Adequate financing is crucial to address the need and demand for behavioral health (BH) services among Medicaid populations. With Medicaid as the dominant payer for BH services, states optimize statutory authorities and other mechanisms to deliver necessary and appropriate care.
As such, Medicaid program financing facilitates access to BH resources, such as psychiatric care, counseling, prescription medications, inpatient treatment, case management, and supportive housing. Institutional or facility-based BH treatment has undergone major changes in treatment approaches as a result of clinical advances, socio-political changes, and an expanding research evidence base. In the last century, deinstitutionalization has shifted financing for inpatient and residential care to states, commercial insurance, or private payers.