Center for Financing Reform & Innovation (CFRI)

Learn about behavioral health financing mechanisms, options, and innovations through CFRI reports and webinars.

What is CFRI?

The Center for Financing Reform and Innovation (CFRI) is committed to strengthening America’s mental health and substance use service system, by improving how the nation funds and delivers vital services. CFRI offers a dynamic platform to tackle today’s most urgent behavioral health issues head-on. Through clear analysis and strategic guidance, CFRI promotes the smart, efficient use of resources that strengthen prevention, early intervention, treatment, and recovery to build a healthier, stronger America.

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What’s New

Youth Inpatient and Residential Treatment Psychiatric Beds

Between 2010 and 2022, most states saw troubling declines in the number of youth in inpatient and residential psychiatric treatment facilities. Seventy-nine percent of states experienced a reduction in the number of youth in inpatient facilities, and 94 percent experienced a reduction in the number of youth in residential facilities. While further research is needed to understand the drivers behind these trends, the declines highlight an urgent need to strengthen the youth mental health infrastructure, expand access to a full continuum of care, and ensure that every child and family can receive timely support. These analyses draw on national surveys of mental health facilities and state mental health authorities.

Download the one-pager: Youth Inpatient and Residential Treatment Psychiatric Beds

Use of Alternative Payment Models for Substance Use Disorder Prevention: A Conceptual Framework

Alternative payment models (APMs) are a promising path for financing substance use disorder (SUD) prevention programs. APMs are extensively used to improve the value and quality of health care. While there is increasing use of APMs for SUD treatment services, they are rarely used for SUD prevention. In 2023, SAMHSA convened an expert panel to refine a conceptual framework for using APMs for SUD prevention and to identify strategies to encourage their adoption. The conceptual framework is a viable method for financing a variety of prevention programs across populations and settings.

Download the two-pager: Use of Alternative Payment Models for Substance Use Disorder Prevention in the United States: A Conceptual Framework

Coverage of Selected Behavioral Health Services among Older Medicare and Medicaid Beneficiaries

The prevalence of behavioral health problems among older adults (65+) is on the rise. Although Medicare, Medicare Advantage, and Medicaid provide coverage for mental health and substance use disorder services, there are gaps in eligibility requirements and additional out-of-pocket costs that differ across payer sources. This report analyzes costs and disparities for key behavioral health services among older adults enrolled in Medicaid, Medicare, or Medicare Advantage.

Download the report: Coverage of Selected Behavioral Health Services Among Older Medicare and Medicaid Beneficiaries

Financing Measurement-Based Care in Community Behavioral Health Settings

Measurement based care (MBC) for behavioral health care is a clinical process that uses standardized measurements to track a client’s progress over time that inform shared patient-provider treatment planning and decision-making. One significant challenge to the broader adoption of MBC is financing. This report uses analyses based on discussions with payers, policy makers, financing experts, and providers and an environmental scan to explore MBC reimbursement options and to identify challenges and potential solutions for increasing use of MBC across diverse community behavioral health care settings.

Financing Peer Crisis Respites in the United States

Financing Peer Crisis Respites in the United States highlights the benefits of peer crisis respites within the recovery-oriented continuum of crisis care and identifies common components, operations, and funding of peer crisis respites in a national sample of programs across the United States.

BestPractices4Data: Sharing Innovations and Best Practice for Grantees, from Grantees

The BestPractices4Data includes six (6) issue briefs that share innovative and best practices from grantees, for grantees, that seasoned grantees use to address the most common and complex challenges associated with grantee required data collection activities. The series aims to improve efficiency in the use of grant funds by providing opportunities for grantees to learn from one another on how to reduce costs and optimize the data collection processes.

Financing Peer Recovery Support: Opportunities to Enhance the Substance Use Disorder Workforce
This report provides background history of the development of Peer Recovery (PR), including an overview of the current landscape of PR Programs. This report also provides a description of the variation in peer recovery rates, supervision, credentialing, and substance use disorder vs mental health.

Examining the Use of Braided Funding for Substance Use Disorder Services
This report looks at state and federal laws and policies that encourage braided funding to provide substance use disorder services, best practices for braiding funds, and pathways to sustainability for substance use disorder programs.

Medicaid Coverage of Medications to Reverse Opioid Overdose and Treat Alcohol and Opioid Use Disorders
This report provides an update on the present state of coverage, availability of, and access to, medications for treating ongoing alcohol use disorder (AUD) and opioid use disorder (OUD) and reversing an opioid overdose within state Medicaid plans. It also includes examples of innovative efforts to increase access to medications for the treatment of SUDs.

Exploring Value-Based Payment for Substance Use Disorder Services in the United States
This report and webinar explore the use of Value-Based Payment (VBP) models and their potential to improve delivery of integrated and coordinated substance use disorder (SUD) treatment services.

