H.R.1—also known as the One Big Beautiful Bill Act (OBBBA)—debuted back in July, and as we head into peak cookie-baking season, it feels like ages ago. But while plenty has happened since the law passed, we’re still waiting on some key ingredients from the Centers for Medicare & Medicaid Services (CMS) that haven’t been fully baked, cooled, or iced just yet. 🍪
On our latest No Notes podcast episode, Dr. Denny Morrison sat down with the National Council for Mental Wellbeing’s Katherine Seibel, MSSW, Federal Policy and Regulatory Strategist, and Peter Delia, JD, Federal Policy and Advocacy Strategist, to catch up on where H.R.1 stands today—and how behavioral health leaders can start mixing the right recipe for what’s ahead.
Missed the full episode? Watch or listen here, or keep reading for the key takeaways.
Where H.R.1 (OBBBA) Stands Today & Its Impact on Healthcare
While most of our field is familiar with the major OBBBA provisions announced back in July, a few new details have come out of the oven since then.
For added context, explore our recent blog unboxing all the numbers behind the H.R.1 funding cuts.
But here’s where things stand now.
Rural Health Transformation Fund
One of the most significant late additions to H.R.1 on the Senate side of things was the Rural Health Transformation Program—a $50 billion fund designed to strengthen rural clinics and providers. When the bill first passed, guidance on this provision was thin. Beyond a year-end deadline for announcing awardees, states had little clarity on criteria, timelines, or how dollars would ultimately flow.
That picture has sharpened in recent months as CMS released its Notice of Funding Opportunity (NOFO) for the program. The application window closed on November 5, and every state applied.
“Every state will receive a minimum of $200 million,” Delia explained. “That represents about half of the total available funding. So $25 billion, and then another $25 billion will be awarded by CMS based on the scoring methodology that’s provided in that NOFO.”
For behavioral health leaders, one of the most encouraging developments is the inclusion of Certified Community Behavioral Health Clinics (CCBHCs), Community Mental Health Centers (CMHCs), and Opioid Treatment Programs (OTPs) as eligible facility types.
“Seeing that kind of explicit inclusion of behavioral health facilities was something that we really were hoping for,” said Delia. “We were really glad to see [CCBHCs, CMHCs, and OTPs] included and called out.”
This kind of acknowledgement ensures that behavioral health is not an afterthought in rural transformation efforts, but a core part of the infrastructure investment.
What’s Next?
States will determine how to distribute the funding across providers once CMS announces final award amounts—which should happen by early 2026.
While rural providers will be the natural starting point, there’s nothing in the statute that explicitly prohibits using these dollars in an urban setting—or for technology investments. This opens the door for proposals that improve digital infrastructure, including broadband expansion—an urgent need in many rural and underserved areas.
Work Requirements
As you may have heard, H.R.1 includes new work requirements for Medicaid eligibility. Adults ages 19-64 in expansion or waiver populations must complete at least 80 hours per month of work or community engagement activities.
However, the legislation includes several exemptions, including:
- Individuals with a “disabling mental disorder” or “substance use disorder”;
- Parents and caretakers of children 14 years old or under; and
- People with disabilities.
CMS hasn’t yet released information on how those exemptions will work in practice, but clarity is expected in an upcoming final rule due on June 1, 2026. The new requirements will not take effect until January 1, 2027.
Additional provisions to know:
- Two-year implementation waiver: States may apply for a waiver to delay work requirements until the end of 2028 (giving them more time to implement the IT and admin infrastructure needed for new work requirement programs).
- $200 million in federal support: The bill sets aside roughly $200 million to help states stand up and manage community engagement requirements, though we’re still waiting on specifics of how these funds will be accessed and allocated.
Provider Taxes
Provider taxes play a central role in how states finance Medicaid. Levied on hospitals, nursing homes, and managed care organizations, these taxes allow states to generate their share of the Medicaid program and obtain a higher federal match.
“This is a really critical source of funding for many different states,” said Delia. “49 out of 50 states utilize some form of provider taxes, so H.R.1 substantially limits provider tax agreements used by states to help finance that state share of Medicaid.”
The trickle-down effect of a smaller overall Medicaid funding pool will hit community-based providers hard. Already operating on thin margins, they will likely struggle to offer competitive wages, retain staff, and manage burnout amid increased administrative burdens.
Implementation Timeline
Although many of the most significant H.R.1 changes won’t take effect until 2027, planning for them needs to start long before the timer goes off.
Here are the key dates to watch:
- By December 31, 2025: CMS must release guidance on eligibility redeterminations. This sets the framework for how states will manage upcoming changes and begin the transition toward more frequent eligibility checks.
- By June 1, 2026: CMS must issue the final rule on Medicaid work requirements. This will provide clarity on state expectations and operational impacts.
- January 1, 2027: Eligibility redeterminations for the Medicaid expansion population will move from every 12 months to every 6 months. Plus, new Medicaid work requirements and changes to retroactive coverage will begin.
Get a quick rundown of what all the H.R.1 provisions entail in the National Council for Mental Wellbeing’s summary one-pager.
Long-Term Implications
While some elements of H.R.1 are already moving forward, many of the long-term implications are only just beginning to come into focus. The Medicaid provisions in particular are substantial—or, as Delia described, “seismic”—and their effects will ripple through state systems and provider organizations throughout the next decade.
“Medicaid is one of the largest payers for mental health and substance use services,” Seibel explained. “So, I think the impacts across our field are going to be very widespread…and these will be impacts that we’ll see for years to come.”
A big part of preparing for those impacts comes down to infrastructure. States are already flagging the need for major technology and data system upgrades—in some cases, systems that haven’t been modernized in decades. Strengthening reporting, interoperability, and IT capacity will be essential as the new requirements roll out.
