Illinois HB 1085 (Public Act 104-0446), signed by Governor Pritzker in December 2025, is one of the most significant behavioral health insurance reforms in the state’s history. Starting with plan renewals on or after January 1, 2027, state-regulated commercial insurers must reimburse mental health and substance use disorder services at rates comparable to equivalent medical and surgical services.
If you own a psychotherapy practice in Illinois, you’ve likely heard some version of this already:
“Reimbursement is going up! This is good news for therapists.”
And it is good news. Meaningful behavioral health insurance reform has been a long time coming.
The law introduces important reimbursement increases and administrative improvements for many psychotherapy services: it establishes a mandatory reimbursement floor tied to Medicare rates, expands coverage requirements that have historically created billing and credentialing friction, and introduces new administrative timelines that insurers must meet. At the same time, it may create a period of internal recalibration within practices as owners and clinicians consider how those changes translate into compensation, stability, and long-term sustainability.
For years, many practice owners absorbed financial strain in ways that were not always sustainable. Some reduced their own income. Some delayed investments in infrastructure. Some adjusted therapist compensation models upward in response to evolving expectations within the field. Recruitment pressures, rising costs of living, and long-standing dissatisfaction with reimbursement rates all played a role.
Therapists felt that strain too: through productivity pressure, uneven benefits, and the emotional weight of working in a field that has often felt institutionally undervalued.
HB 1085 addresses part of that systemic imbalance.
But improved reimbursement alone does not automatically restore structural stability inside practices. The internal systems that developed under years of underpayment may still require thoughtful attention.
How Illinois HB1085 Changes Behavioral Health Reimbursement Rates
In late 2025, the Illinois General Assembly passed and the governor signed into law HB 1085, a behavioral health insurance reform bill. The intent of the law is to improve access to mental health and substance use disorder care by addressing long-standing issues in reimbursement and administrative obstacles within commercial insurance plans regulated by the state.
At its core, HB 1085 does two major things: it raises the floor for what commercial plans must pay for behavioral health services, and it expands coverage requirements in ways that remove key barriers for providers and patients. The law’s provisions begin to take effect in 2026–2027, with most commercial plan changes tied to plan renewals on or after January 1, 2027. Some carriers may adjust reimbursement earlier as they update their fee schedules.
Mandatory Reimbursement Floor
First, the law establishes a mandatory reimbursement floor. Rather than allowing commercial insurers to negotiate behavioral health reimbursement at historically low levels, HB 1085 requires that in-network rates for mental health and substance use disorder services be no less than a set percentage above Medicare rates. The initial floor is linked to approximately 141.7 % of the relevant Medicare fee schedule, and once established, the floor cannot be reduced if Medicare rates decline. The Illinois Department of Insurance is required to publish the effective floor rates prior to implementation, giving practices and insurers advance notice.
This change is significant. Behavioral health reimbursement has historically lagged behind physical health services, driving many clinicians out of network and limiting access. For practices, raising the rate floor means that common codes, including intakes (90791), individual psychotherapy (90837), family therapy with the client present (90847), and group therapy (90853) should be reimbursed at higher amounts than many carriers have historically allowed.
| CPT Code | 2026 Medicare Reimbursement* | Current Rate x 141.7% |
|---|---|---|
| 90791 | $173.35 | $245.64** |
| 90837 | $167.00 | $236.64** |
| 90847 | $109.55 | $155.23** |
| 90853 | $30.39 | $43.06** |
*This chart uses the 2026 Medicare reimbursement rates for some common mental health CPT codes in Chicago and Cook County to calculate the possible new floor for commercial insurance reimbursement rates in 2027. Reimbursement rates vary by locality.
** Possible new floor for commercial reimbursement required by IL HB1085. See also: Physician Fee Schedule
Expanded Coverage for Same Day Behavioral Health Services
Second, HB 1085 expands coverage in other important ways. Under the law, insurers must cover all medically necessary behavioral health services provided to the same patient on the same day, even if delivered by multiple providers or settings. This removes a barrier that has often forced providers into billing bottlenecks or coverage denials for coordinated care.
Therapists Billing Under A Supervisor
The law also clarifies coverage for services delivered by supervised trainees working toward clinical licensure, so long as those services are billed under the supervising clinician’s provider number. This helps reduce credentialing hurdles and expands access to supervised care, which is important for practices that rely on trainees and post-docs as part of their workforce strategy.
Credentialing and Contracting Timelines & Retroactive Reimbursement
HB 1085 further requires insurers to complete credentialing and contracting within defined timelines (60 days for a completed application) and to provide retroactive in-network reimbursement to the date a provider’s application was completed once a contract is finalized. In practice, this reduces the administrative lag that often leaves clinicians unpaid for weeks or months while waiting for in-network status to be confirmed.
