Innovation in Behavioral Health (IBH) is a grant from the Centers for Medicare and Medicaid Services (CMS) that funds state-based integrated care models serving people with moderate to severe mental health conditions or substance use disorders. CMS awards cooperative agreements up to ,500,000 to state Medicaid agencies to build infrastructure for specialty behavioral health practices to coordinate physical, behavioral, and social care.

Current participants include Michigan, New York, and South Carolina, with up to eight states eligible over the model's 2025–2032 lifespan. Practice Participants receive per-person-per-month payments plus performance-based incentives starting in 2028.

IBH (Innovation in Behavioral Health) Model | CMS IBH (Innovation in Behavioral Health) Model The Innovation in Behavioral Health (IBH) Model is a state-based model that leverages patients’ relationships with specialty behavioral health practices to provide whole-person, integrated care that better addresses their behavioral, mental, and physical health.

The model will serve people with Medicaid, Medicare, and dually eligible beneficiaries. The IBH Model will run from 2025-2032. Current state participants are Michigan, New York, and South Carolina.

Problem: Medicare and Medicaid populations face disproportionately high rates of mental health conditions, substance use disorders (SUD), or both. As a result, they are more likely to experience poor health outcomes, such as frequent visits to the emergency department, hospitalizations, and even premature death.

Solution: The IBH Model offers a “no wrong door” approach to delivering care and promoting prevention, enabling specialty behavioral health providers to serve as a point of entry to identify an individual’s range of needs, secure further care, and facilitate close collaboration with primary and specialty care providers.

Outcomes: People receiving care through the IBH Model will have a more integrated, person-centered experience that focuses on all aspects of their health and will help them to stay healthier longer, with fewer hospital visits and improved physical and behavioral health outcomes.

Strategy: The IBH Model supports the Innovation Center’s core pillar of promoting evidence-based prevention by incorporating screening, early intervention, care coordination, and identification of upstream drivers of health into provider workflows. CMS provides state Medicaid agencies (SMAs) with cooperative agreement funding to develop the necessary infrastructure and capacity to successfully implement the IBH Model in their state.

In turn, SMAs recruit and fund specialty behavioral health practices and settings (Practice Participants) to deliver care to people with moderate to severe behavioral health condition(s), substance use disorder(s) (SUD(s)), or both. Medicaid populations experiencing mental health conditions, SUD, or both, account for nearly half of all Medicaid expenditures.

These populations often encounter significant barriers to care, including stigma and limited access to treatment. They may also have untreated or poorly managed physical health conditions such as diabetes or heart disease, all of which can contribute to poor health outcomes or even death.

Providers face multi-faceted challenges in trying to deliver care to these vulnerable populations in large part because behavioral and physical health care are often not fully integrated in the health care delivery system. The IBH Model supports specialty behavioral health practices to lead interprofessional care teams covering all aspects of a person’s care.

As a result, this model will help providers to more comprehensively address root causes of their patients’ conditions before they increase in severity. Improve behavioral and physical health outcomes for Medicare, Medicaid and dual-eligible populations who experience moderate to severe mental health condition(s), SUD(s), or both.

Support integrated teams that coordinate community-based providers, behavioral health clinicians, primary care, and social services to create care plans that support each person’s needs and preferences Align Medicaid and Medicare payments to incentivize improved quality and better coordinated, person-centered care The IBH Model puts the behavioral health provider at the center of value-based integrated care to address physical, behavioral, and social health needs holistically.

The model also emphasizes multistate alignment in infrastructure, payment, and care delivery, better preparing specialty behavioral health providers (Practice Participants) for broader participation in value-based systems.

On January 1, 2025, CMS issued cooperative agreements awards to three state Medicaid agencies in Michigan, New York, and South Carolina, and will award up to eight (8) state Medicaid agencies over the life of the model. The selected states partner with their state’s mental health or SUD authorities or both to ensure alignment in clinical and payment policies.

States delivering Medicaid services through the fee-for-service system are eligible to participate in the model, as well as those states that leverage their Medicaid managed care organization to deliver behavioral health services are eligible to participate in the model.

Practice Participants will receive a per-person-per-month payment from CMS to support required activities, including conducting screenings and assessments of behavioral and physical health, and other social factors like access to reliable housing and food. These payments will be further supplemented with additional performance-based payments throughout the Implementation Period (2028 – 2032).

Practice Participants will provide closed-loop referrals to primary care providers, specialists, and community-based resources. Targeted investments in interoperability and tools (including electronic health records) will help participants to improve quality reporting and data sharing.

Practice Participants serving Medicaid beneficiaries are initially recruited to participate in the model and those Practice Participants who want to serve Medicare and dually-eligible beneficiaries will have that opportunity through a Request for Applications.

All Practice Participants that are specialty behavioral health practices must meet the following criteria to be an IBH Model Practice Participant: Licensed by the state to deliver behavioral services, either mental health, substance use disorders, or both; Meet all state-specific Medicaid provider enrollment requirements; Eligible for Medicaid reimbursement; Serve 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 or behavioral health, SUD services, or both at the outpatient level of care.

Pre-Implementation Period (2025-2027) States and Practice Participants will receive funding for infrastructure building and capacity building Implementation Period (2028-2032) States and Practice Participants begin serving Medicaid, and Medicare and dually-eligible beneficiaries where applicable.

Selected states that have Medicaid Practice Participants who want to participate in the Medicare arm of the model, too, can apply in response to a competitive CMS Request for Application (RFA) process. All applications will be reviewed by a panel of technical experts.

Notice of Funding Opportunity (PDF) IBH Notice of Funding Opportunity Office Hours Slides (PDF) | Transcript (PDF) | Recording (MP4) Slides (PDF) | Transcript (PDF) | Recording (MP4) Slides (PDF) | Transcript (PDF) | Recording (MP4) Slides (PDF) | Transcript (PDF) | Recording (MP4) Cohort II Introduction Webinar (December 11, 2025) Slides (PDF) | Transcript (PDF) | Recording (MP4) Fact Sheet on Model Benefits for State Medicaid Agencies (PDF) Patient Journey Map (PDF) Frequently Asked Questions Contact the IBH team at: IBHModel@cms.

hhs. gov Visit our Innovation Model webpage for a list of all CMS Innovation Center model tests. Frequently Asked Questions Number of Participants: 3 (Michigan, New York, and South Carolina) Category: State & Community-Based Models Authority: Section 1115A of the Social Security Act CMS Innovation Center Highlights Learn about topics that play a critical role in our work on our Key Concepts webpage .

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