Alert
New CMS Model to Reward Behavioral Health Integration with Primary Care
This article was updated January 13, 2025.
The Centers for Medicare & Medicaid Services (CMS) finalized the Innovation in Behavioral Health (IBH) Model, and confirmed that state Medicaid agencies in Michigan, New York, Oklahoma, and South Carolina have been selected to participate.
IBH aims to improve care for Medicare and Medicaid beneficiaries living with mental health conditions and substance use disorders (SUD) by bridging the gap between mental and physical health care. The eight-year model begins on January 1, 2025.
Model Design
Central to IBH is the integration of behavioral health with physical health services, emphasizing a comprehensive and coordinated approach to patient care. This includes applying interprofessional care management strategies and strengthening health information technology (IT) systems capacity to improve care delivery and patient outcomes. Emphasis is placed on health equity, ensuring accessible and high-quality care for all beneficiaries, particularly those from underserved communities.
Selected Locations
Oklahoma is implementing IBH statewide, while Michigan, New York, and South Carolina are implementing the model in designated sub-state geographic service areas. Additional details are forthcoming.
Practice Participants
Per CMS, practice participants in IBH will be specialty behavioral health organizations and providers, including:
- Public or private practices
- Outpatient opioid treatment programs
- Community Mental Health Centers (CMHCs)
- Certified Community Behavioral Health Clinics (CCBHCs)
- Tribal health clinics
- Local health departments
- Hospital- or university-affiliated outpatient behavioral health programs or clinics
- Safety net providers where individuals can receive outpatient mental health and SUD services including Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs)
State Medicaid agencies will work with at least one managed care organization (MCO) and/or other intermediaries to recruit and select participant practices. At the time of application, practice participants must meet all the following criteria:
- Are licensed by the state Recipient to deliver behavioral services, either mental health and/or SUDs;
- Meet all state-specific Medicaid provider enrollment requirements;
- Are eligible for Medicaid reimbursement;
- Serve at the outpatient level of care, at least 25 people enrolled in Medicaid on average per month (age 18 or older) with moderate to severe behavioral health conditions; and
- Provide mental health and/or SUD services at the outpatient level of care.
Model Requirements
Practice participants are required to provide the following services:
- Conduct an initial screening and assessment of behavioral and physical health needs
- Offer treatment or closed-loop referrals to other care specialists and community-based resources
- Provide care management services and monitor ongoing behavioral and physical health conditions
- Screen for health-related social needs (HRSNs) annually
Participating practices are required to develop a health equity plan (HEP) that describes how disparities that impact their service populations will be addressed.
Quality Reporting
Quality measures related to diabetes, hypertension, and tobacco use disorder will be used to measure the impact of care integration. Practice participants are not required to treat these conditions in the behavioral health setting; however, they are expected to make appropriate referrals and provide care management services related to these conditions, and track and monitor outcomes.
The five practice-based quality measures are as follows:
- Tobacco Use: Screening and Cessation Intervention
- Controlling High Blood Pressure
- Emergency Department Utilization
- Patient-Reported Outcomes and Measurement-based (PROM) Care Attestation (under development by CMS)
- Screening for Social Drivers of Health
Additionally, the states will be evaluated on separate quality measures, including:
- Follow-Up After Emergency Department Visit for Substance Use
- Follow-Up After Hospitalization for Mental Illness
- All-Cause Re-Admissions
- Emergency Department Utilization
- Diabetes screening and control measures
- Either colorectal or breast cancer screening.
CMS does not anticipate that IBH will qualify as an Advanced APM for Quality Payment Program (QPP) reporting.
Timeline and Payments
Selected state Medicaid agencies will receive a maximum of $7.5 million in cooperative agreement funding over the course of the eight-year model. Each state Medicaid agency is required to implement a Medicaid Payment Approach that aligns with the Medicare Payment Approach on key features.
IBH model payments are upside-only, meaning that participants have the potential to receive a bonus payment, and there’s no risk that a participant will owe a portion of its revenue back to CMS or the MCO.
Practices that serve people with traditional fee-for-service Medicare and dual-eligible patients may participate in the Medicare Payment Approach and will receive payments directly from CMS. These practices are eligible to receive infrastructure funding in years two through five and will receive a risk-adjusted per-person-per-month (PMPM) Integration Support Payment (ISP) as well as performance-based payments (PBP) in years four through eight.
Infrastructure Payments
The infrastructure payments to states and practice participants are intended to support investment in the staffing, IT, and workflow changes needed to implement the model. Eligible uses of the funding for IT may include:
- Adoption and upgrading of electronic health record (EHR) systems
- Patient portals
- Registries
- Interoperability solutions
- Telehealth tools
- Population health management tools
States are required to provide at least $100,000 per practice to participants enrolled in only the Medicaid portion of the program. Ultimately, the amount will be determined by the state through a practice needs assessment process.
Practices enrolled in both the Medicaid and Medicare programs will not receive infrastructure funding from the state, but may apply directly to CMS for up to $200,000.
Value-Based Payments
In years four through eight, the model payments are intended for implementation of the care delivery framework and quality incentives.
- ISP. The ISP is expected to range from $200 to $220 PMPM, adjusted for geographic variation, and paid by CMS prospectively on a quarterly basis. IBH will establish a model-specific billing code that practice participants will use to submit claims for care coordination and case management services. Practice participants receiving ISP payments will not be allowed to bill CMS for Chronic Care Management, Principal Care Management, Psychiatric Collaborative Care Management, Behavioral Health Integration, or Community Health Integration.
- PBP. The maximum PBP will be up to 3% of the ISP during model year four, increasing to 4% in year five, and 5% in year six and beyond. The PBP will be “pay for reporting” in model years four and five and will shift to “pay for performance” with incentive for improvement starting in year five. For example, in model year four, if a practice met the attainment threshold for three of the five quality measures (60%), they would receive a PBP totaling 1.8% (60% x 3%) of their ISP.
Next Steps
Details can be found in the Notice of Funding Opportunity, which provided initial information to the state agency applicants. The FAQs and Fact Sheet provide additional guidance.
Potential practice participants should expect to hear from the selected state Medicaid agencies or MCOs beginning in 2025, as they begin to recruit applicants. Interested parties can sign up for CMS’ email listserv to receive ongoing updates.
We’re Here to Help
If you’re interested in applying to the IBH Model, please contact your Moss Adams professional. Our health care strategy team can provide more information about program benefits, requirements, and support with operational and financial planning.