If you’re leading a community behavioral health organization, you may be facing uncertainty about how the One Big Beautiful Bill Act (OBBBA) will affect your operations. Representing one of the most significant policy shifts of our era, OBBBA is projected to potentially remove Medicaid coverage for approximately 10 million Americans—presenting an urgent call to action for behavioral health organizations.

Generic cost-cutting or minor efficiency tweaks just won’t cut it. Bold, strategic thinking is what will help orgs like yours navigate the landscape.

Seeing Crisis as Opportunity

The word “crisis” is daunting. But crisis can also spark transformation. OBBBA forces organizations to scrutinize their operations, service models, and priorities more rigorously than ever before.

The key lies in systematic analysis and decisive action. Resist the urge to make rushed or reactive changes—don’t panic, pivot.

Assessing Programs Strategically: What Should We No Longer Do?

A critical question in this new environment is: Which services or programs should we discontinue?

Service line evaluation:

Assess each program by financial performance, clinical outcomes, community impact, and mission alignment. Services that are consistently unprofitable, serve a very small client base without prospects for scalability, or duplicate other community offerings should be reconsidered.

Payer contract evaluation:

Expect that both public and private payers will pressure providers with rate cuts. Some contracts may no longer be viable and may need to be terminated.

Who should be involved:

Engage clinical staff, administrative personnel, board members, and potentially external stakeholders in decision-making. The goal is to bring multiple perspectives into your analysis while maintaining a willingness to make hard choices.

Though difficult, this process creates space to focus on the most sustainable and impactful services.

Managing Personnel Costs in a People-Intensive Sector

Behavioral health is inherently people-intensive: personnel costs typically represent 70–80% of an organization’s operating budget. When cuts are unavoidable, they must be handled thoughtfully:

• Use targeted restructuring rather than blanket layoffs.
• Explore role consolidation or hybrid staffing models (e.g. contractors or adjunct support).
• Preserve safe clinical supervision ratios; never compromise client care for cost savings.

This evaluation should also include an analysis of productivity metrics, caseload management, and service delivery efficiency. You might actually be able to maintain or improve service levels with fewer staff members through better organization, improved processes, or technology integration.

Driving Operational Efficiency with Technology

The COVID-19 pandemic accelerated adoption of telehealth and showed how technology can transform service delivery. OBBBA presents a new opportunity to scale innovation:

• Ambient scribing tools can reduce documentation burdens for clinicians, freeing them to focus more on care.
• Consumer-facing apps can help extend reach, reduce wait times, or provide supplementary support for clients who might not otherwise be able to access timely care.
• As administrative requirements grow—especially if Medicaid eligibility or reporting standards shift—AI and automation can help keep administrative loads manageable.

Redefining Community Benefit for 501(c)(3) Organizations

Most community behavioral health organizations operate under tax‑exempt status (501(c)(3)) and commit to serving people regardless of ability to pay. OBBBA’s effect on Medicaid coverage will likely increase demand for unreimbursed services, prompting organizations to re-examine their community benefit strategy:

• Recognize the cost of “free care”: Unreimbursed services still incur real costs (e.g., personnel, facilities, and operations).
• Set strategic boundaries: Work with your board to define how much uncompensated care the organization can sustain without jeopardizing financial viability.

Managing Increased Indigent Care Demand

Once a realistic uncompensated care threshold is established, consider applying utilization management strategies—similar to managed care contracts—to indigent care. This includes instituting internal prior authorizations and case management to control resource use.

Reducing No-Shows Early in Care

This is also a great time to reconsider your intake procedures with an eye toward reducing no-show rates for initial and second appointments.

The no-show rates for each of these appointments often exceeds 50%. Some organizations have addressed the initial appointment problem with open access (or same-day) scheduling, and when people do not show for those appointments, it’s difficult to determine why.

Some ideas to mitigate this include:

• Open access or same-day scheduling to reduce the delay between referral and the first appointment.
• Streamlined intake documentation to allow clinicians to focus on engagement rather than paperwork during the initial session.
• Single Session Therapy (SST): Because a substantial proportion of clients only attend one session, offer a clear single-session model. Evidence suggests many clients derive benefit from just one visit.
• Group therapy: This modality can increase capacity and efficiency while achieving outcomes comparable to individual therapy for many mental health conditions. Though documentation and training are barriers, new tools and fresh investment in group sessions can help overcome them.

Learning from Networks and Vendors

Because OBBBA impacts organizations nationally, peer collaboration and vendor partnerships become critical.

Leverage peer networks and associations to exchange strategies, lessons learned, and emerging best practices.

Engage vendors and technology partners not just as vendors but as strategic allies. Some vendors have visibility across many clients and can identify common challenges and successful approaches to overcoming them.

Considering Strategic Partnerships, M&A, and Alliances

In this new reality, preserving the ability to provide essential behavioral health services may require rethinking organizational structure:

• Start exploring mergers, acquisitions, affiliations, or strategic alliances early—don’t wait for a financial crisis.
• Evaluate potential partners based on complementary strengths, shared values, geographic advantages, and long-term sustainability.

The goal is not just surviving, but also building more resilient organizations that can deliver community value in a changing funding climate.‍

Next Steps for Leaders

OBBBA represents a watershed moment for community behavioral health systems. Navigating it successfully will require bold, strategic responses—not merely reactive cutbacks.

To respond effectively, leaders should:

1. Rigorously evaluate which programs and contracts to continue or discontinue.
2. Embrace technology to boost efficiency and reduce administrative burden.
3. Reassess and define community benefit obligations.
4. Explore strategic partnerships or restructuring.

While these changes may be painful in the short term, they hold potential to build a more sustainable and impactful behavioral health infrastructure for communities. With courage, strategic planning, and collaboration, organizations can adapt—and continue fulfilling their mission to provide vital care access for all.