Block grants for community mental health services

The Substance Abuse and Mental Health Services Administration awarded the Arizona Health Care Cost Containment System $54.073 million on October 1, 2025, under the Block Grants for Community Mental Health Services program (CFDA 93.958) to deliver community-based mental health services to adults with serious mental illness and children with serious emotional disturbance through September 30, 2027.

AHCCCS, Arizona's state Medicaid agency, administers the award from Phoenix, Arizona. Funds support outreach, treatment, and evidence-based programs targeting serious mental illness, serious emotional disturbance, and first-episode psychosis across the state. Up to 5 percent of grant funds may be used for administration. Services are provided through community mental health centers, psychosocial rehabilitation programs, mental health peer-support programs, and consumer-directed programs that meet prescribed criteria. States must set aside 10 percent of their allocation for evidence-based programs targeting early serious mental illness including psychotic disorders.

AHCCCS passes funding through sub-recipients including Mercy Care Plan, which received a sub-award designated to outreach and treat uninsured and underinsured individuals determined to have serious mental illness, serious emotional disturbance, or first-episode psychosis. Additional sub-awards issued on June 26, 2026, directed community-based mental health services and first-episode psychosis evidence-based treatment to northern and southern regions of Arizona.