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Provides a temporary enhanced federal Medicaid matching rate of 90% for state increases in spending on behavioral health services (mental health and substance use) measured against quarterly baselines from 2019, contingent on limits that require the funds to supplement—not supplant—state funding and to be used to expand capacity, quality, and efficiency (for example, raising provider payment rates and reducing staff turnover). The Department of Health and Human Services must issue guidance defining qualifying behavioral health services and must deliver an annual report to Congress on state payment rates, the rationale for those rates, and utilization of behavioral health services under Medicaid.
The bill expands access and quality of Medicaid behavioral health services through a large federal match and greater transparency, improving care for beneficiaries but increasing federal costs, administrative burdens, and risks of state fiscal gaming or strain.
Medicaid beneficiaries (including people with mental health and substance use disorders) will see expanded behavioral health services because the federal government covers 90% of state increases in behavioral health spending.
Medicaid patients and behavioral health providers may experience better access and quality of care as states have stronger financial incentives to raise provider payment rates and reduce staff turnover.
State governments receive federal aid that reduces their budget burden for expanding behavioral health services, freeing state funds for other priorities.
Taxpayers may face higher federal spending and potential long-term budget costs from the permanent or extended 90% federal match for increased behavioral health spending.
Preparing and complying with maintenance-of-effort, supplement‑not‑supplant requirements, and new annual reporting will increase administrative burden and reduce flexibility for state governments and increase workload for HHS, potentially diverting resources from oversight and service delivery.
If federal reports prompt pressure to change payment rates without providing additional funding, states could face fiscal strain and may reduce other services or benefits, which would harm Medicaid beneficiaries.
Introduced July 23, 2025 by Paul Tonko · Last progress July 23, 2025