On January 18, 2024, the Centers for Medicare & Medicaid Services (CMS) announced a new innovation model designed to improve quality of care and behavioral and physical health outcomes for Medicaid and Medicare patients with moderate to severe mental health conditions and substance use disorders (SUD). The new model, called the “Innovation in Behavioral Health Model” (IBH Model), is a state-based model that will launch in Spring 2024 and run for eight years. The IBH Model builds on past efforts by CMS to utilize community-based behavioral health practices and the lessons learned will be used for future “advanced alternative payment models and accountable care arrangements.” Though it remains to be seen what states CMS will select to participate in the IBH Model, community-based behavioral health organizations and providers should consider how the IBH Model could serve as a construct for future care delivery models and funding/payment opportunities. 

Model Overview

The IBH Model is designed to support community-based behavioral health providers and organizations in providing integrated care in outpatient settings. Because many patients enrolled in Medicare or Medicaid with moderate to severe behavioral health conditions may already have established relationships with behavioral health providers, this model uses behavioral health providers as the point of entry to identify and provide other necessary care and supports for these patients. Specifically, behavioral health providers will work with an interdisciplinary team of providers to address patient’s needs related to behavioral and physical health as well as health-related social needs like housing, food, and transportation. As a value-based care approach, providers will be compensated based on quality of care and patient outcomes rather than on a fee-for-service model. Participating states and providers will receive funding to develop and implement model activities and capacity building, as well as health technology infrastructure to improve data sharing and quality reporting.

CMS recognizes that behavioral health providers face significant barriers to delivering successful care due to lack of resources and a fragmented health care delivery system that does not systematically integrate physical health care. As such, intended outcomes of the IBH Model include:

• Enhanced quality and delivery of whole person care.
• Increase access to behavioral health, physical health and health related social needs services, such as housing, food, and transportation.
• Improve health and equity outcomes.
• Fewer avoidable emergency department and inpatient visits.
• Strengthen health information technology systems capacity.

Model Participants and Timeline

To participate in this voluntary program, state Medicaid agencies may apply to the program once CMS has released a Notice of Funding Opportunity, scheduled for the Spring of 2024. If chosen, the state Medicaid agency must select community-based behavioral health organizations as participants. These provider participants must meet certain criteria set out by CMS and applications will be reviewed by a panel of technical experts. An implementation period for selected states and practice participants is expected to run through the third-quarter of 2027, during which time CMS and states will provide infrastructure funding to practice participants to support the care delivery framework, including information technology, telehealth tools, and practice transformation activities. Participating states and practices will then provide care to Medicare and Medicaid beneficiaries through the IBH Model from the end of 2027 through the third-quarter of 2032.

Impact on Care

The IBH Model has significance for the future delivery of behavioral health and SUD treatment. First, it is an attempt to integrate the traditionally siloed system of physical and behavioral health care and will help improve access to whole-person behavioral health resources. The program indicates CMS is aware of how often behavioral health and physical health conditions go hand and hand and affect each other. Second, the IBH Model represents multi-payer alignment between Medicaid and Medicare. Medicare and Medicaid patients experience disproportionately high rates of mental health conditions and/or SUD. Not only are additional resources important for these historically vulnerable patient populations, but multi-payer alignment on various elements like payment models and quality measures provides additional flexibility and incentive for designing Medicaid Alternative Payment Models for individual states. Lastly, while the IBH Model is limited to Medicaid and Medicare patients, it is likely that commercial payors may follow suit with similar programs, particularly if CMS shows successful outcomes. Providers in the behavioral health space should welcome the increased focus and investment into an infrastructure designed to improve access to quality whole-person care.