Medicaid Cuts, AI Lawsuit, and a New Federal Push on Antidepressants

Each week brings new conversations about mental health, technology, and care. Between Sessions gathers what's worth your attention - so you can stay informed without adding to your workload.

Aurora Mental Health and Recovery, a Colorado community provider, will eliminate 111 positions by June 30 - driven by a $13 million combined hit from a Medicaid reimbursement cut and a state reconciliation payment, affecting therapists and transition support staff.

👉 Why it matters: Aurora is one of several community centers reducing capacity this year - referral options and client acuity may shift as safety-net services shrink.

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Pennsylvania sued Character.AI this week after a chatbot named "Emilie" described itself as a licensed psychiatrist, claimed a Pennsylvania medical license, and gave a state investigator a fabricated license number - the first lawsuit of its kind brought by a U.S. governor.

👉 Why it matters: The legal standard being applied is medical licensing law, not AI regulation - other states can follow this path without waiting for new legislation.

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HHS Secretary Kennedy announced a federal push on May 4 to reduce SSRI prescribing - including new Medicare and Medicaid payments for clinicians who support tapering, training modules, and guidance toward alternatives like therapy, nutrition, and physical activity.

👉 Why it matters: Clients on antidepressants may start hearing this from their primary care providers - knowing what the policy says, and how to answer questions clients may bring in, is worth having ready.

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OpenAI launched Trusted Contact on May 7 - an opt-in feature letting ChatGPT users designate someone to be notified if human reviewers flag a conversation for serious self-harm risk, without sharing transcript details.

👉 Why it matters: Clients are already having personal conversations with AI chatbots - this feature changes how the platform responds in a crisis, and clients may bring it up.

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A WBUR report this week found clinicians are treating AI chatbot use as a standard intake question - not just whether clients use them, but how often and what for. A recent KFF poll found 16% of adults turned to AI for mental health support in the past year, with rates significantly higher among younger adults.

👉 Why it matters: Clients using AI between sessions may arrive with prior processing already done - it's worth knowing what that looked like.

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A new report on independent mental health practice - drawn from data across 245,000 practitioners - found that 43% of clinicians had no business training when they started, and that the average self-pay rate runs $40 above what insurance reimburses.

👉 Why it matters: Useful numbers for any conversation about fee-setting or the insurance question - especially if the tension between access and sustainability has felt hard to name.

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A Psychology Today piece published this week by J. Wesley Boyd, MD, PhD, of Harvard Medical School makes a quietly striking case: nursing homes are now the second-largest institutional setting for adults with serious mental illness in the U.S. - behind only prisons - with 1.2 to 1.3 million residents and almost no psychiatric staffing to support them.

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This week, Berries shared two resources for your practice and wellbeing.

Podcast: Lorain Moorehead joins Kym Tolson to talk about preventing therapist burnout before it starts - with a practical, structural lens on what sustains a long career in clinical work, not just what helps in a difficult week.

→ Listen to our podcast

Meditation: Julie Ela Grace recorded a 13-minute guided meditation on releasing what you heard today - for after the sessions that stay with you, when you need to put down what you carried in.

→ Try our meditation

What this week's news mostly confirms is that the people doing the actual relational work remain the hardest part of mental health care to automate, regulate, or replace.

As always, thank you for your truly important work.

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This newsletter is intended for informational and educational purposes only. It does not constitute clinical, legal, or regulatory guidance. Clinicians should rely on their professional judgment and applicable standards of care when integrating any technology into practice.