Medicaid and Children’s Health Insurance Program (CHIP) Mental Health Coverage Guide

This guide covers the mental health benefits available through Medicaid and CHIP, as well as the right questions to ask your insurance plan, and how to find coverage for therapies that work for you and your family — whether you’re seeking care for yourself or a child.

What is Medicaid and Children’s Health Insurance Program (CHIP) Health Insurance?

Medicaid

Medicaid is a joint federal and state health insurance program that provides health coverage to eligible low-income individuals and families, including children, pregnant women, parents and caretakers, older adults, and people with disabilities.

Each state administers its own Medicaid program within federal guidelines, so eligibility requirements, covered services, and provider networks can vary by state.

Children’s Health Insurance Program (CHIP)

CHIP is a joint federal and state program that provides low-cost health coverage to children and pregnant women in families who earn too much income to qualify for Medicaid but cannot afford private insurance coverage.

CHIP eligibility and benefits vary by state.

Eligibility Requirements

Medicaid

Medicaid serves populations that meet financial and eligibility requirements, including:

• Children, often through age 19
• Pregnant women
• Parents and caretakers with dependent children
• Adults under age 65 in states that expanded Medicaid
• People with disabilities or individuals receiving Supplemental Security Income (SSI)
• Adults age 65 and older who meet income and resource limits
• Foster children and special eligibility groups

Basic eligibility requirements generally include:

• Financial eligibility based on Modified Adjusted Gross Income (MAGI) and Federal Poverty Level (FPL)
• Residency in the state where applying for coverage
• United States citizenship or qualified immigration status
• Meeting work requirements if applicable
• SSI eligibility for certain populations

Some eligibility groups are also limited by:

• Age
• Pregnancy status
• Parenting status
• Disability status

CHIP

CHIP commonly serves:

• Children age 19 and younger
• Pregnant women
• Unborn children during pregnancy

Eligibility is typically based on:

• Household income
• Household size
• Immigration or citizenship status
• State residency
• Age
• Pregnancy status
• Disability status
• Existing insurance coverage

In many states, CHIP eligibility is based on income exceeding Medicaid limits but remaining within state CHIP income thresholds.

Some states require waiting periods after voluntarily ending other health insurance coverage before enrollment.

Coverage

Medicaid and CHIP programs provide mental and behavioral health coverage at the federal level. Covered services may include:

• Behavioral health screenings
• Preventive behavioral health services
• Therapy
• Psychiatry
• Medication management
• Clinical assessments
• Crisis services

However, the amount, duration, and scope of services vary by state.

Co-Pays/Patient Cost-Sharing

Co-pays and patient cost-sharing requirements vary by:

• State Medicaid program
• CHIP program
• Managed care organization
• Service type
• Income level

Some services may have no co-pays for eligible children or low-income adults.

Healthcare Coverage Requirements

Medicaid

Mental health coverage generally requires:

• Enrollment in your state’s Medicaid program
• Services provided by a Medicaid-enrolled provider
• Medical necessity documentation
• Diagnosis and treatment documentation
• Compliance with state managed care requirements when applicable

CHIP

CHIP includes behavioral health screenings and preventive services under federal law. States must:

• Ensure access to covered services
• Monitor children with chronic or serious conditions
• Process prior authorization decisions in a timely manner

1. Care for Myself

What services are typically covered?

Medicaid and CHIP programs may cover adult behavioral and mental health services including:

• Individual therapy
• Psychiatric care
• Medication management
• Psychological evaluations
• Telehealth therapy
• Crisis stabilization services
• Intensive Outpatient Programs (IOP)
• Partial Hospitalization Programs (PHP)
• Inpatient psychiatric treatment

Coverage varies by:

• State program rules
• Managed care organization requirements
• Provider participation
• Medical necessity standards

Questions to Ask Your Provider

Eligibility and Coverage Verification

• Do you currently accept my Medicaid plan?
• Do you accept my managed care organization?
• Do you verify eligibility before the first appointment?
• Will I owe copays or fees?

Provider Credentials

• Are you licensed and enrolled as a Medicaid provider?
• What type of clinician will I see?
• If supervised, who is the supervising provider?

