiction, alcohol, and drug counselors who meet qualification requirements for mental health counselors, will also be allowed to provide Medicare services in the future.   CMS is finalizing their proposal for these additional providers. 

Impacts to Medicaid for Dual Eligibles 

The impact of the prior policy and this new rule extends beyond Medicare enrollees and providers. Medicare’s prior restriction of these provider types put State Medicaid Agencies (SMA) in a tight spot related to Coordination of Benefits (COB) policies. Per federal regulation, SMAs cannot pay for services that are already covered by another legally-liable party, also known as the “payer of last resort” provision. The challenge was that while Medicare covered many of the necessary behavioral health services, only a limited number of providers could bill for those services, unlike Medicaid programs which, in many cases, offer extensive behavioral health services and enroll many different types of clinicians to provide them. Prior to this rule, SMAs may or may not have assumed primary liability for some of the services that would otherwise be covered by Medicare except for the fact that they were delivered by excluded provider types.  

CMS provided clarity on that in an informational bulletin issued on December 14, 2023, subsequent to the release of the final rule, detailing how this change impacts SMA COB and third party liability processes.  With the addition of MFTs, MHCs, and IOPs, participation in Medicare, payment liability shifts wholly to Medicare for dual eligibles for applicable services.  

As with most new policies, there is an inherent delay caused by the implementation process, in this case, enrolling new providers. Understanding this, the informational bulletin provides interim operational processes to help guide SMAs with this transition.  

• • Medicare will process claims for payment from MFTs, MHCs, and IOPs beginning with dates of service January 1, 2024, and forward. Claims before that date are not reimbursable by Medicare from these providers. 
  • To maintain continuity of care for beneficiaries, it is recommended that States contact their Medicaid-enrolled MFTs, MHCs, and IOP service providers to advise them to enroll in Medicare as quickly as possible. 
  • States that cover services delivered by MFTs, MHCs, and IOPs must pay claims for dual eligibles if those providers are Medicaid-enrolled but not yet Medicare-enrolled or if the provider chooses not to enroll in Medicare. 
  • As providers are pursuing Medicare enrollment, states will need to determine how to process claims for dual eligibles when billed by Medicaid-enrolled providers until they are Medicare-enrolled. There are several ways this could be operationalized. A combination of these options may be preferable to cover a range of possible scenarios, and the informational bulletin provides recommendations for each option. 
  • Adjudicate claims as they are submitted by ensuring claims are not rejected for COB or suspend claims in question until the provider is Medicare-enrolled. Any claims that Medicaid pays that later become Medicare covered must be recouped through normal pay and chase procedures. 
  • Have providers hold claims submission until they are Medicare-enrolled and can bill Medicare primary. The provider can then submit the claim to Medicaid or crossover automatically. 

States that utilize managed care for the delivery of these services should also engage and consult with their managed care plans to determine the most feasible strategy aimed at maintaining consistency and minimizing disruption across the program’s payers. Impacts to capitation rate development and managed care behavioral health and substance use parity requirements should also be part of a holistic implementation approach for these services.