On Tuesday, thousands of health agencies and organizations across the country got word that federal grants for some mental health and addiction programs were being cut, according to media reports and statements from grant awardees.
A day later, the Department of Health and Human Services (HHS) reversed its decision and reinstated nearly $2 billion in grant funding. An administration official confirmed to Fierce Healthcare on Thursday that the funding was being restored.
The Substance Abuse and Mental Health Services Administration (SAMHSA), which sits under HHS, sent form letters Tuesday to more than 2,000 addiction and mental health programs informing them of the grant terminations, which totaled nearly $2 billion, The New York Times and NPR reported.
Nonprofit behavioral health organization Centerstone released a statement Tuesday saying it received word of changes to federal grant programs that would result in the loss of $14.3 million in funding from now through the end of 2026. The funding cuts would impact 28 programs across seven of the states it operates in.
“In the Centerstone system, about 3,000 individuals received more than 30,000 instances of treatment and/or care as a result of the impacted grants in 2025. The long-term effects of these terminations are projected to last for years.,” Centerstone said in its statement. “Loss of these funds will reduce access to mental health care and substance use disorder services for millions of American families, services that have been proven to reduce stigma around mental health care, save lives and strengthen our nation’s communities.”
The New York Times reported that the form letter said the funding terminations would be effective immediately, explaining only that the services no longer aligned with the agency’s priorities. The letter described those priorities as supporting “innovative programs and interventions that address the rising rates of mental illness and substance abuse conditions, overdose, and suicide,” NYT reported.
There was immediate backlash from local officials and care providers to the sudden defunding decision.
The American Medical Association said it was “deeply concerned about the termination of federal grant funding for programs that support substance use disorder and mental health care.”
“At a time when patients already face too many barriers to care, sudden funding disruptions risk leaving them without the support and treatment they urgently need,” AMA said in its statement.
The National Alliance on Mental Illness said advocates sent 16,000 messages to Congress and made hundreds of phone calls to voice support for reinstating the funding.
According to media reports, Republican and Democratic lawmakers in Washington quickly urged the Trump administration and HHS to restore the funding.
“After national outrage, Secretary Kennedy has bowed to public pressure and reinstated $2 billion in SAMHSA grants that save lives,” House Appropriations Ranking Member Rosa DeLauro said in a statement. “These are cuts he should not have issued in the first place. He must be cautious when making decisions that will impact Americans’ health. Our policy must be thoughtful – not haphazard and chaotic. This episode has only created uncertainty and confusion for families and healthcare providers.”
NAMI applauded the swift reversal of the grant funding cuts. “Americans affected by mental illness are the clear winners today, and we can be proud of the bipartisan effort that changed this decision,” said Daniel H. Gillison Jr, CEO of NAMI. “This isn’t a political issue because mental health conditions don’t care what political party your family supports. Every family has been impacted by the mental health, addiction, and suicide crisis in this country. We can be proud that we fought to save mental health resources for all Americans.”
Centerstone said it received official word from SAMHSA on Thursday that the agency was restoring approximately $14.3 million in funding to its programs.
“We’re excited to learn that these programs will be able to continue and we will continue our work to provide care, to reduce the stigma surrounding mental health treatment, to help families and to strengthen the communities we serve,” Centerstone CEO David C. Guth, Jr., said in a statement. “We appreciate everyone in the mental health space who spoke up and advocated on our behalf.”
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