Coverage and Authorization

• Do I need a referral from a primary care provider?
• Is prior authorization required before starting therapy?
• How many visits are covered each year?
• Is telehealth covered the same as in-person care?

Diagnosis and Medical Necessity

• What diagnosis will be used for billing?
• How is medical necessity determined?
• How often is treatment reevaluated?
• What happens if services are denied?

Medication and Psychiatry Services

• Do you provide medication management?
• Are prescribed medications covered?
• Will prior authorization be required?
• What happens if medications are not on the preferred drug list?

Higher Levels of Care

• Does Medicaid cover Intensive Outpatient Programs (IOP)?
• Does Medicaid cover Partial Hospitalization Programs (PHP)?
• Does Medicaid cover inpatient psychiatric treatment?
• What hospitals or behavioral health facilities accept Medicaid?

Administrative and Billing Questions

• How are missed appointments handled?
• Are no-show fees billed to Medicaid or to me?
• Who should I contact about billing issues?
• Will I receive an Explanation of Benefits (EOB)?

Appeals and Denials

• Will you help me file an appeal?
• What documentation is required?
• How long does the appeals process take?
• Can services continue during an appeal?

Questions to Ask Your Medicaid Program

Coverage & Eligibility

• Which behavioral health providers are in network?
• Are referrals required?
• Are psychiatrists available in network?
• Are Cognitive Behavioral Therapy (CBT), Dialectical Behavior Therapy (DBT), family therapy, or play therapy covered?
• Are autism evaluations or neuropsychological assessments covered?

Costs & Benefits

• What are the copays?
• Are there annual or visit limits?
• Is medication management billed separately?
• Are emergency psychiatric evaluations covered?

Prior Authorization & Medical Necessity

• Is prior authorization required?
• What documentation is needed?
• What criteria determine medical necessity?

Higher Levels of Care

• Which psychiatric facilities are in network?
• Is Residential Treatment Center (RTC) care covered?

Care Coordination

• Are behavioral health case managers available?
• Can case managers help locate providers?

Medication Coverage

• Which medications are covered?
• Are step therapy requirements used?
• Is prior authorization required for Attention-Deficit/Hyperactivity Disorder (ADHD) medications or antidepressants?

Alternative Therapies — What’s Covered and Why

Examples of alternative therapies include:

• Play therapy
• Art therapy
• Music therapy
• Equine-assisted psychotherapy
• Movement-based therapies

On the federal level for Medicaid, alternative therapies are generally not a covered benefit for adults. However, some states may have expanded their Medicaid program to cover alternative therapies.

To see what kind of mental health services you’re eligible for, check your Medicaid managed care plan’s summary of benefits and coverage (SBC) or call your Medicaid program hotline. You may need a referral and prior approval for Medicaid to cover your therapy.

Key Tips for This Situation

• Verify provider participation before beginning treatment.
• Ask about managed care organization requirements.
• Keep records of authorizations and denials.
• Request behavioral health case management services early.
• Appeal denials when medically necessary services are refused.

2. Care for My Child — General Mental Health

What Services Are Typically Covered for Minors?

Medicaid and CHIP commonly cover:

• Individual therapy
• Child psychiatry
• Medication management
• Family therapy
• Telehealth services
• Psychological evaluations
• Trauma-focused therapy
• Cognitive Behavioral Therapy (CBT)
• Dialectical Behavioral Therapy (DBT)
• Play therapy
• Intensive Outpatient Programs (IOPs)
• Partial Hospitalization Programs (PHPs)
• Inpatient psychiatric hospitalization
• Crisis stabilization services

Coverage typically depends on:

• State Medicaid or CHIP rules
• Medical necessity
• Prior authorization
• Provider participation

Questions to Ask Your Medicaid or CHIP program

Network & Provider Access

• Which mental and behavioral health providers are in network for children?
• Are referrals required from a Primary Care Provider (PCP)?
• Are child psychiatrists available in network?
• Are specialized services covered?

Coverage, Costs & Benefits

• What are the copays?
• Are there therapy visit limits?
• Are developmental or neuropsychological assessments covered?
• Are emergency psychiatric evaluations covered?

Prior Authorization & Medical Necessity

• Is prior authorization required?
• What documentation is required?
• What determines medical necessity?

