COVID-19 continues to have a disproportionate impact on marginalized, lower-income families, communities of color, and populations affected by social and health disparities leading to high need for mental health and substance use disorder services. For these same populations, Medicaid is the sole or primary payor for behavioral health services and their primary source of financial support. The Centers for Medicare and Medicaid Services (CMS) grant waiver authority, which allows a state to implement delivery models and payment systems through the use of federal matching funds; more specifically, beginning in November 2018, states began implementing Section 1115 demonstration waivers for innovative approaches to support and pay for short-term psychiatric are for adults ages 18-64 in institutions for mental disease (IMDs), which previously restricted Medicaid enrollees’ access to inpatient behavioral health (BH) services. This project expands upon data collection efforts from a Year 5 report and continues to examine BH Medicaid policies enacted during or in response to the pandemic.

This study aims to assess BH components embedded within Section 1115 Demonstration Waivers and expand efforts from the typology created in Year 5. More specifically, we will examine waivers currently approved as of January 6, 2022 and compare these waivers to the waivers approved as of March 6, 2020. This will detail the impact of COVID-19 Medicaid policy changes on enrollees and the BH workforce through comparing the typology of waivers approved pre-pandemic to the waivers approved during the COVID-19 pandemic.


Medicaid plays a crucial role as the dominant payor for BH services. State Medicaid programs must continue to balance Medicaid funding and program goals for the health and well-being of Medicaid enrollees. States continually work to address unmet needs for BH services, and the Section 1115 demonstration waiver programs is a dominant way to address these needs. The Section 1115 demonstration waiver program provides opportunities for innovation and flexibility for states seeking to expand access and coverage of BH services. Since the onset of the COVID-19 pandemic, several administrative challenges such as staffing transitions, policy changes, and increased enrollees have emerged.9 As a result, state programs may have shifted their emphasis away from enhancing BH services.

Future research should seek to examine the reasons why Section 1115 demonstration waivers are denied, the impact Section 1115 demonstration waivers have on enrollment and BH service use, and sustainability of state programs. Though the direct impact of the COVID-19 pandemic on Medicaid policy might remain unclear, answering these questions and further exploring state Medicaid programs will help design and implement policies that align with state agencies and Medicaid beneficiaries.




Full Report


Caitlyn Wayment, MPH
Isabella Ginsberg
Jessica Buche, MPH, MA
Amanda Mauri, MPH
Erin Gaines
Kyle Grazier, DrPH, MPH, MS