Nearly two-thirds (31) of state Medicaid and Children’s Health Insurance Program (CHIP) plans cover behavioral health therapy for children and youth whether or not the children/youth have a diagnosed behavioral health disorder. Nearly one-third of children ages 3-17 enrolled in Medicaid or CHIP plans as of 2021 reported having mental, emotional, developmental, and/or behavioral needs, and about half of all children with a behavioral health diagnosis are not receiving necessary treatment or services. In response, states are prioritizing children’s behavioral health and increasingly implementing policies to strengthen access to behavioral health services, according to a recent analysis.
The National Academy for State Health Policy (NASHP) analysts reviewed state Medicaid coverage of behavioral health services in all 50 states and the District of Columbia based on coverage of procedure codes; beneficiary eligibility and medical necessity criteria (e.g., age, diagnosis); and service limits and prior authorization policies.
Findings include:
- At least 20 states allow providers to bill for therapy provided to children and youth using diagnostic codes that indicate symptoms (R-codes) and/or factors influencing their health (Z-codes).
- Over half (28) of all states do not require prior authorization or have a “soft limit” on the amount, duration, or scope of behavioral health therapy a child can access before prior authorization or further medical necessity review is required.
- All 50 states and Washington, DC, cover individual, family, and group therapy procedure codes. Most states cover additional therapy procedure codes (e.g., multiple-family group therapy).
“Intervening early to address children’s behavioral health needs supports children’s health and development, can mitigate the impact of a condition or symptoms, and helps prevent the need for more intensive and costly services,” according to NASHP. “States are increasingly adjusting eligibility and medical necessity criteria to cover services for children who do not have a diagnosed disorder, allowing children and youth to more easily access therapy and counseling services.”
These findings were reported in State Medicaid Coverage of Behavioral Health Therapy for Children and Youth.
The full text of State Medicaid Coverage of Behavioral Health Therapy for Children and Youth was published on January 5, 2026, by the National Academy for State Health Policy. A free copy is available (accessed January 14, 2026).
For more information, contact: Hemi Tewarson, Executive Director, National Academy for State Health Policy, 1233 20th Street Northwest, Suite 303, Washington, District of Columbia 20036; Website: https://nashp.org/
March 2026 00US26EUA0004