Confusion erupts in mental health and substance abuse programs as HHS cuts, then reinstates grants

Chaos and confusion rippled through mental health and substance abuse treatment organizations nationwide this week after the Trump administration abruptly canceled nearly $2 billion in federal grants, only to reverse course a day later.

Elizabeth Woike, CEO of BestSelf Behavioral Health in Buffalo, New York, experienced the turmoil firsthand. After receiving notification that her organization’s funding had been terminated, she was hit with a contradictory 2 a.m. email Thursday from the Substance Abuse and Mental Health Services Administration (SAMHSA) that reiterated the cuts.

“I just shook my head. It’s mass chaos,” said Woike, whose organization provides critical mental health and substance use disorder treatment services.

Hours later, SAMHSA informed Woike and approximately 2,000 other grant recipients that the termination letter sent overnight was an error, and their federal funding had indeed been restored. The original cancellation notices had been sent Tuesday evening, giving organizations less than 24 hours of extreme uncertainty.

The funding rollercoaster exemplifies what program directors describe as a troubling pattern of unpredictability from the current administration, which has repeatedly canceled millions in federal funding without warning and sometimes reversed course shortly afterward.

For organizations serving vulnerable populations during ongoing mental health and addiction crises, such volatility makes strategic planning nearly impossible.

“No one’s looking at expansion or really trying to ramp up services to meet the need in the community,” Woike explained. “Everyone is just retrenching, looking at putting aside every penny and every resource.”

The damage was immediate. Between Tuesday’s termination notices and Thursday’s restoration, several organizations had already begun making difficult decisions, including laying off staff and canceling scheduled trainings. The financial and operational whiplash left many providers scrambling.

Honesty Liller, CEO of the McShin Foundation in Richmond, Virginia, reported having to work through the logistics of rehiring five employees who had been laid off when the cuts were announced. The peer support organization provides crucial recovery services in a state hit hard by the opioid epidemic.

Sara Howe, CEO of the Addiction Professionals of North Carolina, said the incident has left many treatment providers anxious about the security of their funding, even after the restoration announcement.

“Any time this happens, you wind up in a position where you’re like, is it OK to breathe?” Howe said. “It puts everybody on really unsteady, shaky ground.”

An administration official with knowledge of the decision confirmed the grants were restored but did not explain why they were terminated in the first place. A Department of Health and Human Services spokesperson declined to comment on the confusion or provide reasoning behind the rapid policy reversal.

The episode drew sharp criticism from Democratic lawmakers, who characterized the situation as dangerous and irresponsible. Representative Rosa DeLauro (D-Conn.), Ranking Member of the House Appropriations Committee, described Health Secretary Robert F. Kennedy Jr.’s decision-making as “dangerous and haphazard.”

“He must be cautious when making decisions that will impact Americans’ health,” DeLauro said in a statement. “I hope this reversal serves as a lesson learned.”

Senator Tammy Baldwin (D-Wisconsin) was equally critical, stating that the administration “caused chaos and real harm to Americans — and now, they need to come clean and give families some answers why they caused this mess.”

The incident occurs against the backdrop of ongoing mental health and substance abuse crises across the United States. Federal grants provide essential funding for prevention, treatment, and recovery services at a time when overdose deaths remain at historically high levels and mental health challenges have intensified following the COVID-19 pandemic.

Ryan Hampton, founder of the nonprofit advocacy organization Mobilize Recovery, expressed relief at the funding restoration while condemning the administration’s approach.

“Restoring these grants was the only acceptable outcome, yet the chaos inflicted on frontline providers and families these past 24 hours is unforgivable,” he said. “We cannot normalize a political environment where overdose prevention and recovery are treated as leverage.”

For organizations like BestSelf Behavioral Health, the uncertainty reinforces a defensive posture rather than an expansive one, potentially limiting access to critical services despite growing community needs. The incident highlights the vulnerability of essential social services to sudden policy shifts and administrative chaos.