Coordinated Specialty Care for First-Episode Psychosis

April 3, 2017

1 The Challenge

Schizophrenia is a serious mental disorder with a lifetime prevalence near 1% that is associated with high levels of functional impairment. Currently, only 10% to 15% of people with schizophrenia work. The annual cost of schizophrenia in the United States in 2013 was estimated to be $155.7 billion, including significant direct and indirect costs. Delivery of a new treatment approach, called coordinated specialty care (CSC), to every young person experiencing the psychosis of early schizophrenia could change this state of affairs (1).

CSC deploys a new care model developed for young adults with first-episode psychosis that fosters recovery and attempts to prevent disability and may reduce hospitalization and costs. CSC includes evidenced-based psychopharmacologic management, with attention to general health, cognitive and behaviorally oriented individual or group psychotherapy, family support and education, supported education and employment, case management and, more recently, peer support (1,2). Studies of RAISE (Recovery After an Initial Schizophrenia Episode), a project funded by the National Institute of Mental Health, have demonstrated the benefits of CSC programs in the United States and how to implement them (3,4). These studies have also demonstrated that CSC programs are cost-effective.

Coordinated Specialty Care Includes:

  1. Evidenced-based psychopharmacologic management, with attention to general health
  2. Cognitive and behaviorally oriented individual or group psychotherapy
  3. Family support and education
  4. Supported education and employment
  5. Case management
  6. Peer Support

2 The Community Mental Health Block Grant and 21st Century Cures Act

In recognition of the value of CSC programs, in 2014 Congress added 5% to the
Community Mental Health Block Grant program. States and federal territories received an additional $25 million to share, with the requirement that the monies be used to develop and support evidence-based programs for individuals experiencing early psychosis. The 5% set-aside for CSC programs continued in 2015, and the allocation was doubled in 2016, providing an additional $50 million for states to share to develop CSC programs (1). In 2008, only two states had such programs. By 2016, 36 states had begun implementing one or more CSC programs. By 2018, that number will grow to 48 states (personal communication, R. Heinssen, National Institute of Mental Health, 2017).

The 21st Century Cures Act continues the allocation to early psychosis treatment, generally requiring states to use at least 10% of their Community Mental Health Block Grant funds on CSC for individuals with early psychosis (5). The good news is that the modest funding allocated through the Block Grant program, which is be maintained in the 21st Century Cures Act, has jump-started a remarkable transformation in the care of individuals with early psychosis that builds on evidence, advocacy, and efficiency.

The continuation of these resources is very promising.

3 Understanding the Problem

The incremental benefits of the Community Mental Health Block Grant and the 21st Century Cures Act will be insufficient to support further implementation of CSC if certain provisions of the Affordable Care Act (ACA) are eliminated and if Medicaid is eroded. The Block Grant funds, because of their limited size, at best build upon provisions of the ACA that have created critical pathways to care for young people who are experiencing the onset of schizophrenia (typically between the ages of 16 and 30).

The ACA and Medicaid provide the foundation of support for early schizophrenia care (6) in the following ways:

The ACA’s extension of insurance coverage until age 26 under parental health plans has greatly expanded access to private insurance among young people in the age range of vulnerability to schizophrenia onset. (Before ACA implementation, only full-
time students could be covered under parental plans.) In addition, affected individuals with limited means have access to subsidies in state health insurance marketplaces to pay for individual insurance if it is not provided through their workplace or they do not otherwise qualify for Medicaid. Insurance coverage provides access to early intervention services before schizophrenia becomes disabling.

To qualify for health insurance in the Medicaid program, individuals with schizophrenia do not have to first apply for disability benefits in the Social Security Supplemental Security Income (SSI) program, as they did before ACA implementation.

Low levels of employment among people with schizophrenia no longer create a barrier to obtaining health insurance, which was traditionally obtained as a workplace benefit.

If individuals are working full-time, then the ACA creates incentives for many employers to provide insurance for them as a benefit.

Alternatives to the ACA that are being considered for the individual insurance market, such as health savings accounts, do not help people with very low incomes, and tax credits are not helpful for people who do not pay federal taxes. Such individuals will lose coverage, and early psychosis programs will be unable to serve them without a loss of revenue. Efforts to reduce the number of individuals eligible for Medicaid or to cap their benefits will erode the foundation of funding for these programs.

5 Implementation Strategy

Policymakers should continue to support CSC services by expanding its resource base. This requires growing the Block Grant supplement and set-aside for CSC. It is also important to find ways to keep young people at risk of psychosis on some form of appropriate insurance, either private insurance through work or a parent’s policy or public insurance, such as Medicaid. Individuals should be eligible for Medicaid before they become disabled. Medicaid coverage may keep them from ever needing SSI—either for its cash benefits or for its pathway to Medicaid.

Policymakers should continue to support Coordinated Specialty Care services by expanding its resource base.


  1. Dixon L: What it will take to make coordinated specialty care available to anyone experiencing early schizophrenia: getting over the hump. JAMA Psychiatry 74:7-8, 2017.
  2. Heinssen RK, Goldstein AB, Azrin ST: Evidence-based treatment for first-episode psychosis: components of coordinated specialty care. Bethesda, MD, National Institute of Mental Health, RAISE, 2014. Available at
  3. Rosenheck R, Leslie D, Sint K, et al.: Cost-effectiveness of comprehensive, integrated care for first episode psychosis in the NIMH RAISE Early Treatment Program. Schizophr Bull 42:896-906, 2016.
  4. Kane JM, Robinson DG, Schooler NR, et al.: Comprehensive versus usual community care for first-episode psychosis: 2-year outcomes from the NIMH RAISE Early Treatment Program. Am J Psychiatry 173:362-372, 2016.
  5. H.R.6 21st Century Cures Act. Available at
  6. Goldman HH: Will health insurance reform in the United States help people with schizophrenia? Schizophr Bull 36:893-894, 2010.

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