Recent changes in Medicaid policy and their possible effects on mental health services

As Medicaid has emerged as the primary funder of public mental health services, its character has affected the organization and delivery of such services. Recent changes to the program, however, promise to further affect the direction of changes in states' mental health service systems. One group of changes will further limit the flexibility of Medicaid mental health funding, while increasing provider accountability and the authority of state Medicaid agencies. Others will increase incentives for deinstitutionalization and community-based care and promote person-centered treatment principles. These changes will likely affect state mental health systems, mental health providers, and the nature of service delivery.