The U.S. population is growing older. Individuals over 65 now make up roughly one-fifth of the country. But this isn’t a homogenous group; it’s a collection of generations, each with distinct experiences and needs, and many are actively seeking behavioral health support.
And yet, providers often overlook seniors’ behavioral health needs. Less than half of those 65 and older reported that their doctor asked them about their mental health, according to research by the Hartford Foundation.
Anecdotally, I can tell you that for every behavioral health company I hear launching or expanding into the senior space, I hear about five doing the same in pediatrics. The need there is real — but so is the gap in specialized senior care, and it’s getting far less attention.
As with pediatric services, seniors are often experiencing a time of transition, which can require behavioral health support.
Medicare restrictions, such as lifetime limits on psychiatric inpatient days and restrictions on residential care, could ease. However, there could be hope for some of those restrictions as proposed legislation looks to eliminate the cap on inpatient days.
And it’s important to note that some providers have already seen the opportunity to care for this population. For example, in 2024, Talkspace (NASDAQ: TALK) launched in the Medicare market. Additionally, Oceans Healthcare has worked with seniors for decades. Author Health has raised a substantial amount of funding for its work specializing on older adults’ mental health.
In this BHB+ Update, I will explore:
–Regulatory hurdles that providers face treating Medicare beneficiaries
–New legislation proposals that could help expand access to care
–Providers successfully operating with a senior focus
Regulatory shifts
Medicare beneficiaries often have barriers to finding behavioral health services. In 2024, an OIG report found that only 4% of Medicare and Medicare Advantage enrollees received behavioral health services.
One of the major challenges in the Medicare space is a lack of providers. The OIG report found that only 29% of behavioral health providers listed under traditional Medicare, and 38% of those under Medicare Advantage, were actually seeing patients.
Telehealth has often been pitched as one solution to the provider shortage. And there are some potential breakthroughs in this space. In February, Congress passed a bill extending telehealth flexibilities through the end of 2027. The flexibility enables behavioral health providers to deliver care remotely or through audio without an in-person visit.
While the industry overwhelmingly supported the extension, many providers hoped to secure some permanence on the issue.
“Seniors benefit from telehealth because it is more convenient and reduces common
barriers to care such as transportation, especially for people who are homebound. It
also enables access to care in more remote and rural areas,” Katherine Hobbs, CEO of Author Health, told me. “The recent extension of the provisions to not require an initial in-person visit prior to receiving telehealth services is important, and making those provisions permanent would be a critical step for
ensuring that Seniors maintain access to care.”
Author Health is a hybrid behavioral health provider focused on caring for seniors.
The shortage of providers isn’t the only challenge providers face in treating seniors. Medicare has a lifetime limit of 190 days for inpatient psychiatric care. This has often made it difficult for seniors, particularly those with serious mental illness, to access care over time.
However, new legislation is seeking to change this paradigm. U.S. Senator Bill Cassidy, M.D. (R-LA) introduced a new bill that would eliminate the cap. And some providers are applauding the move.
“Medicare’s 190-day lifetime limit on inpatient psychiatric care is an outdated policy that creates an arbitrary barrier we would never accept for patients with cancer or any other chronic disease — and patients with serious behavioral health needs deserve no less,” Stuart Archer, CEO of Oceans Healthcare, said in a statement of support for the bill.
Oceans Healthcare operates 48 facilities across nine states, offering inpatient and outpatient mental health care, intensive outpatient and partial hospitalization programs (IOP/PHP), a specialized military program and substance use disorder (SUD) treatment
Inpatient care isn’t the only type of service with restrictions for Medicare beneficiaries. Residential rehab for substance use disorders (SUDs) and detox facilities are not covered under Medicare.
“As a result, many of our patients have limited access to residential care and have to seek out hospital-based programs when needing detoxification, which may be more intensive than what the patient needs,” Dr. Lauren Kelly, assistant professor of geriatrics and palliative care at the Icahn School of Medicine at Mount Sinai, told BHB earlier this year. “There are also fewer hospital-based programs with a limited number of beds, which further restricts access. What we really need is expanded Medicare coverage for residential services. There are also restrictions on which intensive outpatient programs patients can access, which further complicates care options for patients.”
While these types of care remain difficult for seniors to access, I could see intensive outpatient programs (IOPs) and partial hospitalization programs (PHPs) gaining more traction as an alternative. The programs do not provide as much support as a residential or inpatient program, but could be a practical alternative, and one I could see savvy operators expanding into.
Providers expanding in the sector
While treating seniors has its challenges, many providers see an opportunity in the space.
Author Health, a hybrid behavioral health provider, landed a whopping $115 million in its debut funding round. The provider offers virtual and in-person behavioral health services for seniors with Medicare Advantage and traditional Medicare plans, and operates on a value-based basis. It can treat patients with a number of conditions, including schizophrenia and psychosis, SUD, bipolar disorder, PTSD and depression.
The company is betting on the industry’s future growth.
“Mental health and substance use disorder in elderly and disabled populations is well understood and is also a growing need, while at the same time, we continue to have workforce shortages,” Dr. Katherine Hobbs, founder and CEO of Author Health, said during Behavioral Health Business’ 2024 VALUE event. “So opening up access to different types of providers and different types of services is critically important for us to be able to meet the future need.”
Author isn’t the only company investing in senior care. After Talkspace launched in the Medicare market, it continued to invest in this segment. In October, the company announced that it acquired an AI-powered social health and peer support platform called Wisdo Health, which is aimed at seniors.
“Our Medicare enrollment also continues to grow, and with the acquisition of Wisdo, we’ve seen increased interest in Medicare Advantage plans given Wisdo’s proven impacts on loneliness and social isolation,” Dr. Jon Cohen, CEO of Talkspace, said during the company’s Q4 earnings call.
But opportunities to care for seniors aren’t exclusive to the digital space. Oceans Healthcare has been offering geriatric behavioral health services for years. It can also provide higher levels of acute care, including inpatient psychiatric care.
As more of the population reaches Medicare eligibility, I expect we’ll see more providers gravitate towards this sector. And there is still a large need in this area, as many groups of seniors are still facing difficulty receiving care.
“There are several patient populations underserved by the traditional behavioral health
system due to barriers at multiple levels, including payment, workforce availability,
stigma, and individual health and social needs,” Hobbs said. “These barriers can be overcome
through value-based payment, technology innovation, caregiver support, and team-
based care that serves the whole person, including physical health, behavioral health,
and social needs.”