Best States to Open a Behavioral Health Practice in 2026, Ranked by Medicaid Rate

The best states to open a behavioral health practice, judged by what Medicaid pays for mental health counseling, are South Dakota, Wyoming and the District of Columbia. South Dakota ranks 1st of the 11 states compared at $42.50, 62.3% above the national median of $26.19. Wyoming ranks 2nd at $42.34 and the District of Columbia 3rd at $35.74.

The counseling ranking splits cleanly into two groups: four states well above the median, and seven at or below it. This guide ranks states on the counseling rate, explains whether each state's managed-care plans must honor the published figure, and points to the other behavioral health services worth comparing. Reimbursement is one input to a location decision; licensing, clinician staffing, payer mix and competition need local research.

The table ranks the ten states that pay the most for mental health counseling. We do not show a wage-based margin for counseling; the last column shows each rate against the national median instead.

Four states pay well above the median; after them, rates fall to within a few dollars of it, and from Rhode Island down they are below it.

South Dakota Medicaid pays $42.50 for mental health counseling, ranking 1st of the 11 states compared and 62.3% above the national median.

South Dakota and Wyoming are almost level, and both sit far above the District of Columbia in 3rd place. For a practice whose Medicaid revenue would come mainly from counseling, South Dakota offers the highest rate in the ranking.

We have no managed-care rule on file for counseling in South Dakota, so ask the state how claims are paid before budgeting on the published rate. Then research the questions the rate cannot answer: whether you can recruit licensed clinicians, how far clients would travel, whether telehealth fits your model, and how many practices already serve your area. A high rate only becomes revenue if clinicians can fill their schedules.

Compare psychotherapy, assessment and skills training rates on the state page too, since most practices bill more than counseling.

See every rate on the South Dakota behavioral health Medicaid rates page.

Wyoming pays $42.34 for mental health counseling, ranking 2nd of the 11 states compared and 61.7% above the national median, only cents behind South Dakota.

On the counseling rate, the two states are interchangeable. What separates them for an operator is local: where your clients would be, how far clinicians would travel for in-person care, and the size of the licensed clinician workforce you could hire from.

We have no managed-care rule on file for counseling in Wyoming. Ask the state how claims are paid, then research clinician recruitment and the existing provider landscape. With a rate this high, the open question is volume: how many Medicaid clients in your area need counseling and are not already served. Telehealth can widen the area a practice serves, so consider whether it fits your model and how it is billed in the state.

See the Wyoming behavioral health rates page.

The District of Columbia pays $35.74 for mental health counseling, ranking 3rd of the 11 states compared and 36.5% above the national median.

The District's advantage is how it pays. Counseling is paid directly by the District, outside managed care, so the published rate is the rate you collect. None of the other top four states offers that combination of a well-above-median rate and no plan contracts to negotiate.

That predictability helps a new practice forecast revenue before it has any negotiating leverage. The rate is lower than South Dakota's or Wyoming's, but the certainty may be worth more than the difference. Research local licensing for clinicians and organizations, rent, and how many providers already serve the neighborhoods you would target.

Details are on the District of Columbia behavioral health rates page.

Washington pays $34.22 for mental health counseling, ranking 4th of the 11 states compared and 30.7% above the national median.

Washington completes the group of four states well above the median. Its rate is close to the District's, but its payment route is different.

In Washington, plans negotiate their own behavioral health rates, and the published rate applies out of network. If most of your Medicaid clients are enrolled in plans, your contracts decide what you are paid, and the published rate becomes the anchor in negotiation. Ask plans in your area what they pay before you budget on the fee schedule. A practice with strong outcomes data or a specialty plans need will be in a better position to negotiate.

Read more on Washington behavioral health Medicaid rates.

Wisconsin pays $27.43 for mental health counseling, ranking 5th of the 11 states compared and 4.7% above the national median.

Wisconsin is a different case from the top four. Its counseling rate is only slightly above the median, so it is not a rate-driven choice on counseling alone. A practice whose mix leans on psychotherapy, assessment or skills training should compare those rates on the state page before deciding.

