Oregon Health Authority begins rulemaking on where associate behavioral health providers may bill Medicaid; advocates warn patients could lose care

Oregon Health Authority officials told the Senate Committee on Early Childhood and Behavioral Health they will launch a formal rulemaking process this fall to consider changes to administrative rules that govern how associate behavioral health providers may bill the Oregon Health Plan. OHA said any implementation would not begin until mid‑2026 to allow time for outreach and adjustments.

The rulemaking follows complaints to OHA about workforce capacity and supervision in high‑acuity community settings. OHA officials said they have received concerns from coordinated care organizations (CCOs), community mental health programs, providers and people with lived experience and intend to collect more input, surveys and listening sessions before drafting new rules.

OHA’s process, Director Emma Sando, Medicaid director, said, “We intend to launch that process in the fall, and, after taking in all of that input over the next several months … we have already provided details that these implementation efforts wouldn't begin until 2026.” Ebony Clark, behavioral health director at OHA, described longstanding concerns about ensuring supervision and safety for people receiving care: “We wanted to really make sure that we were being thoughtful and intentional … assuring quality, safety, and standard.”

Why it matters: advocates and provider groups told the committee that an insurer decision announced in December, and actions already taken by CareOregon, have begun removing access to Medicaid‑paid care for many patients before OHA’s rulemaking begins. Andy Walsh, senior health policy advisor at the Children’s Institute, said data OHA provided to the Oregon Health Policy Board show CareOregon oversees three CCOs that account for about 80.6 percent of associate provider claims and that CareOregon told associates it would stop reimbursing them for Medicaid clients unless they worked for a community mental health program or had a certificate of approval (COA). Walsh said the change will likely “impact 80% of these associate providers and their clients” in the state regions covered by those CCOs.

Provider and associate groups told the committee the immediate effect of insurer policy and the prospect of a rule restricting practice settings could sever established relationships between OHP members and their therapists. Natasha Yoganachandra, a professional counselor associate representing the Coalition of Oregon Professional Associations for Counseling and Therapy and Oregon Therapists for Equity, told the committee her group’s survey work and conversations indicate a large number of members may lose access to their chosen provider. “In conversation with CareOregon, they said that the change will impact 5,700 members this July,” she said, and the coalition’s estimate for a statewide impact if a similar rule applied everywhere is about 10,000 OHP members.

Advocates urged OHA to pause any rulemaking or to delay changes until a full health‑equity impact assessment and more public data are published. Andy Walsh said the House Bill 2235 work group convened by the legislature studied workforce problems and did not recommend this change; he said the work group “was also not consulted by OHA in making this decision.” Walsh said the work group’s nearly 100‑page report cites systemic reasons for workforce shortages and documents trust issues with some community mental health systems.

OHA officials said they are collecting more evidence. “We are right now hearing from the community, doing research, and holding a variety of different opportunities for listening sessions,” Sando said. Sando and Clark told the committee OHA will publish surveys for providers and continue public meetings and that final policy choices will depend on that public input and on the formal administrative rule process in Oregon.

What was not decided: The committee received no formal rule or regulation change at the hearing. OHA emphasized the agency has only announced an intent to pursue rulemaking and that specifics — including whether settings will be restricted, the exact supervision standards, or whether billing changes would increase or reduce Medicaid spending — will be determined through the rulemaking and community engagement process.

Concerns raised to the committee: - Advocates and provider groups warned restricting Medicaid billing for associates to community mental health programs could reduce access for priority populations (BIPOC, LGBTQ+, immigrant communities, rural residents and young children) and worsen waitlists. Walsh said the health equity committee he co‑chairs voted unanimously to oppose the proposed change in a preliminary health equity impact assessment submitted to the board. - Providers and associates said community mental health programs often lack adequate supervision capacity and that funneling associates into larger agencies will not solve root causes. Andy Walsh: “We have seen that community mental health programs are actually unable to provide proper supervision, and that is a major reason for the workforce shortage.” - Advocates said district‑by‑district insurer actions are producing immediate harm. Walsh and Yoganachandra said CareOregon’s December communications prompted the first concrete client disruptions before the state rulemaking process began.

Numbers and timing reported to the committee: - OHA told the committee it plans to open rulemaking in the fall and that any implementation would not begin until mid‑2026. - CareOregon told advocates it expects to cut off reimbursement for associates serving Medicaid clients at certain settings effective 07/31/2025 for the three CCOs it oversees, a move advocates say will impact thousands immediately. - Training and supervision requirements discussed: Dr. Emma Sando and Ebony Clark described licensure pathways; Andy Walsh said social workers pursuing the licensed clinical social worker credential often need about 3,500 supervised hours while LMFTs and LCPC/LCPC‑equivalents typically require about 1,900 supervised hours.

Next steps cited by OHA: OHA said it will publish a provider survey, continue listening sessions and community engagement, collect additional data requested by the Oregon Health Policy Board, and proceed with the formal rulemaking process if warranted. Advocates requested a public health‑equity assessment and broader data release before any insurer or state policies take effect.

Stakeholders told the committee they want publicly available data about where associates currently practice, how supervision is provided, and the expected impact on priority populations before changes are finalized. OHA and the provider groups agreed to continue engagement.