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The Short Answer: Treat It as a Compliance Program Input, Not a Policy Document
Operators should treat the CMS Behavioral Health Strategy as a compliance program input, not a mission statement. It is the lens CMS, HHS-OIG, state Medicaid agencies, and accreditors are already using when they evaluate your treatment center. Map your program to its pillars in the next 90 days, or you will run without the map your regulator is reading from.
CMS built the Strategy around pillars covering access, prevention, evidence-based care, technology, and coordination with states, providers, and federal partners. On the current CMS Addressing & Improving Behavioral Health page, the agency states plainly that “CMS is currently revising the CMS Behavioral Health strategy“. Translation: the pillars are not static. They are the moving target your surveyors and SIU auditors are tracking.
Most operators read the Strategy once and filed it under policy. That was a mistake. What CMS publishes as strategy, HHS-OIG operationalizes as audit targets, and state Medicaid agencies turn into rate methodology and SIU audit triggers. If you run a multi-site SUD or mental health platform in Florida, Virginia, Texas, or Illinois and your compliance program is not mapped to those pillars, your next survey window will not be kind.
Where Federal Enforcement Is Actually Landing
Look at the June 2024 DOJ takedown and the picture is unambiguous. Per HHS-OIG, the 2024 National Health Care Fraud Enforcement Action charged 193 defendants, including 76 doctors, nurse practitioners, and other licensed medical professionals, across 32 federal districts, in schemes involving approximately $2.75 billion in intended losses and $1.6 billion in actual losses. Federal agents seized $231 million in cash, gold, luxury vehicles, and other assets.
Behavioral health was not incidental. Thirty-six defendants were charged for “separate cases involving similar schemes” that involved laboratory owners paying kickbacks and bribes to telemedicine companies in exchange for referrals for unnecessary genetic testing, or cases where telemedicine visits with a psychiatrist lasted for less than a minute. HHS-OIG Inspector General Christi A. Grimm framed the enforcement posture directly, saying HHS-OIG intends to “protect taxpayer dollars and keep Americans safe from harms to their health, privacy, and financial well-being“.
The throughline across the behavioral health cases my team has reviewed is not exotic. It is documentation that does not match the claim. If your clinically managed residential charts read like an intensive outpatient level, an SIU auditor will find it. If your Level 2.5 partial hospitalization program (which is outpatient, not residential) is billing five hours when the group note supports three, the extrapolation on a 30-chart sample will end your year. CMS strategy plus OIG Work Plan plus state SIU equals a very specific set of charts being pulled.
Parity and Network Adequacy Are the Sleeper Issues
Most operators underestimate this. In October 2025, HHS-OIG issued data brief OEI-02-23-00540, “Many Medicare Advantage and Medicaid Managed Care Plans Have Limited Behavioral Health Provider Networks and Inactive Providers.” OIG reviewers analyzed 40 Medicare Advantage plans and 20 Medicaid managed care plans in 10 counties (five urban and five rural) from five states and documented networks so thin they should embarrass the payers.
The numbers. Three-quarters of the Medicare Advantage plans had less than 25 percent of the counties’ behavioral health workforce in their networks. Almost half of the Medicaid plans had less than 25 percent of the counties’ workforce in their networks. The ghost-network math is worse. According to the American Hospital Association’s summary, plans inaccurately list 72% of in-network behavioral health care providers as being available. Healthcare Finance News reported that in Medicare Advantage, on average, 55% of behavioral healthcare providers listed in plans’ networks did not provide a single service to enrollees in 2023. In Medicaid, about 28% of providers did not provide a single service.
State Medicaid agencies will use those findings to drive contracting changes, directory accuracy audits, and parity reporting requirements for the next 18 to 24 months. If you contract with Medicare Advantage or Medicaid managed care plans in Arizona, Florida, Virginia, or Texas, expect your directory data, timely-access metrics, and authorization turnaround times to be examined in a way they have not been examined before.
Now layer ASAM on top. CMS does not mandate the ASAM Criteria, 4th Edition by name in federal regulation. State Medicaid agencies absolutely do. Per IDHS/SUPR, on July 1, 2025, the Illinois Department of Human Services, Division of Substance Use Prevention and Recovery (IDHS/SUPR) will adopt the American Society of Addiction Medicine (ASAM) Criteria, 4th Edition, and beginning July 1, 2025, IDHS/SUPR’s compliance monitors will begin monitoring organizations for compliance with the ASAM 4th Edition. If your assessments still read like 2013, you are handing payers a denial on a silver platter and building a finding waiting to happen on your next CARF or Joint Commission survey.
