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NOVEMBER 2025 Medicaid & Medicare Newsletter: Compliance and Policy Updates

Mental Health • Substance Use • Social Services

November 2025


Summary


November brought concrete federal and state moves with direct implications for behavioral health and social service providers. Federally, CMS finalized CY-2026 Medicare Part B policies with a renewed emphasis on value, documentation rigor, and payment accuracy, raising audit salience for BH-adjacent services (CMS press release). Telehealth flexibilities reverted to pre-PHE limits for many non-behavioral services on October 1, 2025, but BH telehealth maintains broader flexibility, so mixed rules now apply across service types (CMS MLN, Oct 15). 


At the state level: North Carolina updated Medicaid rate reductions effective Oct 1 (with an Oct 30 replacement bulletin) and reported $6.5B in medical-debt relief linked to a Medicaid incentive model; New York released the Daniel’s Law crisis-response RFP; Massachusetts issued BH-specific billing corrections (BHUC) for October claims; Arizona implemented new BH clinical chart-audit instructions effective Oct 1 as part of its waiver operations (NC Medicaid; NC Governor’s Office; NY OMH RFP list; MassHealth BHUC bulletin; AHCCCS BH audit instructions). 


Bottom line: prepare for stricter documentation and MCO data requests; align crisis response, peer support, and care coordination models with new state requirements; and proactively update intake and verification workflows as eligibility policies evolve.


Federal Policy & Legislation


Medicare Part B: Payment Accuracy & Chronic-Care Focus (CY-2026)

CMS announced actions to modernize payment accuracy and curb waste while improving chronic disease management for Medicare beneficiaries (press release Oct 31). Expect heightened attention to documentation and coding integrity across Part B services that many BH providers touch (e.g., psychiatric E/M, collaborative care). (CMS Newsroom). 


Telehealth: BH Flexibilities vs. Non-BH Reversions

Per CMS’s MLN Connects (Oct 15), many non-behavioral Medicare telehealth flexibilities reverted to pre-PHE rules on Oct 1, 2025 (e.g., patient-home originations outside rural areas), while behavioral health telehealth retains broader flexibilities. Providers should segment telehealth policies by service type to avoid denials. (CMS MLN). 


Managed Care Networks: National BH Access Signal

HHS-OIG reported that many Medicare Advantage and Medicaid MCOs continue to have limited BH networks and inactive providers (Oct 7). Expect intensified scrutiny of network adequacy and potential contracting opportunities for qualified BH agencies. (HHS-OIG report & highlights). 


State-Level Spotlight (Behavioral Health & Social Services)


North Carolina — Rate Reductions & Medical-Debt Relief

  • Updated rate-reduction bulletin: NC Medicaid replaced its Sept 25 notice with an Oct 30 update detailing provider reimbursement reductions effective Oct 1, 2025 (subject to change with additional appropriations). Agencies should confirm MCO contract rates and re-run revenue forecasts. (NC Medicaid bulletin, Oct 30). 

  • Medical-debt relief milestone: The Governor’s Office announced >$6.5B in medical-debt relief for >2.5M residents via a Medicaid-linked hospital incentive model (HASP), with CMS approval noted in the program narrative. BH providers should anticipate reduced bad-debt pressures and updated hospital charity-care policies. (Governor’s press release, Oct 13). 


New York — Daniel’s Law Pilot Program RFP (Crisis Response)

NY OMH issued the Health-led Community Behavioral Health Crisis Response: Daniel’s Law Pilot Program RFP on Oct 28, 2025 (proposals due Jan 12, 2026). This is a significant system-change lever for BH-led crisis response and coordination with 988/EMS law-enforcement alternatives—high impact for CCBHCs and crisis providers. (OMH Procurement page listing, Oct 28). 


Massachusetts — BHUC Claims Reprocessing & BH Policy Updates

MassHealth announced it would reprocess Behavioral Health Urgent Care (BHUC) claims incorrectly denied with Edit 5125; agencies should monitor remittances and correct any downstream denial cascades. (MassHealth message text, Oct 14). 

Additional state BH policy materials released this fall (e.g., LIBHC enrollment rules, CQS) reinforce BH integration and quality expectations. Agencies should validate enrollment status for Licensed Independent Behavioral Health Clinicians under updated guidance. (MassHealth LIBHC bulletin). 


Arizona — BH Clinical Chart Audit (CYE 2026) & Rates Pages

AHCCCS released Behavioral Health Clinical Chart Audit (BHCCA) Instructions effective Oct 1, 2025 (CYE 2026). Behavioral health providers should align documentation and quality-assurance processes with the new audit groupings and timelines tied to the Section 1115 waiver. (AHCCCS BHCCA Instructions, CYE 2026). 


Fee schedule pages also indicate updated behavioral health rate effective dates (Oct 1, 2025)—confirm plan-specific alignment. (AHCCCS FFS rate references). 


Practical Updates for Providers – Tactical Recommendations


  • Telehealth split-rules: Segment workflows by service type (BH vs. non-BH) to ensure Medicare telehealth compliance post-Oct 1. Train schedulers/billers accordingly and add payer-specific edits. (CMS MLN). 

  • Contract & rate hygiene: In NC, confirm MCO contract rate files reflect the Oct 1 changes; in MA, monitor BHUC reprocessing and reconcile any mass adjustments. (NC Medicaid; MassHealth). 

  • Crisis-response positioning: NY crisis providers/CCBHCs should evaluate the Daniel’s Law pilot’s fit with existing mobile teams, 988 partnerships, and law-enforcement alternatives; begin partner alignments for the RFP response window. (NY OMH RFP schedule). 

  • Audit readiness: AZ BHCCA instructions require specific chart elements—run internal spot-audits now to avoid recoupments and corrective actions. (AHCCCS BHCCA). 

  • Network adequacy: OIG’s findings on thin BH networks could strengthen your negotiating posture with MA plans and MCOs—document access metrics and wait times. (HHS-OIG).


Leadership Action Checklist 


Action

Owner

Due

Update Medicare telehealth policy by service type (BH vs. non-BH); retrain schedulers/coders

Compliance + Rev Cycle

Nov 30, 2025

Re-forecast revenue in NC with Oct 1 rate changes; confirm MCO contract files

Finance + Contracting

Nov 30, 2025

Reconcile MA BHUC reprocessed claims; fix denial logic

Rev Cycle

Dec 15, 2025

If operating in NY, convene partners for Daniel’s Law pilot response planning

Programs + Development

Dec 15, 2025

Run BH chart spot-audits against AZ BHCCA CYE 2026 instructions

QA/Clinical

Dec 31, 2025

Prep network-adequacy dossier (access metrics/wait times) for payer negotiations

Strategy + Contracting

Jan 15, 2026


EXECUTIVE CALL TO ACTION: Navigating Immediate Regulatory Shifts in Behavioral Health


The current policy landscape presents a convergence of heightened payment scrutiny, urgent operational compliance deadlines, and significant strategic opportunities that demand immediate C-Suite action. Avoid complacency and the risk of substantial financial and operational fallout by fortifying documentation & payment integrity against audits, stabilizing and re-forecasting revenue against rate volatility, and by seizing the opportunity available in crisis response system redesign. 


For a custom executive foresight briefing or to benchmark your readiness across interoperability, resilience, and equity metrics, contact us at ask@hiquitysolutions.com.


References (selected)

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