Higher Levels of Care

• Which psychiatric facilities are in network?
• Is Residential Treatment Center (RTC) care covered?

Claims, Appeals & Billing

• How are appeals handled?
• Are out-of-network services reimbursed?
• Are billing case managers available?

Care Coordination & Case Management

• Are pediatric behavioral health case managers available?
• Can case managers help locate providers?

Medication Coverage

• Which behavioral health medications are covered?
• Are step therapy requirements used?
• Is prior authorization required for Attention-Deficit/Hyperactivity Disorder (ADHD) medications or antidepressants?

Higher Levels of Care

Intensive Outpatient Programs (IOPs)

• Several hours of therapy each week while living at home

Partial Hospitalization Programs (PHPs)

• Structured, full-day treatment without overnight stay

Residential Treatment Centers (RTCs)

• 24/7 care in a treatment facility when intensive support is needed

State Medicaid and CHIP Variation

Coverage and rules vary by state, including:

• Which levels of care are covered
• Length of stay limits
• Provider requirements (e.g., in-network, licensed facilities)
• Prior authorization criteria

Medicaid vs. CHIP Differences

• Medicaid (especially for children) must cover medically necessary services
• CHIP may have more limits, especially in separate CHIP programs

Authorization Requirements

Most higher levels of care (IOP, PHP, and residential treatment) require prior authorization from Medicaid or CHIP

Your provider typically submits this request and must include:

• Clinical assessments
• Diagnosis
• Treatment plan explaining why this level of care is needed
• Continued stays often require ongoing reviews/reauthorization

Medical Necessity Standards

Services must be medically necessary, meaning:

• The condition is serious enough to need structured, intensive treatment
• Lower levels of care (like outpatient therapy) are not enough
• The treatment is expected to improve or stabilize your health

For children on Medicaid:

• Coverage is broader under EPSDT, meaning services must be covered if they help correct or improve the condition

Key Tips for This Situation

• Verify managed care organization rules before beginning care.
• Request case management services early.
• Maintain copies of treatment plans and approvals.
• Appeal denials for medically necessary services.

3. Autism Care — Child Under 21

Medicaid must cover all medically necessary services for children under 21 through a benefit called EPSDT (Early and Periodic Screening, Diagnostic, and Treatment). This means services are covered by Medicaid if they help diagnose, treat, or improve autism symptoms, even if they aren’t normally listed in the state plan.

EPSDT is not always required for CHIP. It depends on how the state set up CHIP.

Medicaid expansion CHIP:

• EPSDT does apply
• Coverage is the same as Medicaid

Separate CHIP program:

• EPSDT is not required
• States can offer more limited or defined benefit packages (some autism services may not be covered)

Refer to your Medicaid/CHIP managed care plan’s provider directory to find participating providers and to your summary of benefits and coverage (SBC) for specific coverage rules.

What services are typically covered?

Screening and diagnosis

• Developmental screenings and autism evaluations
• Ongoing assessments to track progress

Behavioral therapies

• Applied Behavior Analysis (ABA) (widely covered in all states)
• Behavior assessments and treatment plans
• Therapy to build communication, social, and daily living skills

Therapy and treatment services

• Speech therapy
• Occupational therapy
• Mental health counseling or therapy
• Family and caregiver training

Medical and psychiatric care

• Doctor visits, including specialists like neurologists or psychiatrists
• Medication management and medication (if needed)

Community and support services

• Case management (help coordinating care)
• Home- and community-based services (in some programs)
• Skills training and support for daily living

Autism services coverage usually requires:

• A formal autism diagnosis
• Proof the service is medically necessary
• Prior authorization in many cases

Key Tips for This Situation

Keep All Records Organized

• Save copies of your child’s diagnosis, evaluations, and therapy reports
• Keep letters from providers and insurance decisions
• These documents are often needed for approvals and renewals

Call and Ask Questions Early

• Benefits can vary by state and plan
• Always confirm what services are covered before starting care
• Ask for a written summary of what they tell you

Understand Prior Authorization

• Many autism services (like ABA) need approval before starting
• Start the authorization process as early as possible
• Follow up often to avoid delays

Know Your Right to Appeal

• If a service is denied, you can appeal the decision
• Ask for the reason in writing and how to appeal

