Funding Strategies for County Behavioral Health Crisis Care
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America’s 3,069 counties are a cornerstone of the nation’s health systems, investing over $80 billion annually in community health, which includes crisis care services. County-based behavioral health programs operate in 23 states, serving 75 percent of the U.S. population. Counties also deliver Medicaid-eligible services and assist with bridging funding gaps in administering the program. By providing wrap-around human services supports such as housing assistance, employment services, and food security programs, counties strengthen crisis care and ensure timely community-based support for individuals facing mental health and substance use challenges.
County-based behavioral health programs operate in 23 states
America’s 3,069 counties are a cornerstone of the nation’s health systems, investing over $80 billion annually in community health, which includes crisis care services. County-based behavioral health programs operate in 23 states, serving 75 percent of the U.S. population. Counties also deliver Medicaid-eligible services and assist with bridging funding gaps in administering the program. By providing wrap-around human services supports such as housing assistance, employment services, and food security programs, counties strengthen crisis care and ensure timely community-based support for individuals facing mental health and substance use challenges.
Counties can leverage diverse funding streams and intergovernmental and cross-sector partners to improve coordination of care for individuals with mental illness and substance use disorders.
Primary Behavioral Health Funding Streams
Creative Funding Strategies
Counties across the country are developing innovative strategies to fund behavioral health care.
Blending occurs when financial resources from various funding streams are combined into a unified pool of commingled funds to support an initiative or acquire specific services.
Braiding combines multiple funding streams to provide specific services simultaneously, requiring interagency coordination and collaboration.
Sequencing organizes different sources of funding to separate and sequentially provide specific services.
Reducing Barriers
Counties are applying a variety of creative solutions to overcome barriers to behavioral health care funding.
Strategy
Counties can blend, braid and sequence various funding sources from federal, state and local governments, as well as private grants and donations.
County in Action
Missoula County, Mont. leverages funding from Montana's HB 872, which includes a historic $300 million investment in behavioral health and developmental disabilities service systems. This bill supports the Behavioral Health Systems for Future Generations initiative aimed at enhancing infrastructure, improving access to care, and ensuring long-term sustainability.
Strategy
Leverage state and federal funding sources, such as Medicaid, IMD waivers and opioid settlement funds to cover the cost of care while working to establish comprehensive insurance reimbursements through state, federal and private collaboration.
County in Action
Middlesex County, Mass., leverages the MassHealth Behavioral Health Initiative to fund Community Behavioral Health Centers (CBHCs) through a Medicaid 1115 demonstration waiver, which enhanced reimbursements for outpatient and crisis care. With this state tool, the county is further supporting expanded mobile crisis and preventive services, thereby reducing dependence on costly emergency and inpatient care.
Strategy
Encourage community involvement to increase awareness and support for behavioral health initiatives, which can result in additional funding through local fundraising efforts, non-profit or community organization resources and philanthropic donations.
County in Action
In 2022, The Leona M. and Harry B. Helmsley Charitable Trust awarded a $4 million grant to Pivot Point, the Pennington County (S.D.) Crisis Stabilization Unit to fund the first 36 months of operations in the new facility.
Counties eye potential Medicaid reimbursement remedies
Increasing the number of beds in mental health treatment facilities eligible for Medicaid reimbursement would empower counties to do more to help their residents.
Counties Recognize Mental Health Awareness Month
The National Association of Counties (NACo) again this year will mark Mental Health Awareness Month throughout the month of May with counties advocating for solutions that support the wellbeing of residents and address the nation’s mental health crisis.
The Michelle Alyssa Go Act: Why Reforming the IMD Exclusion Matters for County Behavioral Health
Reintroduced in the U.S. House of Representatives in September 2025, the bipartisan Michelle Alyssa Go Act (H.R. 5462) aims to modernize the IMD exclusion and expand access to care.
CMS issues guidance on six-month Medicaid renewals
On March 6, the Centers for Medicare & Medicaid Services (CMS) released a letter to State Medicaid Directors with implementation guidance on six-month Medicaid renewals required under H.R. 1.
White House Executive Order establishes national substance use disorder response
On January 29, the White House issued an Executive Order (EO) establishing the Great American Recovery Initiative, a new federal effort aimed at coordinating a national response to substance use disorder (SUD).
Breaking the Cycle: Behavioral Health Diversion Strategies for Counties
This interactive fireside chat brings together county leaders and behavioral health experts to explore how communities are building the diversion infrastructure to change outcomes.
Leveraging Opioid Settlement Funds for Housing Supports: Strategies for Counties
This webinar will highlight practical strategies for using opioid settlement funds to support housing initiatives at the local level.