New Changes to Behavioral Health Intensive Outpatient Program Coverage in Medicare
Center for Health Care Strategies
Better care where it's needed most
In November 2023, the Centers for Medicare & Medicaid Services released new guidance aimed at increasing Medicare coverage of community-based mental health and substance use disorder (SUD) services, including for intensive outpatient program (IOP) services. Historically, IOP services have been unavailable for Medicare-only beneficiaries due to Medicare regulations and billing standards that either did not cover the settings where these services were delivered or did not cover IOP services as a benefit. ?
As of 2024, Medicare now covers IOP services, closing a significant gap in Medicare coverage of mental health and SUD care. This new coverage may also improve access to behavioral health services and care coordination for Medicaid enrollees who use IOP services, particularly people who are dually eligible for both Medicare and Medicaid. This policy cheat sheet, developed through support from Arnold Ventures, provides an overview of IOPs, outlines what’s changing with this coverage expansion, and highlights why the change is significant for states.