Coverage Protections for 60-minute Therapy Sessions
The law also strengthens coverage protections for 60-minute psychotherapy sessions, requiring that plans cover CPT 90837 without imposing more burdensome documentation or therapy audit requirements than other psychotherapy codes.
The 20-Day Rule for “Stopped Acceptance”
As a provider, you must notify an insurance issuer within 20 business days if you decide to stop accepting new patients for that plan, provided the limitation is expected to last 40 business days or longer. Practices may need to create a formal process to trigger these notifications as soon as a clinician’s caseload reaches capacity.
Expanded Enforcement, Reporting, and Oversight
Finally, the legislation expands enforcement, reporting, and oversight responsibilities for the Illinois Department of Insurance. The department must monitor network adequacy, access, parity compliance, and reimbursement behaviors, making this an enforceable set of reforms rather than aspirational guidance.
The law applies only to state-regulated commercial plans, typically fully insured employer and individual marketplace plans governed by Illinois law. It does not apply to self-funded (ERISA) employer plans, Medicare, Medicaid, or other federally governed programs, for example the Chicago Public Schools plan. (Find out what plans are subject to HB 1085, “Is This Insurance Plan Covered?“ is a free guide offered at the end of this article.)
This means the financial impact will vary depending on your practice’s payer mix1 Not every client will be in a covered plan. Not every session will increase.
Taken together, HB 1085 represents one of the most consequential behavioral health reimbursement reforms in Illinois history. For owners, this is cause for strategic preparation. It introduces higher potential revenue for the work your clinicians do, but only when matched with thoughtful business design.
HB 1085 FAQ for Therapy Practices
It depends on your current contracted rates and your payer mix. The law sets a floor at approximately 141.7% of the Medicare fee schedule. Using 2026 Medicare rates, that translates to roughly $245 for a 90791 intake, $236 for a 90837 session, $155 for 90847 family therapy, and $43 for 90853 group therapy. If your current contracted rates are already near or above those floors, the increase may be modest. If they’re significantly below, the change could be more meaningful.
The floor applies broadly. Rather than limiting increases to a specific list of codes, HB 1085 establishes a reimbursement floor for every CPT and HCPCS code used for mental health and substance use disorder services covered by state-regulated commercial plans. That includes standard outpatient psychotherapy codes, psychiatric evaluations, and institutional codes for inpatient and residential care. If a service is a covered behavioral health service under a commercial plan, the rate floor is intended to apply.
One distinction worth noting: CPT 90837 is called out separately in the law, not because it’s excluded from the rate floor, but because it carries an additional protection. Insurers cannot impose more burdensome documentation or more frequent audits for 60-minute sessions than for other psychotherapy codes. That’s a separate rule from the rate floor itself. The Illinois Department of Insurance will publish specific floor rates by code in a Company Bulletin before January 1, 2027.
Both, potentially. On profitability, if your current 90837 rate is below the new floor, you’ll see an increase. On administrative ease, the law prohibits insurers from imposing more burdensome documentation or audit requirements for 90837 than for other psychotherapy codes, which should reduce the extra scrutiny 60-minute sessions have historically attracted.
They cannot impose requirements that are more burdensome for 90837 than for other psychotherapy codes. That’s a direct requirement of the law. However, standard clinical documentation requirements still apply. The law addresses disproportionate audit and documentation demands, not documentation generally.
HB 1085’s reimbursement changes do not take effect for every existing contract on a single universal date. The better way to say it is that the new rules generally apply to health plans that are issued, delivered, or renewed on or after January 1, 2027, so the timing depends on each payer’s renewal cycle. That means a practice may see the new reimbursement terms apply at different times across different carriers. For example, one insurer’s plan might renew in January 2027, while another’s does not renew until March or later, so the new rate floor would show up on different schedules.
Yes. Under HB 1085, insurers must complete credentialing within 60 days of receiving a completed application. Once the contract is finalized, reimbursement must be retroactive to the date the completed application was received. This reduces the unpaid waiting period that has been a persistent problem for practices adding new clinicians.
Yes. The law now requires state-regulated commercial plans to cover services provided by behavioral health trainees working toward clinical licensure, provided those services are billed under the supervising clinician’s NPI. Previously, coverage for trainee services varied by plan and was often denied. This creates a more reliable billing pathway for practices that use interns, post-docs, or associates.
Yes, and that is the required billing method under the law. The supervising clinician’s provider number must be used. Practices should verify their billing setup reflects this and confirm their biller and EHR are configured correctly. It’s also worth confirming with each payer that your specific plan is state-regulated rather than ERISA-governed, since the law doesn’t apply to self-funded employer plans.
Why Reimbursement Reform Doesn’t Automatically Fix Practice Finances
When reimbursement increases take effect, new revenue will flow through the existing compensation model in any given practice.