Check Provider Networks

• Ask for a list of approved autism providers near you
• If no providers are available, ask about out-of-network exceptions

Ask About All Covered Therapies

• Coverage may include more than ABA (speech, OT, behavioral supports)

Be Aware of Service Limits

• Plans may limit hours or visits per year
• Ask how many therapy hours are approved and how to request more

Plan for Changing Needs

• As your child grows, services may change
• Ask how to access higher levels of care if needed
• Keep evaluations up to date

Questions to Ask Your Medicaid/CHIP Plan

Diagnostic Requirements

• What diagnosis is required for autism services to be covered?
• Who is allowed to diagnose autism (e.g., pediatrician, psychologist, specialist)?
• Are specific evaluation tools or reports required?
• Do we need a recent diagnosis, or will older records be accepted?
• How often does the diagnosis need to be updated?

ABA & Therapy Services

• What autism therapies are covered (e.g., ABA, speech, occupational therapy, etc.)?
• What provider credentials are required?
• Are speech and occupational therapy covered?
• Are there limits on how many hours or visits are covered each year?
• Can therapy be provided at home, school, or only in a clinic?
• Are telehealth (virtual) therapy options covered?

Prior Authorization

• Which autism services require prior authorization?
• What documentation is required?
• How long does approval typically take?
• How often must services be reauthorized?
• What should we do if authorization is denied?

Alternative Therapies

• Are any alternative or complementary therapies (e.g., social skills groups, music therapy) covered?
• Are there therapies that are specifically excluded from coverage?
• Can we request coverage for a therapy that is not normally covered?
• What evidence or documentation is needed to support alternative therapy requests?

Higher Levels of Care

• Does coverage include intensive or higher-level autism services (e.g., day programs, residential care)?
• What criteria must be met to qualify for these services?
• How long can these services be approved for?
• Are there approved facilities or programs we must use?
• Does coverage include crisis or emergency behavioral support?

Care Coordination

• Is a care coordinator or case manager assigned to help manage services?
• What kinds of support can care coordination provide (appointments, referrals, school coordination)?
• How do we contact our care coordinator?
• Can care coordination help with transitioning between services or providers?
• Are family training or support services included?

4. Eating Disorder Care — Child Under 21

Medicaid must cover all medically necessary services for children under 21 through a benefit called EPSDT (Early and Periodic Screening, Diagnostic, and Treatment). This includes screening, diagnosis, and treatment for eating disorders (as part of behavioral health care).

EPSDT is not always required for CHIP. It depends on how the state set up CHIP.

Medicaid expansion CHIP:

• EPSDT does apply
• Coverage is the same as Medicaid

Separate CHIP program:

• EPSDT is not required
• States can offer more limited or defined benefit packages (some autism services may not be covered)

Refer to your Medicaid/CHIP managed care plan’s provider directory to find participating providers and to your summary of benefits and coverage (SBC) for specific coverage rules.

What services are typically covered?

Screening and diagnosis

• Behavioral health screenings and evaluations
• Ongoing assessments to monitor progress and needs

Therapy and treatment

• Individual, group, and family therapy
• Mental health counseling and psychiatric care
• Nutrition counseling and care planning

Higher levels of care (based on medical need)

Medicaid can cover the full range of treatment settings:

• Inpatient hospitalization (for medical stabilization)
• Residential treatment programs
• Partial hospitalization (day programs)
• Intensive outpatient and outpatient care

Medical and supportive care

• Doctor visits and specialist care
• Medication and medication management
• Care coordination or case management

Community-based support

• Services to help manage symptoms at home or in the community
• Family education and support services

Important to Know

• Services must be medically necessary (approved by a provider)
• Coverage details (such as length of care or provider options) vary by state
• Prior authorization is often required for higher levels of care

Key Tips for This Situation

Keep Detailed Medical & Therapy Records

• Save doctor visits, weight history, labs, and therapy notes
• These are often required for treatment approval, especially higher levels of care

Understand Medical vs. Mental Health Coverage

• Eating disorders often require both medical and behavioral health care
• Make sure you understand how both are covered under your plan

Plan for Prior Authorization

• Many services (especially IOP, PHP, residential, for example) require approval
• Start this process early and follow up frequently

