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5 Things Your Practice Needs to Know Before 2026 Gets Away From You
If you're reading this between sessions (we see you), here's the reality: 2026 is bringing a wave of regulatory and market changes that will affect how you deliver care, get paid, hire staff, and stay compliant. The good news? We've done the heavy lifting of parsing through CMS final rules, federal regulations, and industry reports so you don't have to.
Grab your coffee. Let's walk through what actually matters for your day-to-day practice—and what you need to do about it.
1. Telehealth: The Rules Are Shifting (Mark Your Calendar)
We've had a good run. Since the pandemic, Medicare has let us see patients via telehealth from anywhere—their homes, their cars, their kitchen tables. But the regulatory landscape is splitting in two directions, and behavioral health is (thankfully) on the better side of that split.
What's Changing for Everyone Else
After January 30, 2026, Medicare's broad telehealth waivers expire for most non-behavioral health services. That means your colleagues in primary care and other specialties will see their patients lose the convenience of home-based telehealth unless Congress passes a last-minute extension. Patients will need to travel to rural areas or eligible medical facilities for Medicare to cover telehealth visits.
What's Different for Behavioral Health
Here's where we caught a break. Congress previously made telehealth flexibilities permanent for behavioral health services. Geographic and originating site restrictions have been permanently removed for mental health and substance use services. Your Medicare therapy patients can continue receiving care from home indefinitely. Audio-only sessions remain covered long-term (as long as you document the patient's inability or unwillingness to use video).
But there's a catch—and it's a big one.
Starting January 1, 2026, Medicare requires an in-person, non-telehealth visit with each telehealth mental health patient at least once every 12 months. For new patients, that face-to-face must happen within six months before the first telehealth session begins. This requirement was waived during the pandemic but is now being enforced.
What This Looks Like in Practice
Imagine you've been seeing a Medicare patient via telehealth every two weeks for the past 18 months. They live an hour away, which is exactly why telehealth has been so valuable for them. Under the new rules, you'll need to get them in for an in-person visit before you can continue telehealth services—and then again every 12 months thereafter.
Action Steps
Audit your telehealth caseload now. Identify every Medicare patient who hasn't had an in-person appointment in the past year. Get them scheduled before their next telehealth session becomes a compliance issue.
Update your intake process. New Medicare patients need that in-person visit documented before you can see them via telehealth. Make sure your schedulers understand this requirement.
Revise your consent forms. Add language informing Medicare patients about the annual in-person requirement so there are no surprises.
Watch Congress. There's bipartisan support for telehealth, but as of early January 2026, no permanent fix has passed. If legislation extends flexibilities further, be ready to pivot—but don't count on it.
2. Medicare Is Actually Paying Us More (And Sparing Us From Cuts)
In a rare piece of good news, the 2026 Medicare Physician Fee Schedule brings a meaningful payment increase—roughly 3% across the board for psychotherapy, psychiatry E/M visits, and other Part B services. This comes from a one-time congressional add-on that boosted the conversion factor by about 3.3% for providers not in Advanced APMs.
The Cut That Didn't Hit Us
CMS finalized a controversial 2.5% "efficiency adjustment"—essentially a reduction in work RVUs for most procedural services. But here's what matters: time-based services are exempt. Therapy, counseling, care management, and other primarily time-based behavioral health services won't see this cut. CMS explicitly carved out behavioral health and care management codes, acknowledging that these services are already valued on time and intensity rather than potentially inflated procedure times.
Translation: While other specialties are absorbing a pay decrease, your psychotherapy codes (90834, 90837, etc.) and behavioral care management codes (BHI/CoCM) are protected.
New Opportunities for Integrated Care
If you work in integrated settings or collaborate with primary care, pay attention to the new add-on G-codes. CMS created three new codes that primary care practitioners can bill alongside their Advanced Primary Care Management services to indicate behavioral health integration or Collaborative Care services. These codes simplify billing for PCPs engaged in mental health integration—removing some of the administrative friction that has discouraged collaboration.
What this could mean for you: more referrals, more collaborative arrangements, and easier pathways to getting paid for the consulting and care coordination you're already doing.
Other 2026 Medicare Updates Worth Noting
Digital mental health treatments: Medicare is expanding coverage for FDA-approved prescription digital therapeutics for conditions like ADHD.
Rural and FQHC billing: Rural Health Clinics and Federally Qualified Health Centers can bill more flexibly for behavioral health integration services starting this year.
Action Steps
Verify your billing software is updated. Ensure your EHR or billing system has the 2026 CPT/HCPCS changes and new fee schedule loaded.
Educate your billing team. Make sure they know psych services got a ~3% increase and are exempt from the 2.5% efficiency cut. This prevents confusion when they see industry communications about Medicare rate reductions.