At the same time, the long-term effects of the bill won’t look the same everywhere. States will respond differently as various provisions take effect—shaped by their existing Medicaid programs, optional services, and policy environments.
What Behavioral Health Leaders Can Do
With all these big changes coming, you’re probably thinking: What can I do now to get ahead? We’re so glad you asked. 🙃 Our experts offered practical advice that we’ve broken into four areas you can focus on today.
1. Be Proactive
First up: Don’t wait. Understanding the changes that are coming and preparing ahead of time will be crucial.
“If you haven’t already, become familiar with the provisions that will be coming, what they mean, and when they’ll be coming online,” said Seibel. “You can then spend a little bit of time outlining how you want your organization to respond. Taking that time to digest and plan out now can be really helpful.”
And because these policy changes are broad and long-term, collecting a robust set of baseline data will help you understand what they will mean for your organization over time.
Leaders may want to begin assessing whether their current systems can track key indicators, including:
- Uncompensated care: Are levels rising or falling? How does that shift over time as Medicaid eligibility and coverage requirements change?
- Access and capacity: Are more people being waitlisted or turned away? What patterns are emerging in appointment availability or service demand?
- Workforce impact: Are staffing needs increasing? Have financial pressures led to reductions? How are recruitment, retention, and burnout trends shifting?
- Patient outcomes and acuity: Are more individuals presenting in crisis or requiring higher levels of care? Are emergency department admissions changing as new provisions phase in?
While Medicaid cuts will have meaningful effects, preparation and timely data collection can help leaders anticipate challenges, adapt proactively, and advocate effectively at the state and federal levels.
2. Lean Into Partnerships
H.R.1 will touch nearly every part of the behavioral health ecosystem, which means no organization can—or should—navigate it alone. Now is the time to reconnect with partners who may feel the downstream effects of these changes just as deeply as you do.
“Are there partnerships that you need to warm up?” said Seibel. “Perhaps, for example, your local law enforcement might be really interested in this and might need to have an understanding of what some of the impacts and implications [of H.R.1] might be.”
Early, open communication helps everyone prepare for what’s ahead—and allows organizations to coordinate care and resources proactively rather than reactively. These partnerships will be essential not just for understanding H.R.1’s impact, but for maintaining continuity of care in an evolving environment.
3. Reassess Care Pathways & Strengthen Your Technology
As these changes start to take shape, one of the most important things leaders can do now is to streamline internal processes and prepare for new eligibility and reporting requirements.
“Really think about how you can be as streamlined and proactive in your processes as possible so that once these changes come online, your organization’s already ready,” Seibel emphasized.
Identify How Clients Move Through Eligibility Pathways
Start by taking a close look at your Medicaid eligibility workflows:
- Are you set up to evaluate enrollees across all the different eligibility routes they may qualify for?
- Do you have clear, consistent processes in place?
- Are you coordinating with local partners to help ensure people who are eligible actually secure and maintain that coverage?
Evaluate Your Technology Tools and Workflows
This is also a perfect time to take stock of your technology. Many organizations may find that their current systems aren’t built to support the upcoming changes.
Leaders can begin by asking:
- What’s working well today—and what isn’t?
- Which parts of our workflows could be more efficient or automated?
- What additional tools or functionality will we need to support more frequent eligibility checks, new reporting expectations, or shifts in care demand?
As Dr. Denny Morrison, Chief Clinical Officer at Eleos, noted, “The secret to success is figuring out what you’re not going to do.”
It may be hard to see when you’re worried about the future, but this is the time to rethink how your business operates. Anywhere technology can help automate routine tasks, simplify data collection, and strengthen reporting will be essential in navigating the shifts ahead.
Consider How AI Can Help
“AI technologies can be really useful in taking some of the burden off staff and looking to leverage existing data you already have,” Seibel explained.
Tools like Eleos do exactly that—reducing documentation burden, improving workflow efficiency, and freeing up staff time so teams can focus on care rather than paperwork.
CMS has also signaled growing interest in AI across the board—from supporting eligibility verification to exploring tools that streamline income reporting for individuals with gig-based work.
As Medicaid requirements intensify and reporting becomes more complex, having AI that captures insights from existing data and minimizes administrative tasks can make a meaningful difference.
To see how Eleos is helping organizations stay ahead of eligibility changes and protect care continuity, check out the Eleos OBBBA Scanner—our new tool that alerts providers to potential Medicaid eligibility risks in real time.
4. Dive Into Advocacy
With so many H.R.1 provisions still awaiting final guidance, this is a pivotal moment for healthcare leaders to engage in advocacy.
States will have substantial discretion in how they interpret and implement H.R.1, which means your voice—and the experiences of the people you serve—can meaningfully shape how these changes take hold.
A New Season, A Sweeter Path Forward
As we wrap up the year—and the last of our holiday treats—one thing is certain: Big changes are coming for healthcare—especially in behavioral health.
H.R.1 brings some of the most substantial shifts our field has seen in years. And while many of the details will be batched and rolled out over the next decade, the prep work begins now.
Getting the recipe right takes time. By strengthening data systems, aligning care pathways, deepening partnerships, and investing in technology—especially tools that reduce administrative burden—organizations can put themselves in a strong position to navigate whatever comes next.
And you don’t have to do it alone.
“We’re all in this together,” Seibel emphasized. “These are big changes coming, and together as a field, we can take them on.”
The National Council for Mental Wellbeing has a full cookie jar of resources—including an H.R.1 summary sheet, an implementation journey map, and this recorded webinar on the Rural Health Transformation Program—to help you prepare for the next chapter.
And if you’re looking for additional ways to get ahead as the details continue to take shape, schedule a demo to chat with us about how Eleos can help your organization prepare for the impact of H.R.1.