Five Things Operators Should Actually Do in the Next 90 Days
- Run a mock survey against the ASAM Criteria, 4th Edition, with surveyor focus on level of care justification at admission, continued stay, and transfer. Most charts my team reviews still carry 3rd Edition language in the assessment template. ASAM renumbered and renamed the levels of care in the 4th Edition. Your template needs to reflect that.
- Pull a 25-chart internal audit across your top three payers and reconcile billed units against documentation. If your variance is over 5%, your team has a refund analysis to do before a payer SIU does it for you.
- Document your parity-relevant metrics: authorization timelines, denial rates, and average length of stay by level of care. State Medicaid agencies are asking for these in writing, and the October 2025 OIG brief gave them the ammunition to ask harder.
- Review your telehealth workflows against post-PHE CMS rules and your state’s standards. Per the HHS telehealth policy updates page, Medicare patients can permanently receive telehealth services for behavioral/mental health care in their home, and an in-person visit within six months of an initial Medicare behavioral/mental telehealth service, and annually thereafter, is not required through December 31, 2027. Florida, Texas, and Arizona diverge on state-side rules. Do not assume Medicare policy governs your Medicaid or commercial book.
- Get your governing body minutes to reflect that your leadership team has reviewed the CMS Behavioral Health Strategy and assigned owners to each relevant pillar. CARF and Joint Commission surveyors are starting to ask.
The Operator Read
The CMS Behavioral Health Strategy is not aspirational. CMS, HHS-OIG, state Medicaid agencies, and accreditors are now using it as their evaluation lens. Operators who treat it as a compliance program input will sit in a different competitive position in 24 months than the ones who treat it as a policy document.
Our team will be at NAATP National in Amelia Island, May 4 through 6, 2026, where AHS is sponsoring the Women in Leadership Luncheon. Allison, Benjamin, Leah, and I will be there. If you want to walk through what a CMS-aligned compliance and payer readiness program looks like for your platform, find us. Bring your hardest question. We prefer those.
Frequently asked questions
Is the ASAM Criteria, 4th Edition required by CMS?
No. CMS does not require the ASAM Criteria, 4th Edition by name in federal regulation. State Medicaid agencies do. Per IDHS/SUPR, Illinois adopted the ASAM Criteria, 4th Edition on July 1, 2025, and IDHS/SUPR compliance monitors began monitoring organizations for compliance with the 4th Edition on that same date. If you operate in a state with a 4th Edition mandate, your assessments and level of care determinations must be written to the 4th Edition, not the 3rd.
How much fraud enforcement is hitting behavioral health right now?
Significant. Per HHS-OIG and DOJ, the June 2024 National Health Care Fraud Enforcement Action charged 193 defendants across 32 federal districts in schemes involving approximately $2.75 billion in intended losses and $1.6 billion in actual losses, with $231 million in cash, gold, luxury vehicles, and other assets seized. Behavioral health was specifically named, including telemedicine cases where visits with a psychiatrist lasted for less than a minute.
Is PHP (Partial Hospitalization, ASAM Level 2.5) residential or outpatient?
PHP is outpatient. It is ASAM Level 2.5. Only residential levels of care and withdrawal management settings are residential under the ASAM Criteria, 4th Edition. Operators who describe PHP as residential in marketing or in clinical documentation create a payer denial risk and an accreditation finding.
What network adequacy issue should behavioral health operators expect from regulators?
Severe scrutiny. HHS-OIG’s October 2025 data brief (OEI-02-23-00540) reviewed 40 Medicare Advantage plans and 20 Medicaid managed care plans across 10 counties in five states and found that three-quarters of the Medicare Advantage plans had less than 25 percent of the counties’ behavioral health workforce in their networks. The American Hospital Association’s summary noted plans inaccurately list 72% of in-network behavioral health providers as being available. State Medicaid agencies will use these findings to drive contracting changes, directory accuracy audits, and parity reporting requirements over the next 18 to 24 months.
References
- CMS, Addressing & Improving Behavioral Health
- HHS-OIG, 2024 Nationwide Health Care Fraud Enforcement Action
- HHS-OIG Data Brief OEI-02-23-00540 (October 2025)
- American Hospital Association, summary of OIG behavioral health network findings
- Healthcare Finance News, OIG on limited behavioral health networks
- IDHS/SUPR, Transition from ASAM 3rd Edition to 4th Edition
- HHS Telehealth Policy Updates
- HIPAA Journal, HHS-OIG $2.75B enforcement summary (Grimm quotation)