In a historic move to overhaul its behavioral health care system, Colorado implemented significant reforms in July 2024 to expand access to care, improve provider funding, and modernize a system that hadn’t been significantly updated in over six decades. The changes reflect the state’s commitment to equity, sustainability, and modern health care practices as it addresses one of the most pressing challenges facing its communities today.
Despite Colorado’s reputation as one of the healthiest states regarding physical wellness, its behavioral health statistics have painted a starkly different picture. In 2021, the state recorded the sixth-highest suicide rate in the nation. By 2023, it remained in the lower half of U.S. states regarding access to mental health care for adults and children. In response to these persistent gaps, Colorado lawmakers and health leaders pushed through reforms designed to reset the foundation of its behavioral health safety net.
The new laws, which took effect on July 1, 2024, redefine the core elements of behavioral health care in Colorado. For the first time since their original establishment over 60 years ago, the definitions of safety net services and providers have been updated to reflect the evolution of modern mental health and substance use treatment. This includes integrating housing support, care coordination, case management, and services tailored for individuals with complex social and health needs.
Colorado’s Medicaid program, managed by the Department of Health Care Policy and Financing (HCPF), now aligns with the Behavioral Health Administration’s (BHA) updated licensing structure. Together, these agencies enforce new regulations prioritizing underserved and high-need Coloradans. A key innovation in this reform is the state’s transition to a value-based payment model that compensates providers based on the actual cost of delivering care, rather than flat fees.
This new funding approach incentivizes providers to care for patients facing layered challenges, such as homelessness, multiple health conditions, and lack of support systems, by offering higher reimbursement rates that reflect the true scope of work. For example, a provider offering day programs, housing support, and health care coordination would receive more sustainable and predictable payments than a small practice focused solely on psychotherapy. The goal is to ensure providers are equipped not just to deliver care, but to do so consistently and effectively in high-demand situations.
Stakeholders say this change will create a seismic shift in how behavioral health care is delivered and funded in the state. Daniel Darting, CEO of Signal Behavioral Health Network, emphasized that the previous system depended heavily on nonprofit providers operating with a “mission mentality,” but was plagued by funding uncertainty. Darting praised the new model for offering much-needed stability and treating behavioral health care with the same seriousness as other medical services.
The reform also opens new pathways for smaller providers to participate in the state’s behavioral health infrastructure. Previously, only large, comprehensive providers could access certain levels of state support. Under the new rules, small and medium-sized providers can collaborate and jointly apply for safety net status through the BHA. This collective model allows multiple organizations to share responsibilities, such as care coordination, and qualify for enhanced funding. It breaks down a significant barrier that prevented smaller agencies from receiving the same support as their larger counterparts.
Breeah Kinsella, Executive Director of the Colorado Providers Association, said the collaborative model is a breakthrough. She noted that many smaller organizations have been doing vital work in their communities without access to sustainable funding. Now, a structured path to financial support is only available to a few.
However, while the reform promises progress, state officials and providers acknowledge the challenges ahead. Implementing large-scale change involves navigating new licensing procedures, reimbursement structures, and care standards. To assist with the transition, HCPF has rolled out technical assistance programs to help providers adapt to the new system and meet the updated requirements.
Charles Davis, CEO of Crossroads’ Turning Points in Pueblo, described the reforms as long overdue but emphasized the complexity of the behavioral health field. He remains hopeful that these changes will continue to improve care delivery, especially in underserved regions. Chris Lindley, Chief Population Health Officer at Vail Health, echoed this sentiment, noting that while the desire for change is universal, regulatory hurdles still exist.
At its core, the reform represents more than just a shift in funding or definitions. It is a cultural and structural reimagining of behavioral health care in Colorado. For decades, stigmas around mental health were embedded in policies and budgets, relegating it to the margins of the broader health system. These new reforms aim to reverse that pattern by embedding mental health into Colorado’s health care landscape with the same weight and respect as physical health.
State leaders say this is only the beginning. The transformation of the behavioral health system will require ongoing commitment, flexibility, and collaboration between state agencies, regional entities, and providers on the ground. Yet, for the first time in a long time, there is a sense of unified momentum behind making behavioral health care accessible, dignified, and fully integrated into the state’s health priorities.
Colorado’s behavioral health reforms mark a critical step toward a future where every resident can access the full continuum of care regardless of location, income, or complexity of need. The state is setting a new standard for how behavioral health systems can be transformed with purpose and equity by modernizing definitions, stabilizing funding, and encouraging innovation and collaboration.
