Since H.R. 1 became law in 2025, behavioral health providers have been preparing for significant Medicaid policy changes that could affect eligibility, reimbursement, administrative workloads, and patient access to care. The changes related to Medicaid work requirements enacted by H.R. 1 will become effective beginning in January 2027, shifting how behavioral health agencies operate in ways that are not yet clear. 

The National Council for Mental Wellbeing (NCMW) recently hosted a webinar in partnership with the College for Behavioral Health Leadership (CBHL) and Health Management Associates (HMA) entitled “H.R.1 and the Future of Behavioral Health: What Leaders Need to Know” and featured a provider organization’s perspective on H.R. 1 preparations. Over the course of the discussion, a few familiar themes emerged: while many state-level implementation details remain unknown, what is certain is that behavioral health providers are being asked to tighten administrative workflows and the time to start preparing is now. 

What We Know About H.R. 1 Today 

According to Kaiser Family Foundation (KFF), H.R. 1 will cut around $1 trillion (or 11%) of federal Medicaid funding over the next decade. It will take years for H.R. 1’s Medicaid changes to fully take shape as new guidelines are released and implemented on a state and federal level.  

Even so, new work requirements will take effect for non-exempt Medicaid enrollees starting in January 2027. Medicaid plans will also be required to implement six-month eligibility redeterminations, doubling the frequency of the redetermination process. This means more paperwork for everyone—from plans and providers to Medicaid enrollees—and more opportunities for coverage to lapse.  

What This Means for Providers 

Behavioral health providers are preparing for the reality that they’ll be operating with more administrative complexity and fewer resources in the coming years. 

According to a KFF survey of state Medicaid officials and focus groups, many states have already begun to make policy changes in accordance with H.R. 1. These changes include:  

• Additional verification: Four states plan to adopt more restrictive compliance verification policies than required by H.R. 1.  

• Early implementation: Three states have begun to implement work requirements sooner than the January 2027 requirement.  

• Automating verification: Eighteen states are exploring ways to automate verification of work requirements and non-medical exemption. Many states are also looking for ways to verify exemptions from the upcoming work requirements, including Medicaid claims data and other sources.  

• Hardship exceptions: Twenty-nine states will adopt some form of hardship exceptions, including individuals who live in high unemployment areas or who are receiving care in a hospital or nursing facility.  

Though the changes are beginning to take shape, states still face some uncertainty while they wait for federal guidance on exemption definitions, like who qualifies as medically frail or as a caregiver, plus what verification methods will be accepted. States also reported in the KFF survey that their ability to automate verification will depend on limitations including staff, time, and resource constraints.  

To prepare for this shift, behavioral health agencies should look at adopting technology that improves efficiency in managing eligibility and can track client work requirement determinations. Since much will vary from state to state, providers who engage with their state(s) early on regarding exception evaluations and processes can begin to prepare for the changes they’ll encounter.  

Behavioral health agencies will need efficient workflows that support reimbursement, reduce administrative burden (especially amid changes from HTI-4 and CMS Prior Authorization Final Rules), and help staff focus on patient care. For many organizations, this means finding technology solutions that simplify complex processes without adding more work.  

What This Means for Care 

Just as provider organizations will face additional obstacles under H.R. 1, so will the populations they serve. In short, enrolling in and maintaining Medicaid coverage will become even more difficult than it is today under H.R. 1.  

In January 2027, Medicaid work requirements are scheduled to take effect, and eligible enrollees will be required to complete redeterminations twice as often. Retroactive coverage windows will shorten as well. Coverage will be limited to two months before application for the non-expansion Medicaid population and one month before application for the expansion Medicaid population. 

For individuals whose coverage lapses, this change may result in a more complex intake process, longer wait times, and potential delays in accessing medication. Coverage disruptions may also cause some individuals to postpone care, increasing the risk of more acute and costly behavioral health needs later.  

What Organizations Can Do Today 

While many aspects of H.R. 1 implementation will continue to evolve, organizations do not need to wait for every detail to prepare for its impact. 

Providers can begin preparing now by: 

• Monitoring federal and state implementation milestones or announcements closely and assessing how new requirements may affect operations, staffing, reimbursement, and patient access.  

• Evaluating eligibility verification, intake, and revenue cycle processes to identify opportunities for greater efficiency.  

• Building a flexible technology ecosystem that can adapt to changing compliance, eligibility, and reporting requirements. 

• Investing in tools that help automate administrative workflows, reduce manual effort, and support stronger reimbursement outcomes. 

The right tools and technology can make or break an agency’s ability to provide quality care at scale while managing increased administrative demands.  

Any investment that provider organizations make today will carry even more weight as funding dollars are expected to stretch further in the years ahead.  

Looking Ahead

The full impact of H.R. 1 will unfold over time, and many implementation details remain uncertain. However, the direction of change is becoming clearer. Behavioral health organizations should prepare for increased administrative complexity, more frequent eligibility verification requirements, and greater pressure on reimbursement and operational efficiency. 

Organizations that proactively strengthen workflows, improve revenue cycle processes, and invest in adaptable technology will be better positioned to navigate upcoming changes while continuing to deliver high-quality care to the communities they serve. 

Additional Resources 

• Tracking Implementation of Medicaid Work Requirements by Kaiser Family Foundation  

• State Guidance on Medicaid Reforms by the Centers for Medicare & Medicaid Services  

• H.R. 1 Implementation Journey Map by National Council for Mental Wellbeing