LFC: Medicaid managed‑care behavioral health costs rose sharply; ABA spending surged as provider network grew

Matthew Goodlaw, an LFC program evaluator, told the committee that LFC's descriptive analysis of Medicaid managed‑care behavioral health between 2023 and 2025 shows rising costs and use even as enrollment declined after the pandemic unwinding. Key findings presented to the committee:

- Behavioral‑health claim spending to MCOs grew by about 47% (approximately a $230 million increase) between 2023 and 2025, according to LFC estimates.

- Utilization (units of service) increased roughly 22% (from about 8.4 million units to 10.2 million units in calendar year 2025).

- The largest area of spending growth was applied behavioral analysis (ABA) for people diagnosed with autism symptoms (LFC reported roughly 82–88% growth in ABA spending and nearly 79% growth for a commonly used adaptive behavior procedure).

- LFC estimated PMPM payments to MCOs and compared those to reported claims; staff cautioned that managed‑care rate increases and newly available services likely expanded provider networks and increased visits per member, making it difficult to separate increased access from potential overuse.

During questioning, the Medicaid director (Alana) and the Division Director of Behavioral Health Services (Nick Lucas) said rate increases were implemented to strengthen provider networks. Alana said LFC's rate comparisons showed New Mexico at or above Medicare equivalents for many behavioral services and that some reimbursement increases reached 150% of Medicare equivalents, which contributed to more providers entering the network and greater utilization. Nick Lucas said regions have added access points (for example, additional Narcan distribution sites) and that the state is monitoring overdose trends in several counties.

Committee members asked whether ABA increases reflect previously unmet need or inappropriate utilization; staff and agency officials said both effects may be present and that federal and state monitoring systems (including OIG tools) are in use to detect anomalies. LFC noted it cannot yet link claims to long‑term outcomes but proposed measures (employment continuity, diagnostic code decreases) that could be used to evaluate impact.

No action was taken; staff offered to provide follow‑up, facility‑level data (for example, progress on the Clovis behavioral‑health facility) and to continue working on outcome linkages and monitoring.