March 22, 2023

The CAA and Behavioral Health: Beyond the Unwinding


Meredith Mayeri
Meredith Mayeri
Principal, Mercer Government
Charlie Greenberg
Charles Greenberg
Principal, Mercer Government
Eric Harkness
Eric Harkness
Senior Associate, Mercer Government

Behavioral health, workforce initiatives and other healthcare-related policies

At the end of 2022, Congress passed, and the President signed into law, the Consolidated Appropriations Act of 2023 (CAA). In addition to the typical appropriations across the federal government, the CAA includes multiple policies that impact Medicaid, the Children’s Health Insurance Program (CHIP), Behavioral Health (BH), and the healthcare system more broadly.


This Flash details the policies related to BH, workforce, and other healthcare policies. A previous Flash detailed Medicaid and CHIP provisions and included changes to eligibility policies. 

Leveraging multiple funding sources

For programs without direct Medicaid involvement, there can still be significant overlap with the Medicaid population. Additionally, the Centers for Medicare & Medicaid Services (CMS) is encouraging states to test innovative ways to address health-related social needs (HRSN), potentially expanding opportunities for Medicaid to finance, or at a minimum, partner with currently disparate HRSN-focused programs. The CAA funds a wide assortment of health services programs and programs seeking to meet various HRSN. As a result, even the portions of the CAA that do not directly address Medicaid could directly impact positive outcomes for Medicaid individuals and families.

Note: Unless indicated otherwise, federal matching funds listed throughout this Flash flow from federal agencies other than CMS.

Behavioral health and substance use disorder (SUD)

Community Mental Health Services Block Grant Reauthorization


The CAA reauthorizes the Substance Abuse and Mental Health Services Agency (SAMHSA) Community Mental Health Services Block Grant, increasing funding from $532 million to $858 million annually over the next five years. The program continues to emphasize community-based crisis services, providing funding for crisis call centers, 24/7 mobile crisis services, and crisis stabilization services, though states have broad flexibility in use of the funds.


Crisis Care Services and 988 Implementation


The CAA directs SAMHSA to develop an office to coordinate work relating to BH crisis care across federal departments, including the CMS and the Health Resources and Services Administration (HRSA), as well as external stakeholders. The major objective of the office is to increase access to crisis care providers and services. In addition, SAMHSA is required to publish best practices regarding crisis care within one year of enactment (December 2023).


In 2020, Congress designated 988 as the three-digit dial code (similar to 911) for the National Suicide Prevention Lifeline, which utilizes a network of over 200 local, independent crisis centers to field phone calls and texts. In July 2022, 988 became operational. The CAA includes $506 million to enhance services at these centers and support states in developing sustainability plans, policies, and workgroups to support 988.


Supporting Access to a Continuum of Crisis Response Services


The CAA requires CMS to establish a technical assistance center to help states design, implement, or enhance a continuum of crisis response services for children, youth, and adults in Medicaid and CHIP. It also requires CMS and SAMHSA to issue guidance to states by July 1, 2025 regarding Medicaid and CHIP beneficiaries on activities such as:


  • Establishing and financing a continuum of crisis responses services
  • Using a health equity approach to meet the needs of diverse populations
  • Allowing access to crisis response services utilizing telehealth and without requiring a diagnosis or presumptive eligibility

Investments to Improve Mental Health Outcomes for Patients


The CAA provides:


  • Funding of $94 million for the National Child Traumatic Stress Initiative, an effort by SAMHSA to raise “awareness of the impact of trauma on children and adolescents as a behavioral health concern requiring a healing and recovery process”. This initiative funds 116 universities, hospitals, and community-based organizations working to improve access to trauma‑informed care
  • Grants of $385 million to certified community BH clinics
  • The creation of a center of excellence for eating disorders to provide education and training, funded at $1 million per year through 2027

Substance Use Disorder Services


Overall, the CAA increases SAMHSA’s fiscal year 2023 SUD budget by $203 million to $4.2 billion. This includes $2 billion for the Substance Abuse Prevention and Treatment Block Grant (a $100 million increase) and nearly $1.6 billion for State Opioid Response Grants (a $50 million increase). Other one-time investments include tribal capacity ($55 million) and data collection and evaluation ($79 million).


Over the next five years, the CAA also finances the following additional activities:


  • Grants for tribes to increase availability of BH and SUD services and to fund jail diversion programs
  • Grants to increase expansion of SUD prevention, treatment, and recovery services to unhoused individuals
  • Expansion of targeted investments in primary prevention, integration of SUD services with primary care, and prevention efforts among high-risk groups
  • Repealing of maximum awards to states for the Reducing Overdose Deaths grant program and extending a grant program for overdose reversal medication and education
  • Establishing a grant program to support alternatives to opioids in emergency department settings

Opioid Crisis Response


The CAA incentivizes states to build prescription drug monitoring programs (PDMPs), which are eligible for a 90% federal Medicaid match for development and a 75% federal Medicaid match for operations. It directs the Department of Health and Human Services (HHS) to fund states in accordance with their opioid burden. The CAA also provides $1.75 billion in grants to states and tribes to support:


  • SUD and overdose prevention activities
  • Establishing or maintaining PDMPs
  • Training for healthcare practitioners
  • Provision of SUD-related healthcare services
  • Other state- and tribe-directed activities deemed locally necessary

Recovery Housing


Recovery housing is an important component of meeting HRSNs. The CAA provides grants for states to promote the availability of recovery housing and services. Grants can cover technical assistance, promotion of recovery housing, and maintenance of recovery housing. It also increased annual funding from $3 million to $5 million through 2027.


