By Kathryn Cohen, ABHW Senior Director of Regulatory Affairs
Behavioral health information, particularly substance use disorder (SUD) treatment data, is among the most sensitive information in health care. Extra confidentiality protections have been established for this data to ensure patients feel safe seeking treatment without fear of stigma, discrimination, or misuse of their records. At the same time, appropriate information-sharing is essential to delivering coordinated, integrated, high-quality care.
ABHW leads the Partnership to Amend 42 CFR Part 2 (the Partnership), a coalition of nearly 50 organizations dedicated to aligning Part 2 regulations with modern standards while preserving their core privacy protections. Through this collaboration, ABHW has helped advance policies that streamline the Part 2 framework and bring it into closer alignment with HIPAA, reducing barriers to coordinated care. By supporting clearer consent pathways and minimizing unnecessary data segmentation that fragments the medical record, these updates help ensure that clinicians have appropriate access to the information they need to deliver safe, high-quality, whole-person care. When behavioral health information can be responsibly integrated, rather than walled off, providers are better positioned to coordinate and improve patient outcomes.
In 2024, as a result of advocacy by ABHW and the Partnership, the federal Part 2 regulation was updated to closer align with HIPAA. The updated rule streamlines patient consent for treatment, payment, and health care operations (TPO), strengthens patient rights, and preserves core safeguards, including restrictions on the use of SUD records in legal proceedings.
The full compliance deadline for the 2024 Part 2 final rule was February 16, 2026. By that date, affected providers, treatment programs, and health plans must have updated their policies, consent processes, and Notices of Privacy Practices to reflect the revised requirements.
ABHW wants to make sure that stakeholders are working to implement the new rule requirements. However, significant confusion remains among health care stakeholders regarding implementation of the revised requirements. Behavioral health data must be handled with clarity, in addition to care, so patients receive both the coordination and protection they deserve.
Another layer of complexity is emerging with the OBBBA community engagement SUD exemption
Eligibility for the One Big Beautiful Bill Act’s (OBBBA) medically frail exemption for individuals with SUDs from Medicaid community engagement requirements will likely depend on diagnosis and treatment records protected under Part 2. As states prepare to implement the SUD exemption in 2026, there is still significant confusion about how Part 2 applies in this context. While the 2024 Part 2 final rule permits a single patient consent to be used for treatment, payment, and health care operations (TPO), there are questions about whether that consent is sufficient to support the medically frail exemption decisions. Without clear federal guidance, this uncertainty risks creating administrative delays, inconsistent implementation, and unnecessary barriers for individuals with SUDs who should qualify for the exemptions.
ABHW is actively engaging with the administration to ensure that existing TPO consents can be used for these eligibility determinations. Clarifying this will promote consistency and help ensure that the medically frail exemptions are implemented smoothly without disrupting coverage for Medicaid beneficiaries.
Please see the link to ABHW’s full summary of the 2024 Part 2 final rule for additional details.