Wisconsin's plans negotiate their own rates, and the published rate applies out of network, so your contracts with plans matter. Model the mix of services you plan to offer rather than relying on one rate, and research clinician availability and local competition.

See the Wisconsin behavioral health rates.

New Hampshire pays $27.38 for mental health counseling, ranking 6th of the 11 states compared and 4.5% above the national median, almost level with Wisconsin.

New Hampshire's plans negotiate their own rates, and the published rate applies out of network. With a rate this close to the median, New Hampshire would make a shortlist because of local factors, such as clinician availability, unmet need in a particular area, or a strong commercial payer mix, rather than its Medicaid rate.

If New Hampshire is on your list for other reasons, the published rate gives you a reasonable baseline for plan negotiations. Check the state page for psychotherapy and assessment rates as well.

See the New Hampshire behavioral health rates page.

North Carolina pays the least of the states compared: $18.49 for mental health counseling, ranking 11th of the 11 and 29.4% below the national median. Connecticut pays $21.14 and Ohio $21.21, 19.3% and 19.0% below it. Massachusetts pays $22.95, 12.4% below, and Rhode Island $25.00, 4.5% below.

A low counseling rate does not rule a state out. In Massachusetts and North Carolina, plans must pay at least the published rate, which gives some certainty even where the rate is low, and in Ohio plans are expected to. Connecticut has no managed-care rule on file for counseling.

In these states, a practice would lean more on commercial insurance, self-pay clients or services that pay better than counseling.

States are ordered by their Medicaid rate for mental health counseling, ranked among the 11 states compared. The comparison uses each state's published counseling rate.

We do not calculate a wage-based margin for behavioral health in this guide. The last column of the table, the gap to the national median, is the cleanest like-for-like comparison.

Every rate is compiled from official state Medicaid publications, and each one on the site links to its source document. See the methodology for how services and units are matched.

A high counseling rate tells you what Medicaid pays for each billed service. It does not tell you:

• how many billable sessions a clinician can deliver in a week, after no-shows and documentation;
• what licensed clinicians cost and whether you can recruit them;
• the share of your clients who will be on Medicaid, commercial insurance or self-pay;
• how many practices and agencies already serve your target area.

It also says nothing about licensing for clinicians and for behavioral health organizations, which varies by state. Research those first. Then use the rate ranking to compare the states that remain.

A practical test for each shortlisted state: work out how many billable sessions a full-time clinician will actually deliver in a week, multiply by the published rate for each service you plan to offer, and compare the result with what you would have to pay that clinician locally. If the numbers only work with a full schedule and no cancellations, the state is a stretch on Medicaid revenue alone.

Behavioral health shows the full range of managed-care rules:

• Plans must pay at least the published rate (Massachusetts, North Carolina): a floor in plan contracts.
• Plans are expected to pay at least the published rate (Ohio): a softer floor; ask plans how it works in practice.
• Plans negotiate; the published rate applies out of network (Washington, Wisconsin, New Hampshire, Rhode Island): your contracts decide your rate.
• Paid directly by the state, outside managed care (District of Columbia): you collect the published rate.

South Dakota, Wyoming and Connecticut have no rule on file for counseling. Ask the state how claims are paid before you budget. In states where plans negotiate, ask each plan in your area for its behavioral health fee schedule early, since those contracts will set most of your Medicaid revenue.

Counseling is one of several services a behavioral health practice bills. National medians:

• Outpatient psychotherapy and diagnostic evaluation: $83.33.
• Mental health assessment (non-physician): $125.00.
• Skills training and development: $51.20 an hour.

Before choosing a state, list the services you plan to bill and compare each one on the state pages. The best state for counseling is not always the best for psychotherapy or skills training.

Start with the behavioral health Medicaid rates by state hub to compare every service. Then open the state pages on your shortlist, such as South Dakota, Wyoming, District of Columbia and Washington, for each rate with its source.

For full access while you build a budget, see pricing. The methodology page explains how rates are compared.