Three Things States Should Know Before Applying for CMMI’s Innovation in Behavioral Health Model

In January 2024, the Center for Medicare & Medicaid Innovation (CMMI) announced the Innovation in Behavioral Health (IBH) model, an eight-year initiative that funds states to encourage behavioral health providers to integrate physical and behavioral health care within a behavioral health setting for adults with moderate to severe mental health conditions and substance use disorders. Four states (Michigan, New York, Oklahoma, and South Carolina) were selected for the first cohort. With CMMI reopening the application period, additional states now have an opportunity to participate.

IBH offers a significant opportunity to build on and accelerate federal and state investments in behavioral health transformation, while introducing value-based payment (VBP) requirements.  Successful implementation will require coordination across Medicaid, health plans, state behavioral health agencies, and mental health and substance use disorder (SUD) providers. As states consider whether to apply to this second cohort, three priorities stand out.

1. IBH is designed to complement, not replace, existing behavioral health reforms.

CMMI intends for IBH to build upon existing initiatives such as Certified Community Behavioral Health Clinics (CCBHCs), Medicaid Health Homes, and Promoting Integration of Primary and Behavioral Health Care (PIPBHC) grants. For many states, this alignment could offer a strategic advantage. States that already reimburse CCBHCs through a Medicaid prospective payment system or operate Medicaid Health Home programs can use them as a foundation for the VBP methodology required under IBH.

Each state should examine how its relevant care and payment models currently define and pay for care integration and management, inclusive of behavioral health, physical health and, social needs screening, assessment, and care planning.  Cross-walking current initiatives with IBH model requirements will be essential to determine whether adjustments to federal authorities, state policy, quality measures, or systems are needed to support this level of integration. Our combined experience implementing VBP models suggests that this type of alignment work is one of the most critical early steps for success.

2. The model’s success depends on targeted investment in behavioral health technology.

IBH is one of the first CMMI models to recognize the digital divide between physical and behavioral health providers. Through cooperative agreement funds, states can strengthen health information technology (HIT) capacity, interoperability, and population health tools at participating practices.

For many behavioral health organizations, particularly those that did not benefit from the Health Information Technology for Economic and Clinical Health ACT (HITECH) incentives, this investment will be essential. States should assess the status of EHR adoption and data exchange capabilities of their provider community to see where targeted investment will be beneficial. This will help states to determine the best path forward to have model participants adopt health IT that meets the requirements of the Health and Human Services Office of the National Coordinator (ONC).

For behavioral health providers in rural areas, states can also consider how IBH could build on the forthcoming Rural Health Transformation Program initiatives, which states can use to modernize HIT in rural areas. States may also look to braid IBH funding with state appropriations, Medicaid administrative dollars, or federal broadband programs to meet IBH program-specific requirements, while building durable digital infrastructure.

3. Value-based payment will serve as the organizing framework for care delivery.

Consistent with many recent CMMI initiatives, IBH is a multi-payer model that aims to align payment models across payers. CMMI will lead design of the Medicare payment model and partner with states on designing the aligned Medicaid VBP.  For the Medicare component, CMMI has indicated that starting in Model Year 4, participating practices will receive a prospective, risk-adjusted integration support payment of approximately $200 to $220 per member per month.

For Medicaid, states will have greater flexibility but also greater design responsibility. Based on our experience, implementing sustainable VBP models requires a structured planning and design process, which is done in partnership with stakeholders and federal partners. Input from providers, managed care plans, members, and patient advocates is key to developing a VBP model that improves outcomes for Medicaid members. Additionally, states should consider how IBH can reinforce their broader payment reform strategies and whether it can serve as a testing ground for shared accountability between physical and behavioral health systems.

Looking Ahead

CMMI expects to award up to five states with $7.5 million per state through cooperative agreements.  This will include a three-year planning period followed by five years of implementation. IBH has the prospect of reinforcing state investments in behavioral health if states can use the planning window to align existing Medicaid initiatives, strengthen behavioral health HIT capacity, and design payment models in partnership with stakeholders that make integration sustainable beyond the model’s timeframe.

Coral Health Advisors supports states in developing competitive CMS applications and in working with stakeholders to design sustainable value-based payment methodologies. States interested in participating in the next IBH application cycle or in designing aligned VBP models can reach out to info@coralhealthadvisors.com.