The Medicaid Bump Act establishes a temporary 90% federal matching rate for state spending increases on Medicaid behavioral health services, provided states meet supplement and service improvement requirements.
Tina Smith
Senator
MN
The Medicaid Bump Act establishes a temporary, higher federal matching rate of 90% for state spending increases on Medicaid behavioral health services above a specified baseline. To qualify for this enhanced funding, states must ensure the new federal dollars supplement existing state spending and are used to improve service delivery, such as raising provider payment rates. The bill also mandates that the Secretary of HHS issue guidance defining covered services and submit an annual report to Congress detailing state payment rates and utilization data for these services.
Medicaid Bump Act Offers 90% Federal Match to States That Boost Behavioral Health Spending
The newly introduced Medicaid Bump Act aims to tackle the persistent problem of underfunded mental health and substance use services by dramatically increasing federal support. Essentially, this bill offers states a powerful incentive: if they increase their spending on behavioral health services through Medicaid, the federal government will foot 90% of that extra cost. This enhanced funding kicks in for spending that exceeds what the state averaged during the four quarters ending March 31, 2019 (SEC. 2).
The 'Supplement, Not Supplant' Rule: No Swapping Allowed
Before states start celebrating the 90% match, they need to read the fine print. The bill includes a crucial "Supplement, Not Supplant" rule. To get the extra federal money, a state can’t just replace the dollars it was already spending; it must use the new federal funds to add to the state funds it was spending on behavioral health as of April 1, 2021. This means states have to maintain their commitment while using the federal boost to expand services. Furthermore, the funds must be used to actively improve service delivery, which includes raising payment rates for providers and taking steps to reduce staff turnover among those who deliver these critical services (SEC. 2).
This is a big deal for everyday people. If you rely on Medicaid for therapy or substance abuse treatment, the current system often means long wait times because providers can’t afford to take on more clients at low Medicaid rates. By mandating that states use the funds to raise provider pay, this bill could actually increase the number of available therapists and clinics, improving access and shortening those frustrating wait times.
Defining the Details and Demanding Transparency
Because “behavioral health service” can mean a lot of different things, the Secretary of Health and Human Services (HHS) has 180 days after the bill becomes law to issue clear guidance defining exactly what services qualify for this enhanced funding. This definition is crucial, as it sets the boundaries for where the 90% match can be applied (SEC. 2).
Beyond funding, the bill also pushes for transparency. It requires the HHS Secretary to submit an annual report to Congress detailing, for every state, the payment rates used for behavioral health services, the justification for those rates, and how much those services are actually being used. This move—requiring annual public reporting on payment rates—is designed to shine a light on the often-opaque world of Medicaid reimbursement, holding states accountable for how they value and utilize these essential services (SEC. 3).