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The First of Many Firsts: The New CMS Innovation in Behavioral Health Model

Analysis  |  By Laura Beerman  
   May 09, 2024

Specialty behavioral health practices will be incentivized to coordinate comprehensive health.

The CMS Innovation Center will soon issue a Notice of Funding Opportunity for its new Innovation in Behavioral Health (IBH) Model. First announced in January, IBH represents multiple firsts:

  • The first CMMI payment model that targets BH/SUD
  • The first to focus on these populations in Medicaid and Medicare
  • The first to put specialty BH providers in charge of integrated care teams that deliver not only BH/SUD but physical health services

The IBH Model: Key Details

CMS designed IBH to deliver care that is comprehensive and integrated, patient-centered and whole-person.

What: Per a CMS spokesperson, IBH will focus on improving quality of care and outcomes through interprofessional care teams that will integrate services and bridge the gaps between physical and behavioral health. IBH also supports specialty BH practices on the path to accountable care. 

Who: IBH stakeholders include:

  • Providers — Specialty BH practices that deliver outpatient services
  • Payers — Up to eight State Medicaid agencies and their MCO or related partners
  • Patients — Medicaid and Medicare members with moderate to severe BH and/or SUD conditions

When: Announced Jan. 18, 2024, CMMI will release the IBH funding notice this spring and begin the eight-year model this fall.

The Beginning Of Bi-directional Care?

For decades, PCPs have played a role in patient mental health: “What’s going on? How’s your stress? How much do you drink?” The answers might generate a referral — from primary care to behavioral health.

The IBH model flips the script, allowing BH providers to take the lead and:

  • screen and assess patients for comprehensive needs
  • treat select health conditions and health-related social needs (HRSN), in addition to BH/SUD, within scope of practice
  • refer patients for added needs and monitor overall health/HSRN status
  • develop a health equity plan to address health disparities with community partners
  • expand HIT to improve data sharing and quality reporting

These services reflect IBH’s four program pillars — Care Integration, Care Management, Health Equity, and HIT — and its “No Wrong Door” approach for patients.

The CMS spokesperson added: “Since individuals with moderate to severe behavioral health conditions may already visit a behavioral health setting, the behavioral health practice will facilitate close collaboration with primary care, other physical health providers, and health-related social needs partners to support whole-person health.”

These providers will include PCP/SCP practices, Community Mental Health Centers, opioid treatment programs, and safety net providers.

Payers: The Changing Role of Medicaid and Medicaid MCOs.

CMS will choose up to eight state Medicaid agencies for IBH. They in turn will choose their Medicaid MCO or related partners to operationalize the model:

  • select, manage and support BH provider networks
  • build capacity (staff, HIT, practice transformation)
  • recruit patients
  • implement new payment models
  • improve data and analytics

While many of these are fairly traditional health plan activities, IBH is another example of Medicaid MCOs being asked to do more toward healthcare’s Quintuple Aim: improving patient cost, quality, experience and equity along with workforce well-being. And for very good reason.

IBH’s Big Why

Per CMS, Medicaid and Medicare members have higher BH/SUD prevalence, worse outcomes and care experiences, and more preventable utilizations and premature deaths:

  • 25% of all Medicare enrollees experience mental illness
  • 40% of adult Medicaid enrollees experience either mental illness or SUD
  • Higher-than-average SUD rates among both Medicaid and Medicare enrollees

Medicaid and Medicare members with BH/SUD conditions also experience more stigma. This can deter care for not only mental but chronic physical conditions like diabetes and heart disease. Perhaps that’s why nearly 50% of all Medicaid spending, per CMS, is for BH and/or SUD conditions.

An Interesting Footnote

Despite the obvious toll, human and financial, MH and SUD remain healthcare’s “ugly step-sisters” — a quote from the 2023 Inspire Recovery conference where former Rep. Patrick Kennedy called for a federal BH/SUD payment model and panelists noted: “We have an opportunity to change the entire system.”

A year later at that same conference, CMS presented details on IBH. There was also a familiar refrain: the only way to make BH/SUD progress is through reimbursement. The Innovation in Behavioral Health Model provides funding and incentives to make progress.

For HealthLeaders, a CMS representative noted: “[S]pecialty behavioral health practices have had limited opportunities to participate in value-based care . . . By the end of the model, we expect that practice participants will be equipped to engage in more sophisticated alternative payment models.”

These limits have long been the case and not only in VBC. While digital mental health innovation abounds, it has focused more on treatment for anxiety and depression versus conditions like bipolar, dementia and schizophrenia.

But things are changing — and specialty mental health providers may take the driver’s seat.

Laura Beerman is a contributing writer for HealthLeaders.


A new CMS payment model is the first of many firsts — and not a moment too soon for America’s behavioral health and substance use crises.

A Notice of Funding Opportunity is forthcoming for the Innovation in Behavioral Health (IBH) Model, which puts specialty BH/SUD providers in charge of all care coordination.

Advocates have called for such a model, with a key SUD conference providing interesting bookends on the state of the field, the industry — and the money.

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