Behavioral health is the next frontier in value-based care. The evolution of behavioral health payment toward value-based care is accelerating, fueled by experimental programs and pilot projects designed to identify best practices for clinical and payment models that enhance patient care while controlling costs. Now is the time for providers to participate in and influence the development of whole person and patient-centered care payment models.

The current trajectory for value-based care in behavioral health involves two different, but complementary paths: integration with physical health and coordination along the behavioral health continuum of care. Each path offers different practical benefits and challenges for providers. This article evaluates the opportunities presented by each path and identifies next steps for providers who want to engage in the development of these care models. 

Whole-Person Care: HHS Promotes Behavioral Health Integration

The first path to value-based care is behavioral health integration. Integrating behavioral health care with physical health, particularly through primary care, has clear benefits for patients.1 There has been some movement in recognizing the value of care coordination and behavioral health integration under current payment systems.2 However, calls for behavioral health integration are growing more urgent, and providers have more opportunities to participate in and benefit from the development of models that incentivize and reward providers for improved care that results from integration.3

In particular, the Department of Health and Human Services (“HHS”) identified behavioral health integration as a core tenant of its strategy to address the United States’ mental health crisis.4 HHS is taking steps to encourage and fund projects to promote behavioral health integration, as well as enhancing federal mental health parity requirements to promote financial feasibility for providers to furnish behavioral health services.5

On January 18, 2024, CMS announced a new innovation model aimed at providing whole-person care to Medicare and Medicaid beneficiaries with moderate to severe mental health conditions and substance use disorder.6 The Innovation in Behavioral Health (“IBH”) Model focuses on four main pillars:

1. Care Integration,
2. Care Management,
3. Health Equity, and
4. Health Information Technology.7

CMS will issue awards to eight Medicaid state agencies to develop and implement a model to deliver integrated physical and behavioral health care.8

The IBH Model envisions leadership by behavioral health practices who participate in the program. Behavioral health providers screen and assess eligible patients for behavioral, social,9 and physical health needs and lead interdisciplinary teams to comprehensively address those needs.10 Providers are paid based on the quality of care provided to patients and improved patient outcomes.11

The behavioral health integration model has the benefit of energy, supportive studies, and funding through grants and pilot projects. Providers have an opportunity to benefit from this momentum and the support to design models that work for providers and patients. However, this model requires resilient and trusting relationships between physical and mental health care providers to facilitate this type of whole-person care and to ensure that compensation for these programs is allocated appropriately to support the programs operational and staffing needs and the program’s operational goals.

Coordination Across the Behavioral Health Continuum of Care

While behavioral health integration has the attention of industry stakeholders—for good reason—it is not the only path to provide personcentered, high-quality, and efficient care in behavioral health. A second path to value-based care in behavioral health is a focus on improving care along the continuum, from inpatient psychiatric care to outpatient settings.

This second path improves patient outcomes (such as reduced mental health hospitalizations)12 and may also facilitate a more targeted approach to patient-centered care that yields clearer metrics for improvement and more rapid adoption. Identifying clear quality metrics for behavioral health has been a challenge in the development of value-based models, but coordinating care between levels of care can provide clear standards and metrics for improved patient outcomes. For example, demonstrating that a patient successfully moved to a lower-level setting for treatment and remained stable at that lower level would demonstrate a positive patient outcome as well as cost-savings, which is the type of win-win target that value-based care aims to achieve. Additionally, this framework may be more familiar for third-party payors, since this type of coordination has often been the focus of value-based care efforts for physical health, which may lead to more productive conversations around value-based models.13 Finally, focusing on enhancing care within the behavioral health continuum of care may allow for a more targeted and aligned approach among participating providers.

In short, behavioral health providers have an opportunity to walk parallel paths toward providing patient centered care by working together to improve care along the continuum, and capturing the value associated with the benefits of providing supportive, patient-centered care.

What Next?

While there are many potential paths to value-based care in behavioral health, integration with physical health as well as focusing on enhancing the behavioral health continuum of care are two opportunities that provide clear benefits to patients, as well as opportunities and a framework for compensation. Providers who are interested in pursuing value-based care opportunities should consider taking the following steps:

1. Medicaid State Agency Engagement – Providers have an opportunity to encourage states to participate in the IBH Model (applications will be due in Spring 2024) and to engage in the state’s program design and implementation. Additionally, many state Medicaid agencies have other grants and programs to support and provide coverage for integrated behavioral health care for Medicaid beneficiaries.14
2. Identify and Design Partnerships – Coordinating care between physical and behavioral health or along the continuum of care requires strong partnerships among providers. Participation in, or creation of, a clinically integrated network provides a framework for coordination of care and negotiation of agreements to support new care models, but requires consideration of how the parties share information, commit to quality standards, and support each other.
3. Collect and Use Data – Providers who capture and understand the care they provide to patients will be in a stronger position to negotiate value-based agreements. For example, providers can use information from measurement-based care to demonstrate the effectiveness of treatment. Providers can use that information to design metrics to support quality-related bonus payments or other value-based compensation models. 

