Insights

For most behavioral health organizations, the AI conversation still centers on operations: documentation, coding, scheduling, and the productivity gains that help a stretched workforce go further. Those questions matter. Almost no one is discussing what AI is doing to the people who use it.

The CCBHC cliff is September 29, 2027: While most agencies know this, we're finding ourselves pointing out that for those approximately 128 CCBHC expansion grants from FY2023 ending that day, your Medicaid transition, certification and cost reporting need to be in place before then. Ultimately, sustainability planning has to start now, while you're also preparing your case for a continuing grant application.

If you take away only one thing from this letter, let it be this: the time between a forecast and its NOFO release is now where the real application work needs to happen: frameworks, data systems, budgets, and partner agreements can no longer be built inside a single application window.

AI is already inside your organization, from clinical notes to billing, often used without oversight. While some adoption is official, much enters through the "back door" as staff manage workloads, creating hidden liability. Passive tolerance leaves you exposed. You must conduct a comprehensive inventory, bring it to board review, and formalize accountability frameworks to manage the risk.

Federal-to-state pressure is now an operating condition. The work requirement outreach clock is running; behavioral health rate cuts are law in multiple states. You must identify which clients are in Medicaid expansion to help them navigate exemption processes and run a financial model assessing your service lines against the impact of the enacted rate reductions.

A HiQuity-selected forecast list of federal funding opportunities, including details on estimated total funding, number of awards, forecasted post dates, descriptions, and eligibility requirements for various behavioral and mental health, and substance use disorder programs, updated and current as of July 1, 2026.

Fractional leaders do not intend to assume control. Their purpose is to stabilize the organization, fortify its frameworks, and enable you to navigate with greater precision and reduced disorder. For numerous CEOs and founders, this represents the initial phase toward sustainable leadership, as well as eventual succession, should the circumstances arise.

A fractional COO offers valuable high-level operational leadership, whether on a part-time or project basis. They can be seamlessly integrated into your team a few days a week or engaged to assist with specific transitions. Their mission? To assess, stabilize, and elevate your internal operations, ensuring everything runs smoothly and efficiently. The goal is to build operational resilience: the ability to function effectively during stress, change, or growth.

A regional human services agency, facing a growing cash crunch and outdated contract pricing, hired a fractional CFO. In six months, they created a cash flow model that averted a six-figure shortfall, successfully re-negotiated old contracts, and enhanced the board’s financial literacy. The agency stabilized and gained clarity, becoming a better steward of its mission and finances.

Fractional C-suite leadership provides seasoned executives who work part-time, delivering the same level of insight as full-time executives, but with a lighter impact on your budget. You receive what you need when you need it, whether for a short period or to lead an organizational transformation, offering objectivity, speed, and an external perspective at a fraction of the cost of traditional hires.

Risk is shifting directly to providers. With federal parity enforcement weakened and Medicaid work requirements beginning now, waiting for clarity is dangerous. Adapt by: 1) Quantifying optional Medicaid revenue exposure. 2) Strengthening data for prior authorization challenges. 3) Activating relationships with state partners. Proactive systems-level awareness is key.

No organization builds a complete compliance infrastructure all at once. What matters is that the gaps are visible, the priorities are clear, and the work is happening in the right sequence before the monitoring visit and not after.

AI becomes a problem when organizations use it in ways that create regulatory risks they do not foresee, or when AI-generated content replaces the organizational knowledge, strategic judgment, and compliance infrastructure needed to win and sustain a federal award.

Missing closeout deadlines is not a paperwork problem. [...] A negative performance record in SAM.gov follows an organization into every subsequent application and can affect award decisions, risk classifications, and the terms imposed on future grants.

An organization that charges only direct costs to its federal grants is effectively subsidizing the federal program with its own unrestricted funds and absorbing real organizational costs that the award is permitted to reimburse.

An organization that charges only direct costs to its federal grants is effectively subsidizing the federal program with its own unrestricted funds and absorbing real organizational costs that the award is permitted to reimburse.

The financial dynamic receiving the least attention is this: the people who lose Medicaid eligibility and the people whose grant-funded services disappear do not disappear. They arrive at your door without coverage. Medicaid cuts reduce reimbursement revenue and simultaneously increase the uncompensated care burden. The income statement gets compressed from both directions at once, without a termination notice, without a news cycle, and without a Congressional reinstatement.

Most organizations approach the budget as a math exercise, but federal auditors approach it as an accountability document: what you build into the budget now determines what you can defend later, and what you may be required to repay.

Under the Uniform Guidance, the moment a federal award is made, the process by which your organization selects and pays any contractor, consultant, or vendor becomes a regulated activity. [...] And if that process was not followed, the costs associated with those contractors can be disallowed, meaning your organization may be required to repay them from non-federal funds.

Federal compliance findings are rarely about talent. They are about structure: who owns what, what systems are in place, and whether the people responsible for compliance have the bandwidth and authority to actually do it.