Know Your Appeal Rights

• If care is denied, you can appeal
• Ask for the denial reason in writing
• Strong medical documentation can help overturn decisions

Ask About Levels of Care

• Treatment may progress from outpatient → intensive outpatient → residential
• Ask how to access the right level of care if your child’s condition changes

Confirm Specialized Provider Access

• Eating disorder specialists may be limited
• Ask about out-of-network options if no in-network providers are available

Involve the Family

• Many treatments (like Family-Based Treatment, or FBT) require caregiver involvement
• Ask if family therapy and caregiver training are covered

Monitor Treatment Limits

• Plans may limit sessions or program length
• Ask how to request extensions if your child needs more care

Use Telehealth When Needed

• Virtual therapy or nutrition counseling can improve access
• Especially helpful if local providers are limited

Use Care Coordination

• A case manager can help organize complex care needs
• This is especially important if multiple providers are involved

Questions to Ask Your Medicaid Plan

Diagnostic Requirements

• What diagnoses are required for eating disorder treatment to be covered?
• Who can diagnose my child (pediatrician, therapist, specialist)?
• Do we need a medical evaluation in addition to a mental health diagnosis?
• Are there specific assessments or documentation required?
• How often does the diagnosis need to be updated?

Therapy & Treatment Services

• What types of eating disorder treatment (e.g., therapy, nutrition counseling, family-based treatment, etc.) are covered?
• Are there limits on therapy visits or sessions?
• Is FBT covered?
• Are dietitians or nutrition services included?
• Is treatment available in-person, virtual (telehealth), or both?

Prior Authorization

• Do eating disorder services require prior authorization?
• What documentation is needed for approval?
• How long does authorization take?
• How often do we need to renew approval?
• What happens if treatment needs to increase in intensity?

Alternative or Specialized Treatments

• Are group therapy or support groups covered?
• Is coverage available for specialized programs (e.g., adolescent-focused treatment)?
• Are there treatments that are not covered?
• Can we request coverage for services that are not typically included?

Higher Levels of Care

• Does the plan cover intensive outpatient (IOP), partial hospitalization (PHP), or residential treatment?
• What criteria must be met for higher levels of care?
• How long will these programs be covered?
• Are there approved treatment centers we must use?
• Is hospitalization covered if my child’s condition becomes medically serious?

Care Coordination

• Is a case manager available to help coordinate my child’s care?
• Can they help connect medical, mental health, and nutrition providers?
• Will they help with transitions between levels of care?
• Are family education or caregiver support services included?
• Who do we contact if we need help navigating services?

5. Alternative Therapies

Examples of alternative therapies include:

• Play therapy
• Art therapy
• Music therapy
• Equine-assisted psychotherapy
• Movement-based therapies

For adults

On the federal level, alternative therapies are generally not a covered Medicaid benefit for adults. However, some states may have expanded their Medicaid program to cover alternative therapies.

To see what kind of mental health services you’re eligible for, check your Medicaid managed care plan’s summary of benefits and coverage (SBC) or call your Medicaid program hotline. You may need a referral and prior approval for Medicaid to cover your therapy.

For children

Medicaid and CHIP coverage for children is generally more comprehensive than for adults, thanks to the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) mandate.

EPSDT requires states to provide all medically necessary services to Medicaid-enrolled children under 21 — including therapy, psychiatric services, and specialized treatments — even if those services are not covered for adults in that state.

This means a child enrolled in Medicaid should be able to access:

• Individual therapy
• Family therapy
• Psychological testing
• Specialized treatments like play therapy or trauma-focused CBT
• Intensive services when needed

Key Tips for This Situation

Don’t Assume Coverage

• Many alternative therapies are not always covered
• Always confirm directly with Medicaid/CHIP before starting

Focus on “Medical Necessity”

• Coverage often depends on showing the therapy improves your child’s health
• Ask providers to document progress and goals clearly

Get Referrals and Documentation

• A referral from a doctor or therapist can strengthen approval requests
• Keep evaluation reports and provider recommendations

Be Prepared for Prior Authorization

• Most alternative therapies need approval before starting
• Submit paperwork early and follow up regularly

Know You Can Appeal

• If coverage is denied, you can appeal
• Include letters from providers explaining why the therapy is helpful

