"One Big Beautiful Bill" (H.R. 1): A Double-Edged Sword for Behavioral Health Data and Needy Populations

The recent enactment of the "One Big Beautiful Bill" (HR1) marks a significant shift in federal healthcare policy, promising widespread implications for states, providers, and consumers. While the bill's stated goals may encompass various aspects of American life, its specific provisions related to Medicaid and health insurance marketplaces, particularly those impacting data and data exchange, present a complex outlook for behavioral health, especially concerning needy populations and specialty providers.

HR1, largely a budget reconciliation bill, aims to enact several legislative priorities, including significant changes to Medicaid. The Congressional Budget Office (CBO) has estimated these changes could lead to a substantial increase in the uninsured population, potentially impacting millions. For behavioral health, where access to care is already a persistent challenge, any reduction in coverage poses a direct threat to individuals needing mental health and substance use disorder services.

The Intensified Need for Data in a Shifting Landscape

One of the critical, yet often understated, aspects of HR1's impact lies in its indirect, but profound, influence on healthcare data and data exchange. The bill's new requirements for eligibility, enrollment, and community engagement within Medicaid necessitate a robust and highly efficient data infrastructure at the state level. States are now tasked with:

• Frequent Eligibility Redeterminations: Starting December 31, 2026, states must conduct Medicaid eligibility redeterminations for expansion populations every six months, a significant increase in frequency. This demands real-time, accurate data on income, employment, and other qualifying factors.

  
  

• Community Engagement Tracking: HR1 mandates able-bodied adults without dependents to demonstrate community engagement (e.g., work, community service, education) for 80 hours per month to maintain Medicaid eligibility. States will need to establish intricate systems to track and verify these activities, requiring data exchange with various external entities, including employers, educational institutions, and community organizations.

  
  

• Preventing Dual Enrollment and Fraud: The bill includes provisions to prevent dual enrollment in multiple Medicaid programs and requires quarterly reviews of Death Master Files. This further emphasizes the need for streamlined, accurate data submission, verification, and storage systems.

  
  

Behavioral Health's Unique Data Challenges

Behavioral health has historically lagged in data interoperability compared to physical health. This is due to several factors, including stigma, fragmented care systems, varying privacy regulations (like 42 CFR Part 2, though HR1 does not explicitly address changes to this), and a less mature technological infrastructure in many specialty behavioral health practices.

Under HR1, these existing data challenges are exacerbated. As individuals face more stringent eligibility requirements and potential coverage losses, the ability of behavioral health providers to quickly and accurately ascertain a patient's coverage status, track their engagement requirements, and coordinate care across different sectors becomes paramount. Without seamless data exchange:

• Needy Populations at Risk: Vulnerable individuals, including those with severe mental illness or substance use disorders, often have complex social determinants of health. Losing Medicaid coverage due to administrative hurdles or inability to meet new requirements can lead to significant disruptions in their behavioral health care, potentially escalating crises and increasing uncompensated care burdens on providers.

  
  

• Burden on Specialty Providers: Specialty behavioral health providers, many of whom rely heavily on Medicaid reimbursement, will face increased administrative burdens to navigate these new eligibility requirements. They will need access to timely and accurate patient data to ensure continuity of care and appropriate billing, which can be challenging if state data systems are not adequately equipped or integrated.

  
  

• Hindrance to Care Coordination: Effective behavioral health care often requires coordination with primary care, social services, and other community resources. HR1's emphasis on verifying diverse eligibility factors for Medicaid members underscores the need for robust cross-sector data sharing. However, if these data highways are not built or are incomplete, the "ripple effects" of coverage losses and administrative hurdles will impede holistic care.

  
  

The Call for Robust Data Infrastructure and Interoperability

While HR1 does not directly allocate specific funding or mandates for behavioral health data interoperability, its indirect consequences highlight an urgent need for states and healthcare systems to prioritize and invest in:

• Enhanced State-Level Data Infrastructure: States will require significant financial investments in information technology and staffing to implement the new law's rigorous data submission, verification, and storage requirements for Medicaid and Marketplace programs. This includes establishing new data-sharing arrangements and infrastructure across various state agencies.

  
  

• Interoperable Health Information Exchange (HIE): The bill implicitly strengthens the case for robust HIEs that can facilitate the seamless exchange of patient data across different healthcare settings, including behavioral health. This includes promoting the use of standardized data formats and protocols to ensure that information is not only exchanged but also understood by disparate systems.

  
  

• Support for Providers: Policy makers and state agencies must recognize the administrative strain on providers, particularly small and specialty behavioral health practices. This could involve providing technical assistance, training, and resources to help them adapt to new data collection and reporting requirements.

