Yes, mental health providers in the U.S. may stop treating patients when insurance funding runs out, as they are generally not obligated by ethics codes to provide indefinite pro bono care. However, providers have ethical and legal obligations to ensure patients are not abandoned and to facilitate a smooth transition of care.
Here are the key considerations in 2025:
Ethical Obligations: Professional ethics codes (such as the APA's) generally require the termination of therapy when the client is no longer benefiting from treatment, but they also require that the patient not be abandoned. This means providers must take steps to ensure continuity of care, such as discussing the change in financial status in advance, providing referrals to more affordable options (e.g., community mental health centers, sliding scale clinics, or group therapy), or offering a temporary payment plan.
Legal Protections (MHPAEA): The federal Mental Health Parity and Addiction Equity Act (MHPAEA) requires insurers to provide coverage for mental health and substance use disorders on par with medical and surgical benefits.
New 2025 regulations strengthen this act by requiring insurers to document and prove that their non-quantitative treatment limitations (NQTLs), such as prior authorization or network adequacy standards, are not more restrictive than those for medical benefits.
If a patient is being released due to a limitation that violates parity (e.g., an arbitrary session limit not based on medical necessity and not applied to medical conditions), the insurer may be in violation of the law. Patients can file complaints with the Employee Benefits Security Administration or the No Surprises Help Desk.
Provider Discretion: While the law prohibits discriminatory limits by insurers, it does not mandate that providers treat patients for free once benefits are exhausted. Providers can generally terminate the professional relationship if a patient cannot pay, provided the termination is handled ethically and does not constitute abandonment.
Medicare
and Medicaid Changes: Recent 2025 legislative changes and potential federal
funding cuts could impact coverage. For example, Medicare telehealth
flexibilities for mental health services (which currently allow for phone-only
sessions and waive in-person visit requirements) are set to expire unless
Congress acts. Providers must be aware of these changes and communicate them to
patients using tools like an Advance Beneficiary Notice of Noncoverage (ABN) if
a service is no longer covered.
In essence, while providers can stop treatment for non-payment, the process must be ethical and prioritize the patient's well-being and continued access to care, even if it is through a different, more affordable channel.
In 2025, U.S. mental health providers generally cannot immediately "release" or abandon patients solely because insurance funding has run out. Ethical guidelines and federal laws require providers to ensure a safe transition of care to prevent patient abandonment.
Legal and Ethical Requirements
Prohibition of Abandonment: Mental health professionals are ethically and legally bound to avoid "patient abandonment." If insurance coverage ends, providers must typically provide a reasonable notice period and assist in finding alternative care or lower-cost options.
Mental Health Parity Laws: The Mental Health Parity and Addiction Equity Act (MHPAEA) requires insurers to cover mental health services at the same level as physical health services. As of January 1, 2025, new federal regulations strengthened these protections, prohibiting insurers from applying more restrictive "nonquantitative treatment limitations" (such as arbitrary session limits) than those applied to medical care.
Transition of Care: In cases where a provider is no longer covered (e.g., they leave a network), many states and federal rules require a "transition of care" period (often 30–90 days) where the insurer must continue to pay for treatment at in-network rates to ensure stability for the patient.
Key 2025 Regulatory Changes
Parity Enforcement: While new 2024 parity rules were set for 2025, some enforcement aspects faced legal challenges. However, the core 2008 parity law remains in effect, ensuring that mental health benefits cannot be more restrictive than medical benefits.
Telehealth Flexibilities: As of late 2025, many Medicare telehealth flexibilities for mental health were extended through January 2026, preventing a sudden loss of access for patients receiving remote care.
Inpatient Access: The Restoring Inpatient Mental Health Access Act of 2025 was introduced to lift Medicaid exclusions for certain inpatient facilities, potentially expanding funding for high-need patients who might otherwise have been discharged due to lack of coverage.
What
Happens if Funding Runs Out?
If your insurance stops paying in 2025, your provider should:
Provide Referrals: Offer a list of providers who accept your current insurance or operate on a sliding scale.
Ensure Stability: Continue treatment long enough to ensure you are not in a crisis during the transition.
Offer Self-Pay Options: Discuss "private pay" rates or payment plans if you wish to remain with that specific provider.
If you believe your insurance has unfairly cut off funding, you can contact the Employee Benefits Security Administration at 1-866-444-3272 or use the CMS No Surprises Help Desk for assistance.
Comments
Mental Health Providers should not admit Addicts until they have “hit bottom” and have decided to “get well”.
Norb Leahy, Dunwoody GA Tea Party Leader
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