Medicaid Psychotherapy Spending Up 156%
By Chris Larson | August 19, 2026
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This is an exclusive BHB+ article
Medicaid spending on core psychotherapy services has more than doubled from 2018 to 2024, according to Behavioral Health Business’ analysis of data from a vital Centers for Medicare & Medicaid Services (CMS) system. Overall spending across all providers increased by 156% across the seven-year span to $6.68 billion.
Additional spending was largely driven by:
- Increases in average payments across a core bundle of psychotherapy codes analyzed
- To a lesser degree, increases in provider entities billing for those codes
- Growth in the number of patients seen, slightly ahead of new providers suggesting that incumbents took on more patients over the years.
The analysis also reveals the extent to which for-profit entities do not appear among the organizations paid the most during this period:
- Only five out of the top 20 payment-getters are for-profit organizations, namely: Nystrom & Associates (now Sagent Behavioral Health), Transformations Care Network, Thrive Behavioral Health, Advanced Behavioral Health and BTST Services.
Each is a leader in the outpatient mental health space that has invested in services for vulnerable populations, especially pediatric populations and parallel family support services.
Separate federal research by U.S. Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG) finds that only a slim majority of behavioral health providers are able and willing to provide timely access to patients with Medicaid. Pediatric populations especially faced timely access challenges. All but one of these companies (Sagent Behavioral Health) are based on the East Coast.
Executives at Transformations Care Network, headquartered in Boston, previously told BHB that they have a better success rate when it comes to innovative arrangements among Medicaid programs. The organization’s CEO, Brian Wheelan, has previously highlighted several strategic initiatives the company has in place to care for Medicaid patients. Wheelan himself is an ex-Massachusetts Medicaid official and was once the president of Beacon Care Options, a Medicaid managed care organization (MCO) focused on behavioral health. It operates 90 locations in Maryland, Massachusetts, Pennsylvania, Washington, West Virginia and Virginia.
Rosedale, Maryland-based Thrive Behavioral Health operates six offices and offers in-home, in-school and community-based outpatient mental health services across the DMV region. Also based in Maryland, Advanced Behavioral Health