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On May 18, the U.S. Department of Health and Human Services’ (HHS) Substance Abuse and Mental Health Services Administration (SAMHSA) announced that it was distributing $3 billion in block grant funds authorized by the American Rescue Plan Act. According to SAMHSA’s press release, this marked “the largest aggregate amount of funding to date” for its mental health and substance use block grant programs.

This funding traces back to the American Rescue Plan Act, which was signed into law by President Biden on March 11. The $1.9 trillion COVID-19 relief package included numerous provisions to support the healthcare industry and healthcare providers, including $3.5 billion specifically for behavioral health programs. Of that $3.5 billion, $1.5 billion was allocated for SAMHSA’s Community Mental Health Services Block Grant (MHBG) Program and $1.5 billion for its Substance Abuse Prevention and Treatment Block Grant Program (SABG).

Allocation of $3 Billion for SAMSHA Block Grant Programs

A division of HHS, SAMHSA is the federal agency primarily responsible for supporting community-based mental health and substance abuse treatment and prevention services.  However, SAMHSA does not directly provide mental health or substance abuse treatment services. It provides funding to states, local communities, and private entities through various grant programs that, in turn, fund organizations that provide mental health and substance abuse services. SAMHSA’s two largest programs are the SABG and the MHBG mentioned above. 

The MHBG supports mental health services for adults with serious mental illness and children with serious emotional disturbance. Program funds flow from SAMHSA to the states to local government entities, nongovernmental organizations, and healthcare providers that deliver services. Rules concerning use of the funds are determined by each state, but federal law says that no more than 5% of the funding can be used for administrative expenses and at least 10% of funds must be spent on programs that address early, serious mental illness. 

Similarly, the SABG program supports services to prevent and treat substance use disorders.  Program funds flow from SAMHSA to the states to local government entities, administrative service organizations, and prevention and treatment service providers. Use of the funds is again determined by the states, but each SABG grantee must direct at least 20% of its funds towards prevention strategies.  

Both block grant programs distribute funds to every state (plus the District of Columbia and several U.S. territories) according to a formula specified by federal law. The formula considers a state or territory’s population, cost of services, and fiscal capacity. Generally, more populous states receive the biggest awards. State funding allocation tables for the $1.5 billion in MHBG awards can be found here and allocation tables for the $1.5 billion in SABG awards can be found here

Impact on Behavioral Health Providers

Per SAMSHA’s announcement, on May 18 the MHBG and SABG programs each officially dispersed $1.5 billion to the states and territories. Since then, the states and territories have allotted funds to service providers according to their state plans and requirements. Notably, this $3 billion in cumulative funding comes in addition to $2.5 billion in funding these programs received in March 2021 as a result of the December 2020 COVID-19 aid law. In comparison to this $5.5 billion, SAMSHA’s entire budget this year is only $6.0 billion.

The COVID-19 pandemic has undoubtedly highlighted the importance of behavioral health and these federal expenditures reflect an increased level of direct federal government support for behavioral health. As noted by HHS Secretary Xavier Becerra, “Behavioral health is a priority for the Department of Health and Human Services. The COVID-19 pandemic has made clear the need to invest resources in our nation’s mental health and address the inequities that still exist around behavioral health care. That’s why we are making this historic investment in mental health and substance use services.”  

Mental health and/or substance use healthcare service providers interested in accessing funds from these programs should refer to their state’s department of health website for more information. Information on other available SAMSHA grant programs is available here

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Chris Emper
Government Affairs Advisor, NextGen Healthcare
Chris Emper, JD, MBA, is government affairs advisor at NextGen Healthcare and president of Emper Healthcare Advisors—a health IT industry advisory and consulting services firm in Washington, D.C. that specializes in helping healthcare providers and technology companies successfully navigate and comply with complex regulations and value-based reimbursement models. Prior to forming Emper Healthcare...