Sep. 21 Federal Update: Final Rule Strengthens Mental Health and Substance Use Disorder Parity

The Departments of Labor, Health and Human Services, and the Treasury released guidance to strengthen parity for mental health and substance use disorder benefits and ensure compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA). The act prohibits health plans and health insurance companies from imposing greater restrictions on mental health and substance use benefits than on medical and surgical benefits. This includes financial requirements such as copays and treatment limitations such as visit limits or prior authorization requirements. 

The Field Assistance Bulletin provides additional clarity on the Department’s approach to enforcing statutory regulatory requirements. Key areas of focus include separate treatment limitations, medical necessity standards and the review process, and standards for determining network adequacy. 

ASPE Report Finds Purchasing Power of Coverage for Non-Recurring Adoption Expenses Drastically Falls  

Since 1986, non-recurring adoption expenses have been partly reimbursed to reduce upfront adoption costs for families and support permanency for children. Eligible expenses include legal fees, court costs, home studies, and necessary transportation, food, and lodging.  

Since 1986, the federal cap has remained fixed at $2,000 per child, with the federal government reimbursing 50% of costs, up to a maximum of $1,000 per child.  Over the past four decades, however, the purchasing power of that cap has diminished significantly. It currently retains approximately one third of its original value.  

A report from by the Assistant Secretary for Planning and Evaluation found that, if it had been adjusted for inflation each year, it would have equated to roughly $5,900 in FY25. As fewer children enter foster care, the federal budget implications are projected to be modest but could strengthen support for adoptive families by reducing upfront financial barriers that can stand in the way of permanency.  

ACF Awards Aim to Reduce Foster Care Entries and Modernize Child Welfare Infrastructure  

The Administration for Children and Families announced the award of Title IV-E Prevention Accelerator Grants, which aim to strengthen states’ capacity to implement and sustain evidence-based services that help families stay together and prevent unnecessary entries into foster care. Ten states were awarded one-time grant funding of $600,000 to $750,000 to build the infrastructure needed to successfully launch prevention programs and expand access to critical services through innovative approaches that often center sustainability, provider capacity, referral pathways, and data and reporting infrastructure. 

Shortly after, the ACF announced awards for 14 child welfare jurisdictions to identify gaps in current technology and business processes, make fingerprinting more accessible and convenient for caseworkers, and support improvements to background check systems to reduce delays, streamline administrative processes, and help agencies meet federal requirements that enhance child safety.  The grants range from $54,000 to $200,000 and aim to expedite foster family licensure and placements by training staff on new systems and workflows, establish performance measures, and develop sustainability plans to maintain improvements over time.  

Department of Education Publishes Learning Agenda Playbook to Support State Leaders and Improve Student Outcomes 

The Department of Education published a Learning Agenda Playbook, developed with states to strengthen their capacity, enable greater ownership of education, and drive improvement at the state and local levels. Learning Agendas are strategic, multi-year plans that guide state educational agencies in identifying their most pressing challenges, building evidence to answer key questions, and investing state resources where they will have the greatest impact. The playbook would strengthen states’ ability to make evidence-based decisions independently, helping shift education closer to the students, families, educators, and communities they serve. The announcement arrived alongside a review of initiatives led by the Administration to strengthen state capacity in teacher preparation for evidence-based literacy and prioritize materials aligned with phonics instruction.

CMS Adds Medicare Options to Help People Manage Common Chronic Conditions 

Beginning in Spring 2027, the Centers for Medicare & Medicaid Services will expand an existing initiative to offer technology-supported care options to Medicare beneficiaries who have substance use disorders, heart failure, chronic obstructive pulmonary disease, and nicotine dependence. The additions aim to improve access to home-based health care, support health and well-being, and encourage independence.  

The initiative utilizes the Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) Model, which enables participating organizations to provide virtual care, health coaching, and remote monitoring. Three out of four people with Medicare qualify for at least one ACCESS track. 

In growing the ACCESS Model, CMS aims to support comprehensive care for opioid, alcohol, and other substance use disorders, including integrated support for co-occurring depression and anxiety alongside care for substance use disorders and several chronic conditions.

Farm Bill Advances Within the Senate  

The Senate Committee on Agriculture, Nutrition, and Forestry advanced the Agricultural Act of 2026 by a vote of 12-11, allowing the bill to move to the full Senate for further consideration. 

The bill previously failed to advance after representatives requested a two-year delay on H.R. 1’s cost-sharing provisions for the Supplemental Nutrition Assistance Program, which would have increased the amount states are expected to contribute based on error rates. The House of Representatives passed the Farm, Food, and National Security Act of 2026 on April 30 by a vote of 224-200. The bill would invest in agricultural research; ensure the safety of food, drugs, and medical devices; protect access to nutrition programs for low-income Americans; and strengthen national security and border protections.   