Factor the increase into your budget. Slightly higher payments could improve margins or allow for modest salary adjustments.
Explore the new integration codes. If you coordinate with primary care, discuss using the new BHI add-on codes. Educate partnering PCPs that these codes exist to simplify collaborative work.
Plan for 2027. The 3% boost is temporary—a one-year statutory increase. Without new legislation, rate pressure returns next year. Use 2026 to shore up finances and advocate through professional associations for continued support.
3. The Workforce Crisis: Still Here, But Help Is Coming
Let's be honest with each other: this isn't getting better fast enough. The demand for behavioral health services remains extraordinarily high, but the supply of licensed clinicians hasn't caught up. Federal projections show significant shortages of psychiatrists and addiction counselors persisting through 2030, with rural areas and public systems hit hardest.
The Burnout Numbers Are Stark
Surveys indicate that over 90% of behavioral health workers have experienced burnout, with about 62% reporting moderate to severe levels. This isn't just an HR problem—it's translating into turnover rates of 25-60% at some community mental health agencies. When experienced clinicians leave, waitlists grow, remaining staff burn out faster, and quality of care suffers. It's a vicious cycle that shows no signs of breaking in 2026.
The Bright Spots
LPCs and LMFTs can now bill Medicare. As of 2024, licensed professional counselors and licensed marriage and family therapists became eligible to bill Medicare Part B for mental health services. That's an estimated 400,000 additional clinicians who can now treat Medicare beneficiaries. By 2026, many of these providers will have completed the enrollment process, potentially expanding your hiring pool significantly. They bill at 75% of psychologist rates—a new revenue stream that wasn't possible before.
Interstate licensure compacts are going live. This is the development that could genuinely change the game for telehealth and workforce flexibility. The Counseling Compact officially launched in late 2025 (Arizona and Minnesota were first, with Ohio coming online in January 2026). The Social Work Compact has over 30 state signatories and is targeting 2026 implementation for multistate licenses.
What this means: If your state is in a compact, your therapists may be able to obtain authorization to practice in other member states without full separate licensure. You could accept clients in neighboring states, hire remote therapists living elsewhere, and expand your geographic reach—all while staying compliant.
Action Steps
Prioritize retention above all else. In this market, keeping your current clinicians is far more cost-effective than recruiting replacements (which could take months). Consider flexible scheduling, partial remote work for documentation days, regular supervision, CEU stipends, and genuine recognition of staff achievements.
Monitor burnout indicators actively. Watch for signs: irritability, canceled sessions, notes falling behind, increased sick days. Don't wait for resignations. Regular check-ins or anonymous surveys can help you detect problems before they become departures.
Leverage new Medicare-eligible providers. Expand hiring to include LPCs and LMFTs. Start credentialing early—Medicare enrollment can take months. By mid-2026, these clinicians could be significant contributors to your Medicare population.
Track licensure compact developments. Check whether your state has joined relevant compacts and when applications open. This could enable cross-state telehealth expansion or remote hiring.
Start recruiting early. If you know you'll need to hire in 2026, begin now. Consider signing bonuses, loan repayment assistance (if you qualify as an NHSC site), or robust training opportunities to stand out in a competitive market.
4. Insurers Are Under New Pressure—And You Should Use It
The payer landscape is shifting in ways that could actually benefit behavioral health providers. Two major developments are worth understanding and leveraging.
Prior Authorization Reforms
A federal rule finalized in early 2024 requires Medicare Advantage, Medicaid, CHIP, and ACA marketplace plans to implement electronic prior authorization systems with dramatically faster decision timelines starting January 1, 2026:
Standard requests: 7 calendar days (down from weeks or longer)
Urgent requests: 72 hours
Denials: Must include specific reasons
Metrics: Plans must publicly report authorization data
For behavioral health providers, this could mean faster decisions on inpatient psych admissions, specialty medications, and intensive services. If a payer doesn't meet these timelines, you now have regulatory backing to push back.
Mental Health Parity Rules Got Teeth
New federal regulations finalized in 2024 take full effect for individual and small-group plans in 2026. These rules require health plans to perform rigorous comparative analyses of how their mental health/substance use networks, reimbursement rates, and authorization practices compare to medical/surgical care.
If an insurance network doesn't have enough mental health providers, or pays them significantly less than comparable medical providers, the insurer could be found non-compliant. Federal officials have explicitly stated these rules "may push health plans to add mental health providers to networks" and address inadequate payment rates.
What this means for you: If you've been out-of-network with a plan that has poor mental health access, 2026 might be the year they open the network or offer better contract rates. If you're already in-network and discover pay disparities, you have leverage to renegotiate.
