5 states reform behavioral health: Medicaid syringe programs, reimbursement, licensing, gender affirmation, prison care coordination

Mental health increasingly means Medicaid.

https://www.beckersbehavioralhealth.com/behavioral-health-government-policies/5-state-behavioral-health-policy-updates/

5 state behavioral health policy updates

Ella Ruder    |    March 11th, 2026

States are advancing several behavioral health policy changes, from syringe service program restrictions in Indiana to Medicaid reimbursement debates in Maryland and workforce reforms in Oregon.

Here are five updates to know:

1. Indiana legislation allowing counties to continue syringe service programs — while adding restrictions — could soon become law. Although Gov. Mike Braun said he does not plan to sign the bill, he does not plan to veto it, so it is set to become law after seven days.

The legislation would extend six countries’ programs for five years. The programs provide sterile syringes, safe needle disposal, overdose prevention drugs, disease testing, and referrals to healthcare and social services.

Participants would be required to show identification proving they live in a county hosting the program and sites cannot operate within 1,000 feet of schools, child care centers or houses of worship without written consent.

Programs would also be required to exchange one sterile syringe for each used needle returned as well as track referrals to drug treatment, prohibit disruption of certain chemicals and allow the department to shut down sites that violate the rules after receiving complaints.

2. In Maryland, behavioral health providers and advocates have urged lawmakers to increase reimbursement rates for behavioral health services provided through Medicaid and the state’s Public Behavioral Health System.

Several behavioral health providers and activists asked the House Appropriations Subcommittee on Health and Social Services for a 3% provider rate adjustment, saying current reimbursement levels are insufficient to retain staff and maintain services for patients facing mental health challenges, substance use disorders and housing instability.

The funding request comes as lawmakers face a $1.6 billion budget deficit. Gov. Wes Moore’s proposed fiscal 2027 budget would cut $155.8 million from the Maryland Department of Health’s Behavioral Health Administration, a 3.8% reduction, allocating $3.9 billion for behavioral health services.

3. Oregon Gov. Tina Kotek signed a law March 5 requiring the creation of a centralized credentialing platform for behavioral health providers.

The step is intended to reduce wait times for clinicians ready to deliver care. It also seeks to reduce administrative requirements tied to provider burnout and expand access to master’s degree-level clinical supervision by allowing qualified licensed professionals to supervise across license types.

4. Texas Attorney General Ken Paxton on March 2 issued a legal opinion stating that a state law banning gender-affirming medical care for minors applies to mental health providers licensed by the Texas Behavioral Health Executive Council.

It states the council’s licensees qualify as healthcare providers under the legislation and are governed by state law barring funds from going to those who facilitate the prohibited “transition” procedures.

It also clarifies that the statute applies not only to individuals or entities who “provide” medical interventions, but also to those who “facilitate” such interventions.

5. North Carolina Gov. Josh Stein on Feb. 5 signed an executive order directing several state agencies to strengthen coordination between the state’s behavioral health and criminal justice systems.

Priority areas include supporting the behavioral health and public safety workforce, and strengthening the behavioral health crisis system.

The order focuses on improving the involuntary commitment process, expanding treatment for incarcerated people, supporting young people in the juvenile justice system with behavioral health needs, improving reentry support for people with mental health needs and strengthening cross-system coordination.