For years, the behavioral health industry has discussed the benefits of integrating physical and behavioral health care, as well as care coordination and value based care, but implementation has been sluggish. Providers who are ready to walk the walk have a significant opportunity to control the narrative and build models that benefit patients and providers, while capturing the value of providing thoughtful and comprehensive person-centered care. Working together through a clinically integrated network or other provider partnerships can help providers reach the critical mass necessary to break free from the inertia and implement care models that reward providers who provide excellent, whole-person, and valuable care to their patients.

1 See, e.g., Janine Archer, et al., Collaborative care for depression and anxiety problems, Cochrane Database of systematic reviews, (October 17, 2012), available at https://www.ncbi.nlm.nih.gov/pubmed/23076925; Balasubramanian, B. et al., Outcomes of Integrated Behavioral Health with Primary Care, J Am Board Fam Med. (2017), available at https://pubmed.ncbi.nlm.nih.gov/28379819/. See also Prom, M., et al., Implementation of integrated behavioral health care in a large medical center: Benefits, challenges, and recommendations, J. Behav. Health Serv. Res (July 2021), available at https://www.ncbi. nlm.nih.gov/pmc/articles/PMC8144234/pdf/nihms-1649955.pdf.

2 See Behavioral Health Integration, MLN Booklet (May 2023), available at https://www.cms.gov/files/document/mln909432-behavioral-healthintegration-services.pdf.

3 See, e.g., Integrating Behavioral and Physical Health: The Time is Now, American Hospital Association (September 2023), available at https://www.aha. org/system/files/media/file/2023/09/AHA-BH-Integration-TimeisNow-whitepaper-september-2023.pdf.

4 Erin Bagalman, et al., HHS Roadmap for Behavioral Health Integration, ASPE (Sept. 14, 2022), available at https://aspe.hhs.gov/sites/default/files/ documents/4e2fff45d3f5706d35326b320ed842b3/roadmap-behavioral-health-integration.pdf.

5 Id. For more on mental health parity, see within this Newsletter, Bragg Hemme, Will Mental Health Parity Get Some Teeth in 2024?

6 Press Release: Innovation in Behavioral Health (IBH) Model, CMS Newsroom (January. 18, 2024), available at https://www.cms.gov/newsroom/pressreleases/cms-announces-new-model-advance-integration-behavioral-health

7 Innovation in Behavioral Health (IBH) Model, available at https://www.cms.gov/priorities/innovation/innovation-models/innovation-behavioral-healthibh-model

8 Id.

9 See within this Newsletter, Lori Oliver, The Joint Commission’s National Patient Safety Goal: Advancing Health Equity.

10 Id.

11 Id.

12 Positive Effect of Collaborative Chronic Care Model on VA Mental Health, U.S. Dep’t of Veterans Affs. (April 22, 2020), available at https://www.hsrd. research.va.gov/impacts/chronic-care-model-mh.cfm#:~:text=Findings%20showed%20that%20mental%20health,health%20clinics%20in%20 those%20facilities.

13 See, e.g. Value-Based Care: What It Is, and Why It’s Needed, Commonwealth Fund (February 7, 2023), available at https://www.commonwealthfund. org/publications/explainer/2023/feb/value-based-care-what-it-is-why-its-needed#:~:text=Also%20known%20as%20value%2Dbased,%2C%20 quality%2C%20and%20equity%20metrics.

14 See, Madeline Guth, et al., How do States Deliver, Administer, and Integrate Behavioral Health Care? Findings from a Survey of State Medicaid Programs, (May 25, 2023) available at Kaiser Family Foundation https://www.kff.org/mental-health/issue-brief/how-do-states-deliver-administer-andintegrate-behavioral-health-care-findings-from-a-survey-of-state-medicaid-programs/; HCPF Awards $29 Million in Behavioral Health Care Integration Grants, Colo. Dep’t Health Care Policy & Financing (September. 5, 2023), available at https://hcpf.colorado.gov/hcpf-awards-behavioral-health-careintegration-grants.