S2356

The ADAPT Act, S.2356, expands the definition of reimbursable psychological services under Medicare, Medicaid, and CHIP to include those provided by advanced psychology trainees under general supervision. This means doctoral interns and postdoctoral residents, supervised by licensed clinical psychologists, can now bill for their services, significantly increasing the available workforce for mental and behavioral health. This change directly addresses the growing demand for mental health services and the current shortage of licensed professionals, making care more accessible and affordable for beneficiaries. The money trail for this legislation flows directly to healthcare providers and insurers. By expanding the types of services that can be billed, the Centers for Medicare & Medicaid Services (CMS) will increase payments to facilities and practices employing these trainees. Insurers like Centene ($CNC) and Humana ($HUM), which manage large Medicare and Medicaid populations, will see an expansion in covered services, potentially leading to increased utilization and claims processing. Hospital systems with psychiatric units or outpatient mental health clinics, such as Universal Health Services ($UHS) and HCA Healthcare ($HCA), will benefit from the ability to bill for services previously uncompensated when provided by trainees. Diagnostic and laboratory service providers like LabCorp ($LH), which often partner with mental health facilities, will also see increased demand. Historically, similar expansions of reimbursable services under federal programs have led to increased revenue for providers. For example, when the Medicare Access and CHIP Reauthorization Act (MACRA) was enacted in 2015, it shifted payment models and generally stabilized physician reimbursement, leading to consistent growth for healthcare service providers. While not directly comparable in scope, the principle of expanding covered services under federal programs has consistently translated into increased revenue opportunities for the healthcare sector. The bill's effective date of one year post-enactment provides a clear timeline for implementation and market adaptation. Specific winners include large hospital systems with robust mental health programs, such as Universal Health Services ($UHS) and HCA Healthcare ($HCA), which can integrate these trainees into their service delivery models. Managed care organizations like Centene ($CNC) and Humana ($HUM) will also benefit from the expanded network of providers and services for their enrollees. Diagnostic and laboratory companies like LabCorp ($LH) will see an indirect benefit from increased patient encounters. There are no clear losers from this expansion, as it primarily adds capacity and revenue streams to the existing healthcare infrastructure. What happens next is that the bill, having been referred to the Committee on Finance, will undergo review. If it passes committee, it moves to the full Senate for a vote. If enacted, CMS will develop the necessary guidance and coding, including a new GC modifier code, within one year, with the changes taking effect one year after enactment. This provides a clear runway for healthcare organizations to prepare for the new billing opportunities.