The Role of Data Exchange Partners

Organizations like Health Information Exchanges (HIEs), Community Information Exchanges (CIEs), and interoperability consultancies play a vital role in bridging these gaps. They help specialty providers:

• Understand and comply with complex privacy regulations.

• Leverage shared infrastructure to access health and social care data.

• Participate in statewide and national data exchange efforts like the California DxF or TEFCA.

Without ongoing funding, these partnerships may be out of reach for the providers and populations who need them most.

Potential Opportunities for HIEs and CIEs in an HR1 Environment

1. Streamlining Eligibility and Enrollment:

   • Data Verification: HR1's requirements for frequent Medicaid eligibility redeterminations and new verification processes (e.g., quarterly Death Master File reviews) necessitate efficient data exchange. HIEs can provide real-time access to patient demographics, clinical history, and potentially other data points that can aid in verifying eligibility and preventing errors or fraud.

     
     

   • Reducing Administrative Burden: By automating the exchange of necessary information, HIEs can significantly reduce the manual paperwork and administrative burden on state agencies and providers, allowing them to better manage the increased volume of redeterminations.

     
     

2. Supporting Community Engagement Requirements:

   • Cross-Sector Data Sharing: HR1 mandates community engagement for certain Medicaid enrollees. CIEs are uniquely positioned to track and verify these activities by connecting healthcare data with information from social service organizations, educational programs, and employment services. This cross-sector data sharing is crucial for understanding an individual's full engagement picture.

     
     

   • Referral and Follow-up: CIEs can facilitate closed-loop referrals between healthcare providers and community-based organizations, ensuring that individuals meet their community engagement requirements and receive necessary social supports (e.g., housing, food assistance, job training) that impact their overall health and well-being.

     
     

3. Improving Care Coordination for Needy Populations:

   • Whole-Person View: Vulnerable populations often have complex health and social needs. HIEs and CIEs, especially when integrated, can create a comprehensive, longitudinal record that combines clinical data with SDOH information. This "whole-person" view allows providers to identify health inequities, address root causes of poor health, and deliver more coordinated and proactive care.

     
     

   • Identifying At-Risk Individuals: By leveraging sophisticated analytics tools, HIEs and CIEs can help identify at-risk patient populations, allowing for targeted interventions and better management of chronic conditions, including behavioral health issues, which are often intertwined with social challenges.

   • Preventing Gaps in Care: With potential coverage losses under HR1, HIEs and CIEs can help track individuals across different care settings and ensure continuity of care, even if their insurance status changes, by providing access to their medical and social service history.

   
   

4. Enhancing Data Exchange for Specialty Behavioral Health Providers:

   • Bridging Historical Gaps: Behavioral health has historically faced challenges in data sharing due to privacy concerns (e.g., 42 CFR Part 2) and less developed IT infrastructure. HIEs and CIEs offer a secure platform to integrate behavioral health data with physical health data, breaking down silos and enabling more holistic treatment.

   • Improved Treatment Planning: Access to a patient's full medical and social history, including mental health diagnoses, medications, and treatment plans, allows behavioral health providers to make more informed decisions, reduce misdiagnoses, and prevent medication errors.

   • Demonstrating Value: By participating in HIEs, behavioral health providers can contribute meaningful data to a patient's comprehensive health history, demonstrating the impact of their services on overall patient outcomes and potentially supporting value-based care initiatives.

In essence, while HR1 places new demands on data management, HIEs and CIEs offer a critical infrastructure to meet these demands, improve efficiency, and ultimately enhance the delivery of integrated, whole-person care for all, especially for the most vulnerable populations and the specialty behavioral health providers who serve them.

HIEs & CIEs Can Lead the Way

Despite challenges presented by HR1, Health Information Exchanges (HIEs) and Community Information Exchanges (CIEs) can provide the shared infrastructure, compliance support, and coordination needed to sustain behavioral health data exchange.

Opportunities to Address These Gaps

Here are proactive strategies HIEs, CIEs, and consultants (like Converge Health) can leverage to protect and support behavioral health connectivity:

Opportunity	Description
Affordable Shared Infrastructure	Offer tiered pricing models, plug-and-play APIs, and consent-management tools tuned for specialty behavioral providers
Funding Alternative Models	Work with states, counties, philanthropy, and health plans to co-create grants and subsidized services
Compliance & Technical Assistance	Empower small providers with training, onboarding support, and tailored consent workflows
Value‑Based Care Partnership	Support Medicaid managed care organizations with quality reporting and care coordination analytics
Advocacy & Public Policy	Promote state-level bills or rule-making to mandate interoperability support for behavioral health (e.g., California DxF)

OUR CALL TO ACTION

Now is the time for HIEs and CIEs to lead locally. By stepping in where federal support is disappearing, we can protect coordinated care for our most vulnerable populations.

If your organization is ready to build sustainable, community-driven data exchange solutions, let’s connect.