The start of the new year also marks just 12 months until 2027, when many provisions outlined in the One Big Beautiful Bill take effect — ushering in uncertainty for substance use disorder (SUD) providers around how Medicaid cuts, redeterminations and work requirements will affect operations and patient care.
While there is palpable fear and uncertainty among operators, it’s also an opportunity to embrace innovation, diversify payer mix and invest in quality analytics tools, panelists told Behavioral Health Business at INVEST 2025 in November. Embracing those aspects rather than focusing on the uncertainty will cultivate the resilience necessary to adapt to these changes — but SUD providers that fail to do so could go out of business, they said.
“We are already seeing stakeholders across Medicaid take steps in anticipation of these changes,” Shannon Attanasio, senior vice president of government relations, advocacy and public policy at Medicaid Health Plans of America, said during INVEST. “I think the most immediate impact is the general combination of uncertainty and certainty that creates a really challenging healthcare environment.”
Medicaid Health Plans of America is a trade association that represents Medicaid health plans.
Financial impact “is certain,” Attanasio said, given that Medicaid is a major payer for behavioral health services across the U.S. Reductions to Medicaid funding and spend will breed tightening to state financing, and eligibility changes threaten to “shrink the pie” of available services both for SUD and mental health providers, which is “likely to impact access to care services and treatment.”
The state-to-state variations also make planning ahead a challenge for providers right now as they await standard definitions, state alignment with CMS and clarity about how this will play out months from now.
Doubling down on patient education and engaging them about how these shifts will impact their care ahead of the shifts will be key, the INVEST panelists agreed. It’s also one way to stay on top of any paperwork related to the changes.
“We don’t want to see vulnerable populations fall through the cracks just because of paperwork and not checking the right boxes to make sure they stay involved,” Attanasio added.
In some corners of the SUD sector, providers have already started to hear of or experience firsthand the loss of patient coverage, making it imperative to understand how eligibility is being determined and to bridge gaps where patients may fall through as much as possible.
“I think we have a responsibility to do everything in our power to ensure that those who are eligible remain covered,” Rose Bromka, the chief operating officer at Boulder Care, said during INVEST. “We don’t yet know what those hoops are going to be that they have to jump through, but I think we as providers know that we often have a trusted relationship with folks who are experiencing behavioral health needs and SUD care needs, even more so than the payers. The payers are relying on their provider partners to really do that work for them.”
Boulder Care is a digital SUD treatment provider that offers app-based outpatient care, offering medication-assisted treatment (MAT) for patients with addictions ranging from opioid use disorder (OUD) to alcohol use disorder (AUD).
Right now, Boulder Care operates in five states and Bromka said the uncertainties are prompting the company to reconsider where it expands and what it will focus on next.
“It is impacting where we go and why,” Bromka said. “From the beginning, Boulder has really sought broad insurance coverage in all of our markets. We’re partnered with commercial payers, with Medicaid payers, but for the first time, we are going into new states with value-based arrangements on the commercial side only.”
The company, she said, is steering clear of areas “where the conditions are unfavorable for a provider like ours to operate in the Medicaid space.”
Looking ahead, Jason Hendricks, the CEO of Pyramid Healthcare, said that embracing innovation, getting creative with care models, diversifying payer mix and educating patients will be the path SUD providers should take to face these headwinds.
“There will be some folks that step up and face this problem head-on and try to come up with creative solutions, but in the first few months, many have just been kind of hunkered down and a lot of fear,” Hendricks said during INVEST. “
It’s important to understand where patient need is most prevalent regionally and align it with where conditions also exist that allow providers to deliver care sustainably in the long term, he added.
“Whether it’s COVID, whether it’s Hurricane Helene, natural disasters, Hurricane Sandy,” Hendricks said. “It’s all about how you navigate through the situation and communicate.”
Bromka echoed this sentiment, adding that failing to innovate as a provider in this environment could actually cause some companies to go under.
“What we always see in times of distress is that the cream rises to the top,” Bromka added. “You’re going to see some of the less built organizations, nonprofit and for-profit, be acquired and go out of business. … This is an opportunity to innovate at this time, and it’s almost vital. It’s incumbent upon us as providers to create those kinds of service lines and allow people to connect, particularly in an environment where we’re going to see a lot of recovery organizations and nonprofit organizations potentially shutter their doors, which is what we’re hearing from a lot of on-the-ground providers.”
The Medicaid-induced headaches throughout 2026 are not just an issue for SUD providers to tackle, though. Solving it while keeping the continuum of care and access intact for patients will require a solutions-focused lens from health plans, payers and employees alike, Attanasio added. But what’s most imperative is for payers to see that providers “are going to be effective in raising awareness about these new requirements,” she said.
Hendricks agreed, adding that this is the exact intersection where opportunity and innovation can happen.
“It’s going to be a necessity when you have these challenges … payers and providers are going to have to come together and figure out how to solve the issue,” Hendricks said. “And that presents an opportunity, which is exciting.”
Another important tool providers should be aware of and advocate for, Attanasio said, is leveraging ex parte support for states and expanding those processes.
“Ex parte is very important because it’s a powerful tool, and it basically allows the state to determine someone is eligible without the enrollee having to jump through a lot of hoops and fill out paperwork,” Attanasio said. “It’s just checking out those existing data sources to see if someone is eligible.”
Late 2025 also delivered some tools and small wins for SUD providers to take forward into the new year as they navigate what the next year and a midterm election cycle might bring.
President Donald Trump signed the SUPPORT for Patients and Communities Reauthorization Act of 2025 into law on Dec. 1, reauthorizing SUD prevention, treatment and recovery programs established in 2023 through fiscal year 2030 with modest funding increases as well.
Following that, on Dec. 31, the Drug Enforcement Administration (DEA) announced an extension of telehealth prescribing flexibilities around controlled medications like methadone, naltrexone and buprenorphine through Dec. 2026.