Coordinated Specialty Care for First Episode Psychosis: Costs and Financing Strategies
This report includes data on the cost of CSC programs; how they are financed; case studies of cost reimbursement methodologies; funding options; trends in costs and financing for CSCs; and data evaluation of Medicaid and private insurance coverage and barriers.

Upcoming Reports & Events

Learn about new CFRI projects underway. Report release dates and webinar registration will be added as projects near completion.

In 2020, U.S. behavioral health spending totaled nearly $280 billion, a considerable portion of which came from publicly funded sources such as Medicaid, Medicare, and SAMHSA. However, there is little current data about what types of services are publicly funded, and how the funding is used. This report synthesizes data on public funding for behavioral health services from 2016-2021 and analyzes is by service type, state, provider type, and demographic disparities.

Additional Financing, Payment, and Innovative Resources

Dear Colleague and Dear Tribal Leader Letters provide information and updates to partners in the field about emerging issues, priority topic areas, and emergency responses.
The Department of Labor (DOL) recently issued final rules to strengthen parity between mental health and substance use disorder (MH/SUD) benefits and medical/surgical benefits. SAMHSA’s partners within DOL at the Employee Benefits Security Administration (EBSA) have released several tools and informational materials to help understand how these new rules will increase access to MH/SUD benefits. The new rules require health plans to evaluate how well they’re ensuring accessing to MH/SUD benefits and make changes if their evaluations show that they’re providing insufficient access to care or making it harder for people to get the care they need by imposing higher copays, visit limitations, or prior authorization requirements on MH/SUD benefits as compared to physical health care benefits. If you get your health coverage through your job, many requirements apply to plan years beginning in 2025, though some provisions will not apply until plan years beginning in 2026. If you buy your own insurance (for example, on HealthCare.gov), all requirements apply for policy years beginning in 2026. Although the new rules do not take effect right away, Federal law and existing regulations still provide protections for individuals seeking MH/SUD treatment.
HHS Notice of Benefit and Payment Parameters Final Rule (Final 2024 Payment Notice)
This includes two new essential community provider (ECP) categories that are critical to delivering needed behavioral health care: (1) Substance Use Disorder Treatment Centers and (2) Mental Health Facilities.
2024 Physician Fee Schedule Final Rule
CMS issued the CY 2024 Physician Fee Schedule (PFS) final rule that announces policy changes for Medicare payments under the PFS and other Medicare Part B payment policy issues. See a summary of key provisions effective January 1, 2024.
Unwinding and Returning to Regular Operations after COVID-19
The Consolidated Appropriations Act, 2023, delinked the end of the FFCRA’s Medicaid continuous enrollment condition from the end of the COVID-19 Public Health Emergency. As a result, the Medicaid continuous enrollment condition will end on March 31, 2023.
CMS Approves California & Kentucky Requests to Provide Essential Behavioral Health Services Through Mobile Crisis Intervention Teams
The Centers for Medicare & Medicaid Services (CMS) approved proposals from California and Kentucky for community-based mobile crisis intervention teams to provide Medicaid crisis services.
CMS Proposes Policies to Expand Behavioral Health Access and Further Efforts to Increase Hospital Price Transparency
The Centers for Medicare & Medicaid Services (CMS) is proposing to expand access to behavioral health services through coverage of intensive outpatient services — an intermediate level of behavioral health care.
Opportunities to Test Transition-Related Strategies to Support Community Reentry and Improve Care Transitions for Individuals Who Are Incarcerated (SMD 23-003) (PDF | 640 KB)
This provides guidance on a new opportunity for states to help increase care for individuals who are incarcerated in the period immediately prior to their release to help them succeed and thrive during reentry. The new Medicaid Reentry Section 1115 Demonstration Opportunity would allow state Medicaid programs to cover services that address various health concerns, including substance use disorders and other chronic health conditions.
Coverage and Payment of Interprofessional Consultation in Medicaid and the Children’s Health Insurance Program (CHIP) (PDF | 261 KB)
This guidance creates an easier path to specialty care for Medicaid and Children’s Health Insurance Program (CHIP) beneficiaries. For the first time ever, state Medicaid and CHIP programs will be able to pay specialists directly when a beneficiary’s primary health care provider asks for advice.
Additional Guidance on Use of In Lieu of Services and Settings in Medicaid Managed Care (PDF | 326 KB)
This provides guidance on an opportunity for states to address health-related social needs for people with Medicaid coverage through the use of “in lieu of services and settings” in Medicaid managed care. This option will help states offer alternative benefits that take aim at a range of unmet health-related social needs, such as housing instability and food insecurity, to help enrollees maintain their coverage and to improve their health outcomes.

Last Updated: 12/22/2025

Center for Financing Reform & Innovation (CFRI)

What is CFRI?

Sign Up for SAMHSA Email Updates

What’s New

Upcoming Reports & Events

Public Financial Investments in Behavioral Health

Additional Financing, Payment, and Innovative Resources