The U.S. Department of Health and Human Services (HHS) continues to emphasize its commitment to strengthening behavioral health care, including mental health and substance use treatment. In June, the agency announced more than $700 million in new funding to expand access to mental health and addiction services nationwide. HHS is pairing this investment with heightened oversight, signaling that expanded funding will go hand‑in‑hand with stronger accountability expectations. Secretary Kennedy has intensified efforts to address healthcare fraud and reinforce expectations that providers deliver measurable outcomes aligned with value‑based care models.1
In May 2026, HHS unveiled another major initiative—an action plan aimed at curbing psychiatric overprescribing. While acknowledging that psychiatric medications remain an essential component of treatment, the Department emphasized that they should not serve as the first or only intervention for many individuals. Federal officials outlined a strategy focused on education, policy development, and monitoring prescribing trends to promote safer, more balanced care.2
As part of this effort and to operationalize this initiative, HHS issued a Dear Colleague Letter to behavioral health providers. The letter urges organizations to adopt multidisciplinary approaches, prioritize evidence‑based non‑pharmacological interventions as part of treatment plans that are individualized and comprehensive. It also reinforces that decisions regarding psychiatric medications should be made collaboratively between provider and patient, grounded in informed consent and shared decision‑making.3
These HHS initiatives are occurring alongside a parallel increase in oversight activity from the Office of Inspector General (OIG). In March 2026, the OIG announced a new evaluation examining treatment planning and medication monitoring for children in foster care who are prescribed psychotropic medications. The initiative follows earlier OIG findings that one in three foster children prescribed psychotropic drugs in FY 2015 did not receive required treatment planning or medication monitoring. According to the agency, psychotropic medication use in this population remains high, prompting the need for further federal review. The current evaluation focuses on five states and will assess whether prescribed medication regimens include the required monitoring and align with comprehensive, individualized treatment plans. The project is underway, with completion expected in FY 2028.4
The OIG’s attention to behavioral health prescribing is not limited to child welfare systems. In May 2026, the agency announced another behavioral‑health‑focused work plan update, announcing a review of Medicare payments for Spravato (esketamine). Spravato, a Schedule III controlled substance, is approved for adults with treatment-resistant depression and is associated with high cost and intensive administration requirements. The OIG notes that billing for Spravato may be susceptible to fraud, waste, and abuse.5
Although the work plan notice does not outline the full scope of the audit, it is reasonable to expect that reviewers will assess whether Medicare claims clearly demonstrate medical necessity for this advanced treatment. In line with other recent OIG and HHS initiatives focused on overprescribing, documentation reviews will likely examine whether providers recorded unsuccessful non‑pharmacological interventions or trials of lower‑cost antidepressant options before initiating Spravato. The evaluation may also consider whether informed consent was properly obtained and whether patients were meaningfully involved in the shared decision-making process when selecting Spravato as a treatment pathway.
Provider Impact
Now is the time for behavioral health providers and organizations to take a hard, honest look at their internal policies, procedures, and day‑to‑day clinical practices, particularly those related to prescribing, medication monitoring, informed consent, and treatment planning. Federal agencies have signaled that documentation must not only exist but must reflect thoughtful clinical reasoning, patient involvement, and adherence to evidence‑based standards.
Organizations should begin by evaluating their prescribing protocols to determine whether they reflect current best practices and include clear processes for assessing medication efficacy. Providers must be able to demonstrate when a medication is working, when it is not, and when a change in treatment course is clinically indicated. This requires structured monitoring, consistent follow‑up, and documentation that captures both patient response and provider decision-making.
Medication monitoring is an essential component of safe and effective prescribing. It should be thorough, ongoing, and clearly documented in the clinical record to support the medical necessity of continuing, adjusting, or discontinuing a medication. Inadequate monitoring is increasingly viewed by regulators as a red flag for potential overprescribing or insufficient clinical oversight.
Informed consent practices also warrant close review. Providers should ensure that consent is more than a checkbox or a templated phrase such as “safety reviewed and patient expressed understanding.” Policies must outline how informed consent is obtained, what information must be shared, how patient comprehension is assessed and documented, and when consent should be revisited or updated. Organizations should also review state‑specific requirements, which may provide additional guidance on structuring internal consent procedures and documentation expectations, including frequency of updated consent.
Treatment planning is another critical area requiring attention. Provider organizations should assess whether their current workflows support the development of individualized, measurable, and clinically relevant treatment plans. Psychiatric medications should be reflected as one intervention within a broader therapeutic strategy that includes non-pharmacological modalities. A strong treatment plan serves as the foundation for demonstrating medical necessity and helps providers track patient progress, or lack thereof, across all interventions. Regular updates ensure that the plan remains aligned with the patient’s evolving needs and goals.
Strengthening these foundational elements now will not only support compliance with emerging federal expectations but will also enhance the quality, safety, and integrity of care delivered to patients. With increased federal funding tied to clinical outcomes under value‑based care models, and a concentrated national effort to reduce psychiatric overprescribing, providers are at a critical juncture. This moment calls for a deliberate, organization‑wide review of policies, protocols, workflows, and clinical practices to ensure alignment with HHS initiatives and, most importantly, to deliver the highest standard of care to the individuals they serve.
Veronica Richardson, MHA, RHIA, CHPS, CHC is a Senior Compliance Consultant with First Class Solutions, Inc. Learn more at www. FirstClassSolutions.com or contact her at [email protected].
Footnotes
- U.S. Department of Health and Human Services. (2026, June 17). Secretary Kennedy announces over $700 million in new funding to address mental illness, addiction, homelessness. https://www.hhs.gov/press-room/secretary-kennedy-announces-new-funding-mental-illness-addiction-homelessness.html
- U.S. Department of Health and Human Services. (2026, May 4). HHS launches MAHA action plan to curb psychiatric overprescribing. https://www.hhs.gov/press-room/hhs-launches-maha-action-plan-curb-psychiatric-overprescribing.html
- Substance Abuse and Mental Health Services Administration. (2026, May 4). Dear Colleague Letter: Psychiatric medication and nonpharmacological treatments. https://www.samhsa.gov/sites/default/files/dcl-psychiatric-medication-nonpharmacological-treatments.pdf
- U.S. Department of Health and Human Services, Office of Inspector General. (2026, March 16). Treatment planning and medication monitoring for children in foster care receiving psychotropic medication (OIG Work Plan Project). https://oig.hhs.gov/reports/work-plan/browse-work-plan-projects/treatment-planning-and-medication-monitoring-for-children-in-foster-care-receiving-psychotropic-medication/
- U.S. Department of Health and Human Services, Office of Inspector General. (2026, May 7). Medicare payments for Spravato (OIG Work Plan Project). https://oig.hhs.gov/reports/work-plan/browse-work-plan-projects/medicare-payments-for-spravato/
