In January 2024, the Centers for Medicare and Medicaid Services (CMS) announced a new innovation care delivery model that seeks to bridge the gap between behavioral and physical health. The Innovation in Behavioral Health (IBH) Model aims to improve the quality of care and behavioral and physical health outcomes for adults with moderate to severe mental health conditions and substance use disorders (SUDs). The IBH Model will service beneficiaries who are enrolled in Medicare and Medicaid, including those who are dual eligible.[1] These populations experience higher than average rates of mental health conditions or SUDs, or both, highlighting the importance of a model that integrates behavioral and physical healthcare as well as addressing health-related social needs (HRSN).[2]

In 2024, the Commonwealth Fund reported an estimated 12.8 million dual-eligible beneficiaries in the United States. This population is on the rise as the number of dual-eligible beneficiaries increased from 10 million to 12 million between 2016 and 2022.[3] Dual-eligible beneficiaries often face a fragmented and disjointed system of care due to separate eligibility requirements, benefits, and rules for Medicaid and Medicare. In 2024, 5.2 million dual-eligible individuals were enrolled in Dual-Eligible Special Needs Plans (D-SNPS), a Medicare Advantage plan designed specifically for dual-eligible individuals.[4] D-SNPs can offer better coordination of Medicare and Medicaid benefits compared to other Medicare Advantage plans in an effort to improve patient outcomes. The new IBH model seeks to further close the gaps in care for those who are dual eligible with moderate to severe mental health conditions and SUDs.

The Notice of Funding Opportunity (NOFO) application period for the IBH Model is currently open and applications are due September 9, 2024. The type of award under this NOFO is a cooperative agreement. CMS anticipates issuing eight award notices, which will authorize the cooperative agreement awards, on December 17, 2024. The program performance period will run for eight years, consisting of a three-year pre-implementation period (January 1, 2025 – December 31, 2027) and a five-year implementation period (January 1, 2028 – December 31, 2032). After the initial award, continued funding will be distributed via non-competing continuation awards when the awardee states show satisfactory progress during the prior budget period.

State Medicaid agencies (SMAs) in the selected states will be issued cooperative agreement awards of up to $7.5 million each to implement the IBH Model, depending on the proposed budget submitted by the state. States will work with the following organizations to develop and implement the IBH Model:

• Practice participants for the IBH Model (“Practice Participants”) that will be eligible to participate in both the Medicare and Medicaid components of the IBH Model.
• The state’s mental health, SUD authorities, or both to ensure alignment in clinical policies.
• At least one partnering Medicaid managed care organization (MCO) or another intermediary partner, where applicable, to support the development and implementation of the IBH Model in the Medicaid Payment approach.  

Cooperative agreement awards, like the ones issued under the IBH Model NOFO, provide for substantial CMS programmatic involvement with each state during the lifespan of the model. This cooperative agreement will require states to:

• Work with MCOs and other intermediaries to recruit Practice Participants into the IBH Model;
• Collaborate with CMS, Practice Participants, MCOs, and other intermediaries to design and implement the care delivery framework;
• Develop and implement the IBH Medicaid Payment Approach to support the model care delivery framework in partnership with CMS;
• Allocate funding to help Practice Participants develop and maintain infrastructure necessary to execute the care delivery framework and participate in value-based payment activities;
• Build or adapt an existing convening structure to improve data management, provide Practice Participants with technical assistance, and help implement the Medicaid Payment Approach in partnership with CMS, and
• Enable the flow of model data on quality measures to CMS on a quarterly or annual basis to help evaluate patient and caregiver experiences in the IBH Model, including through technical assistance for Practice Participants.

Eligible Practice Participants will be specialty behavioral health practices, including community mental health centers, opioid treatment programs, and public or private practices with outpatient mental health or SUD services, or both.[5] Practice Participants will be responsible for coordinating an interprofessional care team to ensure the comprehensive care of a patient’s physical and behavioral health, and HRSNs. The IBH Model follows a value-based care approach, where the Practice Participants will be compensated based on quality of care provided and improved patient outcomes.

In the IBH Model, Practice Participants will be responsible for conducting screenings and assessments of behavioral and physical health, and health-related social needs. This approach establishes the behavioral health setting as a point of entry to identify and secure further care and facilitate collaboration for comprehensive care.[6] 

Practice Participants who participate in the additional Medicare payment model will receive a per-beneficiary-per-month payment to support their implementation of the care delivery framework as well as supplemental performance-based payments during the implementation period (i.e., model years 4 through 8).[7]

For more information or to learn more about CMS initiatives and updates, please contact the professionals listed below, or your regular Crowell contact.

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[1] Innovation in Behavioral Health (IBH) Model | CMS

[2] Id.

[3] Health Care Experiences Dual-Eligible Medicare Medicaid Beneficiaries | Commonwealth Fund

[4] 10 Things to Know About Medicare Advantage Dual-Eligible Special Needs Plans (D-SNPs) | KFF

[5] Innovation in Behavioral Health (IBH) Model | CMS

[6] Innovation in Behavioral Health (IBH) Model, Model Notice of Funding Opportunity (NOFO) Webinar (cms.gov)

[7] https://www.americanhealthlaw.org/content-library/publications/toolkits/0176c1be-a49b-4baa-b876-94a776b79d49/CMS-Value-Based-Care-Toolkit.