The Other Side: Cost Pressures and Potential Cuts
Insurers are also under financial pressure from high behavioral health utilization. Some payers are targeting specific services for rate reductions. In late 2025, North Carolina's Medicaid program attempted a 10% rate cut for ABA therapy—higher than cuts to other services—citing utilization growing "faster than expected." A court injunction paused the cuts, but it signals a trend: payers may increasingly target high-cost behavioral treatments for rate reductions or tighter authorization.
Action Steps
Hold payers to new PA timelines. If you don't get a response within 7 days (standard) or 72 hours (urgent), follow up assertively and cite the CMS rule. These are now legal requirements.
Audit your denial rates. Are you seeing fewer denials? Parity enforcement may be quietly causing insurers to relax restrictions. If denial rates remain high for certain services, document potential parity violations.
Position yourself for network opportunities. Reach out to insurer provider relations reps. Let them know you have availability and would be interested in joining networks that are expanding. If you're already in-network, research pay disparities and use them as leverage for rate discussions.
Watch Medicaid trends. If you serve Medicaid populations, monitor state policy proposals. Engage with your state professional association to stay informed and respond to harmful proposals.
5. Compliance Checkpoints You Can't Afford to Miss
Several regulatory deadlines and evolving requirements demand attention throughout 2026. Falling behind on any of these could mean penalties, audit problems, or operational headaches.
42 CFR Part 2 Alignment (Deadline: February 16, 2026)
The rules governing substance use disorder treatment records are undergoing their biggest change in decades. HHS finalized a rule aligning 42 CFR Part 2 with HIPAA, and full compliance is required by February 16, 2026.
What's changing:
A single patient consent can now cover disclosure of SUD treatment information for treatment, payment, and operations (previously, you needed separate consent for each disclosure)
Redisclosure is now permitted in accordance with HIPAA
Penalties and breach notification for SUD records align with HIPAA standards
Patients now have the right to an accounting of disclosures of their SUD information
What you must do: Update your Notice of Privacy Practices by the deadline to reflect these changes. Revise consent forms to include the new one-time consent option for SUD records. Train staff that SUD information can be shared more freely (with consent) without the previous siloing requirements.
Good Faith Estimates: Enforcement Is Ramping Up
The No Surprises Act requirement to provide Good Faith Estimates to uninsured or self-pay clients has been in effect since 2022, but enforcement discretion is ending. By 2026, expect regulators to start auditing and penalizing providers who ignore GFE requirements.
You should be providing written GFEs to every new uninsured or self-pay patient that list expected charges for planned services. If actual charges significantly exceed the estimate, patients can trigger dispute resolution—so ensure your estimates are reasonably accurate and your process is consistent.
State-Specific Requirements
Don't overlook state laws that may have taken effect in 2025 or early 2026:
Some states have enacted specific telehealth consent requirements
Supervision ratios or requirements may have changed for certain credentials
New data privacy laws in some states may affect how you handle client information
Assign someone to review recent state legislation and licensure board updates relevant to your practice.
Action Steps
Update your Notice of Privacy Practices by February 16. This is a hard deadline. Include the new SUD record provisions and distribute the updated notice to current patients.
Train staff on Part 2 changes. Especially if you treat substance use disorders, ensure everyone understands the new rules about information sharing and breach notification.
Audit your GFE process. Is every new self-pay or uninsured patient receiving a written estimate? Tighten this process now before audits begin.
Check your malpractice coverage. With telehealth expansion, new services, and potential cross-state practice via compacts, verify your insurance covers your current scope. Inform your insurer of any changes.
Create a compliance calendar. Map out key deadlines (February 16 for Part 2, ongoing GFE requirements, licensure renewals, mandatory trainings) so nothing slips through the cracks.
The Bottom Line
2026 brings both legitimate challenges and real opportunities for behavioral health practices. Telehealth flexibility remains largely intact for us (with new conditions). Medicare is paying more while sparing us from cuts hitting other specialties. The workforce crisis continues, but new provider types and licensure compacts offer some relief. Insurers face pressure to improve access and parity—pressure we can leverage. And the compliance landscape, while demanding attention, is navigable with proper preparation.
The practices that will thrive this year are the ones preparing now rather than scrambling later. Whether it's scheduling those in-person visits, credentialing new provider types, or tightening up compliance processes, small investments of time today prevent major disruptions tomorrow.
Your challenge this week: Pick the area above where your practice is most vulnerable. Block one hour on your calendar to start addressing it. Future-you will be grateful.
Have questions about implementing any of these changes? Hit reply—we'd love to hear what challenges you're facing and may address them in upcoming issues.
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Disclaimer: This newsletter provides general information for educational purposes and should not replace consultation with legal, billing, or compliance professionals familiar with your specific practice situation and jurisdiction. Regulations vary by state and payer, and requirements may change. Always verify current requirements with authoritative sources before making practice decisions.
Shanice
Author, Nudge AI