In practices with percentage-based compensation structures, reimbursement increases will naturally flow through to clinicians in meaningful ways. For many therapists, that increase will feel long overdue.
At the same time, if the overall financial structure of the practice is already tight (i.e. where therapists’ compensation rates are 55-60% or greater), the additional revenue may not significantly change the stability of the business itself. In those cases, owners may still find themselves carrying disproportionate risk, even in a higher reimbursement environment.
This is not a question of fairness. It is a question of durability.
Without margin, defined simply as the revenue remaining after clinician compensation, benefits, and operating expenses, a practice cannot build reserves, invest in infrastructure, strengthen benefits, retain administrative support, or stabilize leadership over time.
Reimbursement reform improves the external environment. But the underlying structure of your business, including your compensation model, determines whether that improvement creates lasting stability within your practice.
When Compensation Structures Drift Under Pressure
Over the past decade, many practice owners have adjusted compensation models in response to intense market pressure. Recruitment challenges, rising living costs, and long-standing dissatisfaction with reimbursement rates contributed to upward movement in pay structures — especially percentage-based compensation models.
Among some practice owners and therapists, splits of 55-60% or higher became normalized. Not necessarily as part of a long-term strategic plan, but as an adaptive response to a strained environment.
It is understandable how that happened.
When the system underpays the field for decades, internal adjustments become the release valve.
HB 1085 changes the external environment. That shift creates a window for thoughtful recalibration: to ask whether your current model reflects intentional design or accumulated reaction.
Revisiting a model born out of pressure is necessary. It is reflective. And when done transparently, it can strengthen the entire practice ecosystem.
Solidarity and Structure Are Not Opposites
It is tempting to frame this moment as owners versus therapists.
That would be a mistake.
Insurance institutions have historically underfunded the mental health field. That external pressure shaped and contributed to internal tension within psychotherapy practices.
Reimbursement reform, like HB 1085, is meant to relieve that pressure.
Therapists and owners came together with legislators and others to move the insurance industry towards a fairer and more up-to-date reimbursement schedule. But the solidarity exemplified in this effort does not necessarily create meaningful or sustainable private practice structure.
Continued collaboration and alignment, beyond the legislative effort, depends on transparency about how the business functions, what revenue supports, what sustainability requires, and how compensation fits into the whole.
The goal of re-considering compensation structure is to ensure that increased reimbursement strengthens the practice as a whole, including clinician pay, benefits, infrastructure, administrative staffing, leadership stability, and long-term practice viability.
Solidarity and structure perform best when they are mutually reinforcing. (For more, read my 3-part series on practice stewardship.)
Why This Re-consideration Should Happen Now
Reimbursement increases tied to HB 1085 will not land uniformly across all insurance plans in your practice. Payer mix matters. Compensation models matter. Timing matters. These are practice specific. There are no one-size fits-all solutions.
If you’re unsure how much of your practice will actually be affected by HB1085, I’ve created a simple modeling tool you can use to estimate the impact based on your payer mix.
Free download: Is This Insurance Plan Covered by HB 1085?
Subscribe to my mailing list and get a complimentary guide you can refer to help estimate the impact of HB 1085 based on your payer mix.
Practices that use the time between now and January 1, 2027, to review, analyze and clarify their compensation model and operational design are more likely to experience genuine stabilization.
Practices that allow increases to flow automatically through fragile structures may find that little changes. Adding revenue can mask internal instability or subtly mitigate those risks to other aspects of the practice.
This is a moment for thoughtful recalibration.
A Moment Worth Handling Thoughtfully
HB 1085 represents meaningful progress for a field that has been structurally and economically strained for decades.
That strain has impacted clinicians, practice owners, and clients alike.
Reimbursement reform begins to address the external imbalance.
Sustainable change inside practices requires something more: clarity about structure, transparency about compensation limits, and a shared commitment to building durable organizations.
Handled with care, this reform can become more than a rate increase. It can become a stabilizing force for practices across Illinois.
References and notes below.
- Payer mix is the percentage of fees collected from commercial plans, self-insured plans and clients who pay out of pocket for services without using insurance. ↩︎
The guidance above is based on a combination of Illinois regulatory requirements and insurer-specific documentation. Key sources include:
- Illinois Uniform Health Care Benefit Information Card Act (215 ILCS 139/)
- Guidance from the Illinois Department of Insurance regarding plan regulation
- Blue Cross Blue Shield of Illinois provider documentation on network and plan structures
- UnitedHealthcare provider and administrative services (UMR, Shared Services) materials
- Cigna and Aetna plan documentation regarding Administrative Services Only (ASO) arrangements
- Industry guidance on identifying self-funded vs. fully insured plans
Additional references:
Leave a Reply