Check Provider Credentials

• Plans may only cover services delivered by licensed professionals
• Verify that the provider meets Medicaid/CHIP requirements

Ask About Other Funding Options

• If not covered, ask about:
• School-based services
• Community programs or nonprofits
• Grants or local funding sources

Coordinate with Other Treatments

• Alternative therapies are often supplemental, not replacements
• Make sure all providers are aligned on your child’s care plan

Track Progress

• Keep notes on how your child responds to therapy
• This can help support continued coverage requests

Explore School Support

• Some services (like art or movement therapy) may be available through the school system
• Ask about IEP or 504 plan services

Questions to Ask Your Medicaid Plan

Coverage Basics

• Are any alternative therapies covered, such as play, art, or music therapy?
• Which therapies are covered under my child’s plan, if any?
• Are these therapies covered only for certain diagnoses?

Provider Requirements

• Do these therapies need to be provided by licensed or certified providers?
• Are there approved (in-network) providers for these services?
• Can services be provided in schools, clinics, or community programs?

Prior Authorization

• Do alternative therapies require prior authorization?
• What documentation is needed to request approval?
• Does my child need a referral from a doctor or therapist?

Limits & Frequency

• Are there limits on how many sessions are covered?
• How long can my child receive these therapies?
• Can more sessions be approved if my child is benefiting?

Medical Necessity

• What does the plan require to show that the therapy is “medically necessary”?
• Can a provider submit letters or progress notes to support coverage?
• Can these therapies be part of a broader treatment plan?

Non-Covered Services

• Which alternative therapies are not covered at all?
• Are services like equine therapy or movement therapy typically excluded?
• If not covered, are there exceptions or appeal options?

Coordination with Other Care

• Can these therapies be used along with standard treatments (ABA, therapy, etc.)?
• Will a care coordinator help include these in my child’s care plan?

Appeals and Parity Laws

Mental health parity laws require Medicaid and CHIP programs to:

• Apply comparable standards to behavioral and medical care
• Avoid stricter limits solely because care is behavioral health-related
• Use fair medical-necessity criteria

Medicaid & CHIP Fair Hearings (Federal Rules)

What Is a Fair Hearing?

A fair hearing is a way to appeal a Medicaid/CHIP decision with which you disagree — for example, your coverage is denied, reduced, delayed, or stopped.

Your Rights

• You must be notified in writing about your right to appeal and how to do it.
• Anyone applying for or enrolled in Medicaid or CHIP can request a hearing.
• You can request an expedited hearing if your health is at risk.

When You Can Request a Hearing

• Your benefits are denied, reduced, suspended, or terminated.
• The state takes too long to make an eligibility decision.

How to Request a Hearing

• Methods vary by state: mail, in person, phone, or online.
• You typically have 30–90 days to request one after receiving a notice.

Rights and What to Expect During the Hearing

• The hearing may be held in person, by phone, or by video conference.
• Represent yourself or have someone help (lawyer, friend, etc.).
• Review your case file before the hearing.
• Present evidence and bring witnesses.
• Question the state’s case (cross-examination).
• Have a neutral decision-maker.

Your Benefits During the Process

• If you appeal before benefits stop, your Medicaid/CHIP coverage may continue during the appeal.
• If the state wins, you might have to repay costs for services received during that time (in some states).

Timeline

• Decisions are usually made within 90 days of your request.

After the Hearing

After the hearing, you will receive a written decision. If you win, the state must fix the issue and restore benefits (even retroactively). If you lose, you may have additional appeal options (like court review).

Medical Necessity Appeals

• Your provider will often handle medical necessity appeals for you
• Be sure to include clear documentation showing why the care is needed
• This may include medical records, a treatment plan, and supporting information from your doctor

Appeals are common and often successful when supported by:

• Medical documentation
• Growth charts or labs
• Provider letters
• Treatment history
• Functional impairment evidence

General Caregiver Tips

• Confirm provider participation before beginning treatment.
• Verify prior authorization requirements.
• Ask about managed care organization rules and limitations.
• Keep copies of all treatment plans, authorizations, and denials.
• Request behavioral health case management support early.
• Maintain records of all insurer and provider communications.
• Appeal denials when medically necessary services are refused.