Removing Stigmatizing Language from Statute


Of note, throughout the sections of U.S. Code affected by the CAA, Congress replaces the term “abuse” with “use” in an effort to reduce stigmatizing language.

Investments in health workforce and rural areas

Behavioral Health Workforce Investments


Recognizing frequent difficulties accessing SUD treatment in medically underserved areas, the CAA provides HRSA nearly $126 million to assign National Health Service Corps members to expand the delivery of SUD treatment services. More generally, the CAA funds HRSA at $6 million for community-based nurse practitioner fellowship programs for primary care and BH providers in Federally Qualified Health Centers (FQHC) and $60 million in matching grants for institutions of higher education in states with projected primary care shortages to expand and maintain physician graduate education.


In addition, the CAA extends the SAMHSA Mental and Behavioral Health Education and Training Grant program through 2027, increasing funding from $10 million to nearly $32 million per year and expanding the list of professions eligible for grants. The CAA also reauthorizes the SAMHSA Minority Fellowship Program through 2027, increasing annual funding from nearly $13 million to $25 million.


Rural Health System Investments


The CAA provides $145 million for the Rural Communities Opioid Response Program, a multi-year initiative by HRSA to address barriers to SUD treatment. The CAA also funds additional support initiatives, including:


Support for Allied and Community Health Workers


As evidence grows demonstrating the effectiveness of community health workers to reduce healthcare costs and improve outcomes (including via Medicaid initiatives), the CAA invests $50 million annually through 2027 in grants to states, tribes, and community-based organizations (e.g., FQHCs) to develop and maintain community health worker activities.


Allied health workers also serve a growing role in the health workforce. The CAA gives HHS discretion to fund awards for increasing educational opportunities for individuals in allied health from under-represented and disadvantaged backgrounds.


Removal of X-Waiver Requirement


The CAA removes the federal requirement that prescribers of medication assisted treatment, such as buprenorphine, obtain a so-called X-Waiver from the Drug Enforcement Agency. The process to receive such a waiver can be extensive, and many have cited that process as a barrier to opioid use disorder treatment access. In its place, the CAA requires prescribers to receive eight hours of training to prescribe controlled substances.

Supports for families and children

Maternal Mental Health


The CAA provides $24 million annually through 2027 in federal matching funds (up to 90% federal share) to states and tribes for screening and treatment for maternal mental health and SUDs and the development of a maternal mental health hotline. Additionally, the CAA establishes a federal task force on maternal mental health and reauthorizes funds for a residential treatment pilot program for pregnant and postpartum women.


Children’s Mental Health


The CAA seeks to strengthen school-based BH services through grants or contracts for technical assistance awarded to private, non-profit entities with demonstrated expertise related to school-based health centers. It also increases the amount of grant funding (from $20 million to $50 million annually through 2027) to public and non-profit human services agencies and non-profits for infant and early childhood mental health promotion, intervention, and treatment. Additionally, it funds a study on co-occurring chronic conditions and mental health, and develops best practices for behavioral and mental health intervention teams.


Continuing Systems of Care for Children and Young Adults


The CAA continues grant awards for comprehensive community mental health services for children with serious emotional disturbances, increasing funding from $119 million to $125 million annually through 2027. The CAA also continues annual funding for SUD treatment and early intervention services for children, adolescents, and young adults, appropriating nearly $30 million per year through 2027.   


Investments in Evidence-Based Home Visiting and Nutrition


The CAA significantly expands the Maternal, Infant, and Early Childhood Home Visiting Program, the largest source of funding for evidence-based home visiting services for expectant and new parents who live in communities that are at risk for poor maternal and child health outcomes. The CAA steps up funding from $500 million in 2023 to $800 million in 2027 and phases in state matching requirements.


As part of a broader $6 billion reauthorization of the Women, Infants, and Children (WIC) nutrition program, the CAA allocates $90 million for breastfeeding peer support counselors at local WIC clinics overseen by state health departments. The CAA also funds the Supplemental Nutrition Assistance Program at nearly $154 billion.

Important next steps for state Medicaid programs

Understanding the constellation of non-Medicaid programs and funding streams that serve the Medicaid population can help states identify new opportunities to improve coordination and outcomes.


In particular, states should consider opportunities for Medicaid to:


  • Finance or (at a minimum) partner with currently disparate HRSN-focused programs.
  • Support a strong health workforce pipeline, including community health workers, allied health, and other professionals serving underserved regions and populations.
  • Improve coordination between Medicaid-funded and block grant-funded BH services to reduce gaps in care.

Questions for your specific state?

Please contact Eric Harkness, Meredith Mayeri, Charles Greenberg or your Mercer consultant to discuss the impact of these new policies for your specific state programs. You may also email us at


View more information at

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