Q&A with Michael Cotton: Medicaid, Commercial Insurance & PAT Coverage
We dropped in with Michael Cotton to explore the inner workings of Medicaid and examine how PMHA’s strategy could influence not only public coverage but also the broader commercial and private insurance markets.
Michael Cotton, founding advisory board member of PMHA Alliance alongside Jeffrey Walker and Austin Hearst, is a seasoned managed care executive. With deep expertise in Medicaid and commercial insurance, he brings invaluable perspective on how payer systems work—and why beginning with Medicaid is central to expanding access to psychedelic-assisted therapy.
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Michael Cotton:
Medicaid covers mental health treatments for some of the most vulnerable people in our country—like single mothers, low-income working-class adults, and disabled adults. These are people carrying the heaviest burdens of trauma and mental health challenges, yet they also face the steepest barriers to care. And the truth is, there just aren’t enough providers willing to accept Medicaid. Reimbursement rates are low, and folks who need it most are often juggling housing instability, transportation, or food insecurity. If we don’t design models that work for them, they’re going to be left behind.
The other piece is evidence. Medicaid populations are usually left out of clinical research, so states don’t have much data on what actually works for them. That’s a huge gap. If PMHA can show that psychedelic-assisted therapy is effective and safe in these more complex populations—and do it in a way that also shows cost savings—it’s a game-changer. That kind of data is what states need to see before they’ll cover something new. And once you’ve proven it in Medicaid, you’ve basically set the foundation for adoption across the entire payor system.
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Michael Cotton:
All payers—Medicaid, Medicare, and commercial insurers—use the same playbook when deciding what to cover: medical necessity, standard protocols, licensing, diagnosis. And then of course evaluating cost versus outcomes. That means what we prove in Medicaid doesn’t stay in Medicaid. If PMHA can show outcomes and cost savings in populations that face the toughest barriers—unstable housing, food insecurity, transportation challenges—that evidence is even stronger when commercial insurers look at it.
In other words, if psychedelic-assisted therapy can succeed with Medicaid populations, it’s almost certain to succeed in commercially insured populations too. That makes it far easier for other payors to follow. Medicaid is the proving ground.
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Michael Cotton:
That’s a really important dynamic. A lot of big insurers cover all products across Medicaid, Medicare and commercial insurance. We don’t have to get into it now but they often cover pharmacy products as well as other specialty services. Centene is a good example. They began as a Medicaid-only company and now covers over 30 states for Medicaid and Medicare and has products in all 50.
So what does that mean for us? If a company like Centene sees value in covering psychedelic-assisted therapy in a big Medicaid market—say, Texas—that decision doesn’t just sit in one line of business. It opens the door for their commercial and Medicare products to follow. One win in a state Medicaid program can ripple across the entire organization. That’s why Medicaid coverage is so strategic—it doesn’t stay siloed.
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Michael Cotton:
Publishing research is important, but it’s only one piece of the puzzle. To move the needle, PMHA has to work with the organizations that influence payer decisions. It’s excellent that PMHA is already partnering with the Center for Health Care Strategies (CHCS). They’re a nonprofit that helps states improve Medicaid programs and health outcomes for low-income populations. That’s exactly the kind of group that can amplify this work. Another important organization is AHIP—America’s Health Insurance Plans—the trade group that brings together medical directors and sets priorities for health plans nationwide.
We also can’t ignore PBMs—pharmacy benefit managers. They control formularies and negotiate drug pricing, which gives them enormous power over whether and how new treatments get covered. Building relationships there is critical if we want psychedelic therapies to move from pilot programs into standard practice. Specialty service companies are another key player. Groups like Enthea and Beckley Clinical act as third-party administrators with infrastructure, marketing, and insurer relationships already in place. By working with all of these partners, PMHA can make sure the evidence we generate doesn’t just live in journals but actually reaches decision-makers and gets turned into coverage.
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Michael Cotton:
Even experienced mental health therapists and practitioners often don’t know how to work with Medicaid. They may be strong clinicians, but they don’t understand how to become a Medicaid provider or how to handle billing, prior authorizations, and medical necessity documentation. That’s already one reason Medicaid provider coverage is thin. Now bring in a breakthrough therapy like psychedelic-assisted treatment, and the barriers get even steeper.
Most people entering this field haven’t dealt with Medicaid before. They might know how to deliver therapy, but not how to function inside that system. And if they can’t navigate the process, they won’t really be able to participate.
That’s why psychedelic-assisted therapy workforce training—whether it’s higher ed, on-the-job learning, or PAT-specific programs—has to cover more than the therapeutic side. It has to prepare providers to function inside Medicaid and payer systems: how managed care organizations operate, what protocols they’ll face, how to link services to coverage in a way that actually gets reimbursed. Because if we don’t prepare the workforce for that, then even if Medicaid says yes, the care won’t reach the people it’s designed to.
Learn More About Michael Cotton
Michael Cotton is an experienced managed care executive with over 20 years of leadership in Medicaid and Medicare. During his tenure as Chief Operating Officer and in other senior roles at Meridian Health, a multi-state managed care provider, he focused on efficiency and population health strategies that emphasized better patient outcomes—helping Meridian achieve some of the highest quality ratings in the country while serving more than a million Medicaid beneficiaries. Cotton was also instrumental in expanding Meridian’s award-winning services to tens of thousands of Medicare participants.
He currently leverages this expertise across entrepreneurial endeavors and as a trusted advisor to Enthea. Cotton also serves as a board member of the Psychedelic Science Funders Collaborative (PSFC), a community of philanthropists funding the research, policy, and field-building needed to advance safe, equitable, and effective access to psychedelic therapies.