DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland 21244-1850 
 
Center for Medicaid and State Operations 
 
                    SMDL #07-011 
            August 15, 2007 
 
Dear State Medicaid Director: 
 
The purpose of this letter is to provide guidance to States interested in peer support services 
under the Medicaid program.  The Centers for Medicare & Medicaid Services (CMS) recognizes 
that the mental health field has seen a big shift in the paradigm of care over the last few years.  
Now, more than ever, there is great emphasis on recovery from even the most serious mental 
illnesses when persons have access in their communities to treatment and supports that are 
tailored to their needs.  Recovery refers to the process in which people are able to live, work, 
learn and participate fully in their communities.  For some individuals, recovery is the ability to 
live a fulfilling and productive life despite a disability.  For others, recovery implies the 
reduction or complete remission of symptoms.   
 
Background on Policy Issue 
States are increasingly interested in covering peer support providers as a distinct provider type 
for the delivery of counseling and other support services to Medicaid eligible adults with mental 
illnesses and/or substance use disorders.  Peer support services are an evidence-based mental 
health model of care which consists of a qualified peer support provider who assists individuals 
with their recovery from mental illness and substance use disorders.  CMS recognizes that the 
experiences of peer support providers, as consumers of mental health and substance use services, 
can be an important component in a States delivery of effective treatment.  CMS is reaffirming 
its commitment to State flexibility, increased innovation, consumer choice, self-direction, 
recovery, and consumer protection through approval of these services.  The following policy 
guidance includes requirements for supervision, care-coordination, and minimum training 
criteria for peer support providers.   
 
As States develop behavioral health models of care under the Medicaid program, they have the 
option to offer peer support services as a component of a comprehensive mental health and 
substance use service delivery system.  When electing to provide peer support services for 
Medicaid beneficiaries, State Medicaid agencies may choose to collaborate with State Mental 
Health Departments.  We encourage States to consider comprehensive programs but note that 
regardless of how a State models its mental health and substance use disorder service delivery 
system, the State Medicaid agency continues to have the authority to determine the service 
delivery system, medical necessity criteria, and to define the amount, duration, and scope of the 
service.     
 
 
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States may choose to deliver peer support services through several Medicaid funding authorities 
in the Social Security Act.  The following current authorities have been used by States to date:  
  Section 1905(a)(13)  
  1915(b) Waiver Authority  
  1915(c) Waiver Authority 
 
Delivery of Peer Support Services
Consistent with all services billed under the Medicaid program, States utilizing peer support 
services must comply with all Federal Medicaid regulations and policy.  In order to be 
considered for Federal reimbursement, States must identify the Medicaid authority to be used for 
coverage and payment, describe the service, the provider of the service, and their qualifications 
in full detail.  States must describe utilization review and reimbursement methodologies.  
Medicaid reimburses for peer support services delivered directly to Medicaid beneficiaries with 
mental health and/or substance use disorders.  Additionally, reimbursement must be based on an 
identified unit of service and be provided by one peer support provider, based on an approved 
plan of care.  States must provide an assurance that there are mechanisms in place to prevent 
over-billing for services, such as prior authorization and other utilization management methods.     
 
Peer support providers should be self-identified consumers who are in recovery from mental 
illness and/or substance use disorders.  Supervision and care coordination are core components 
of peer support services.  Additionally, peer support providers must be sufficiently trained to 
deliver services.  The following are the minimum requirements that should be addressed for 
supervision, care coordination and training when electing to provide peer support services.    
 
1)  Supervision 
Supervision must be provided by a competent mental health professional (as defined by the 
State).  The amount, duration and scope of supervision will vary depending on State Practice 
Acts, the demonstrated competency and experience of the peer support provider, as well as the 
service mix, and may range from direct oversight to periodic care consultation.     
 
2)  Care-Coordination  
As with many Medicaid funded services, peer support services must be coordinated within the 
context of a comprehensive, individualized plan of care that includes specific individualized 
goals.  States should use a person-centered planning process to help promote participant 
ownership of the plan of care.  Such methods actively engage and empower the participant, and 
individuals selected by the participant, in leading and directing the design of the service plan 
and, thereby, ensure that the plan reflects the needs and preferences of the participant in 
achieving the specific, individualized goals that have measurable results and are specified in the 
service plan.     
 
 
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3)  Training and Credentialing  
Peer support providers must complete training and certification as defined by the State.  Training 
must provide peer support providers with a basic set of competencies necessary to perform the 
peer support function.  The peer must demonstrate the ability to support the recovery of others 
from mental illness and/or substance use disorders.  Similar to other provider types, ongoing 
continuing educational requirements for peer support providers must be in place.   
 
Please feel free to contact Gale Arden, Director, Disabled and Elderly Health Programs Group, at 
410-786-6810, if you have any questions. 
 
Sincerely, 
 
            /s/ 
 
Dennis G. Smith 
Director 
 
cc: 
 
CMS Regional Administrators 
 
CMS Associate Regional Administrators  
     Division of Medicaid and Childrens Health 
 
Martha Roherty 
Director, Health Policy Unit 
American Public Human Services Association 
 
Joy Wilson 
Director, Health Committee 
National Conference of State Legislatures 
 
Matt Salo 
Director of Health Legislation 
National Governors Association 
 
Jacalyn Bryan Carden  
Director of Policy and Programs  
Association of State and Territorial Health Officials 
 
Christie Raniszewski Herrera 
Director, Health and Human Services Task Force  
American Legislative Exchange Council 
 
Debra Miller 
Director for Health Policy 
Council of State Governments