Bill to Guide Parents’ Access to Resources Advances Within the House  

The House Committee on Ways and Means recently approved H.R. 10356, the Empowering Moms Act, which aims to create a clearinghouse of relevant, localized resources for pregnant and postpartum parents and parents of young children.  

Resources may include,  

• Mentorship opportunities 
• Health and well-being services  
• Financial assistance, work opportunities, and education opportunities   
• Material or legal support  
• Childcare, adoption, foster care, and short-term childcare services and resources  

House-Passed Bill Aims to Increase Oversight of Certain Federal Programs  

The House of Representatives recently passed the Fraud Prevention and Accountability Act, a bill requiring states to provide information to the Department of Justice to investigate or prosecute alleged fraud involving certain federally funded programs. Affected programs include, Medicaid, the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and certain federal payments and grants to state governments related to the coronavirus response. 

Requested information may include identity verification records, benefit disbursement logs, provider billing statements, and demographic information to investigate and prosecute fraud when requested. 

Congress Acts to Expand the Tax Deduction for Early Childhood Educators

The SEED Act, Supporting Early-Childhood Educators’ Deductions, recently passed Congress, expanding the $350 educator expense deduction, established for K-12 teachers in 2002, to also include pre-K and early childhood educators. The deduction aims to offset the costs teachers incur when purchasing classroom supplies, books, and other learning materials. The provision was included in H.R.5334, the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026.

Sector Updates from the Judiciary 

Supreme Court Rejects Trump’s Mail Ballot Restrictions For Midterm Elections 

The Supreme Court rejected the implementation of a March executive order that would have required states to adopt a uniform envelope style of mail-in ballots and submit lists of eligible voters to an online portal. Postal authorities would be empowered to return election mail to states if envelopes didn’t feature a barcode that matched the voter information on file. 

Voting rights advocates, 23 states, and the District of Columbia filed the lawsuit, arguing that the Constitution gives the president no authority to issue orders governing election administration. 

The Supreme Court’s ruling affirms the expected harm described by states and voting rights advocates but notably does not decide the plan’s legality. As a result, states will follow current procedures for the upcoming midterm elections.  

Appeals Court Approves Changes to Continuum of Care Grant Program 

The 1st U.S. Circuit Court of Appeals paused a Rhode Island judge’s ruling that barred the Department of Housing and Urban Development from imposing changes to grant funding awarded through the Continuum of Care program. 

The Continuum of Care program has supported states, local governments, and nonprofits in delivering support services to people experiencing homelessness, with a focus on veterans, ⁠families, and people with disabilities. It has often utilized a housing-first model, which prioritizes permanent housing placements without preconditions, like sobriety or employment.  

A coalition of 22 states, the District of Columbia, and advocates filed a lawsuit against the proposed shift toward temporary housing and supportive services, maintaining it would unlawfully reduce funding for permanent housing projects and endanger current housing placements. 

A lower court previously blocked changes to the grants, ruling the proposal violates the Administrative Procedure Act. However, the appeals court determined that the proposal did not require a notice-and-comment period and that the agency would face irreparable harm because of the Dec. 1 deadline for appropriating funds.  

HUD may continue its proposed changes to the Continuum of Care program.

Federal Court Rejects Education Department Order to Terminate DEI Grants 

The U.S. District Court for the District of Massachusetts rejected a Department of Education policy that permitted the termination of more than $600 million in K-12 teacher preparation grants that had been issued ‌through ⁠the Teacher Quality Partnership and Supporting Effective Educator Development grant programs.   

Judge Kelley determined the Education Department violated federal law by directing the termination of hundreds of millions of dollars in teacher-training grants that administration officials found related to diversity, equity, and inclusion principles. The ruling affirmed the expected harm to educators’ careers and their workforce and asserted the terminations violated the Administrative Procedure Act. 

The ruling does not restore the grant money as the claim would need to be brought before the Court of Federal Claims. 

Federal Court Stops the Exclusion of Certain Permanent Residents’ Eligibility for Food Aid  

The U.S. District Court for the District of Oregon permanently rejected the exclusion of certain lawful permanent residents from food aid benefits. Judge Mustafa T. Kasubhai determined that the non-citizen guidance violated the Administrative Procedure Act.  

The verdict follows a lawsuit filed by 22 states and the District of Columbia challenging an administrative guidance document issued by the Agriculture Department to implement changes made to the Supplemental Nutrition Assistance Program by H.R. 1. 

The guidance notably excluded refugees, people granted asylum, and certain Afghan and Ukrainian parolees from the list of people who can receive benefits after becoming lawful permanent residents. Likewise, the guidance did not specify that the standard five-year waiting period for SNAP does not apply to lawful permanent residents who were previously refugees, asylees, or other humanitarian immigrants.  

The lawsuit also addressed the date of the grace period that states were offered to address their error rates. The court found the administration’s deadline unlawful and arbitrary, preventing states from being penalized under the unlawful deadline. 

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