Overview

While the majority of health care is provided through the private market, and the largest programs are administered by the federal government, state governments also play a critical role in how healthcare is delivered. There are many health programs that are common across the states, and ensuring MFT recognition and participation by these programs is key to the success of the profession. AAMFT and our divisions have been advocating for MFT inclusion in these critical programs for many years and have made great progress, but there is much work to be done. 

Medicaid is the largest provider of mental health services in the United States.  Medicaid is the primary source of health care for low-income families with children, the low-income elderly, and people with disabilities. In 2012, 60 million people were enrolled in Medicaid. Excluding prescription drugs, behavioral healthcare costs amount to 10% of all Medicaid spending. 

Medicaid is a joint federal-state partnership in both funding and administration. The federal government funds a majority of all Medicaid spending in almost each state, with poorer states receiving a higher percentage of federal funding.  On average, state spending on Medicaid accounts in 2008 accounted for approximately 22% of total spending by the states. Medicaid provides coverage for more than 40% of non-elderly persons living in poverty and 25% of all children.

Medicaid is overseen by the Centers for Medicare and Medicaid Services (CMS), an agency within the United States Department of Health and Human Services. Although federal guidelines require all states to cover specific categories of people and types of benefits, each state administers its own Medicaid program.  In each state, the program is administered by an agency designated by the governor as the state Medicaid agency. Most states have a traditional Medicaid program, as well as managed care plans.

Some people confuse the Medicaid program with Medicare, because both were established by federal statute and because there is some overlap in their purpose and beneficiary populations. Both Medicaid and Medicare provide health insurance to the low-income elderly and people with disabilities. Approximately 1 in 6 Medicare beneficiaries are “dual eligibles” who are enrolled in both programs.  However, Medicare is purely a federal program, funded and administered at the federal level, in contrast to Medicaid's federal-state partnership. 

Medicaid covers a variety of services. State Medicaid programs are required to cover mandatory services, such as physician and hospital services. Additionally, states may cover certain optional services, such as family therapy.  Medicaid mental health benefits are covered through several mandatory and optional service categories, such as physician and psychologist services, outpatient services provided in hospitals and clinics, rehabilitation services, and personal care services.  Although the states are required to provide mandatory services, the states have discretion in determining the duration and scope of coverage for services. 

MFT Recognition in Medicaid 

Federal rules allow for the use of MFTs as providers, but do not mandate recognition of MFTs.  After many years of advocacy, approximately thirty-eight states now have at least some reimbursement or recognition of Family Therapists in their Medicaid programs. As the largest provider of mental health benefits in a state, comprehensive Medicaid recognition of MFTs is crucial to the success of the profession.  The level of recognition is currently varied as many states have multiple Medicaid products and MFTs are covered by some Medicaid products and not others. In some states, MFTs and other Master’s level providers can only receive Medicaid reimbursement if their services are performed in a clinic or other institutional setting. 

Most states describe the details of their Medicaid services and provider qualifications in a Medicaid provider manual.  An examination of this manual is usually the easiest way to determine which mental health benefits are offered and within which service category, and whether MFTs may provide these benefits. Most of these manuals are now available online.  Since mental health and substance abuse benefits are provided through several service categories and different provider settings, it is important to examine the entire manual to determine if MFTs are eligible providers in all of the relevant service categories. 

State Chart

MFT Recognition in State Medicaid Plans