Deadline: 03-Jun-2026
The Centers for Medicare & Medicaid Services (CMS), through its Center for Medicare & Medicaid Innovation, has announced the launch of the Innovation in Behavioral Health (IBH) Model – Cohort II, a groundbreaking seven-year initiative designed to strengthen the integration of behavioral and physical health services.
The IBH Model aims to improve care for adult Medicaid, Medicare, and dually eligible beneficiaries experiencing moderate to severe mental health conditions or substance use disorders.
The IBH Model introduces a value-based payment system that aligns incentives across Medicaid and Medicare, encouraging providers to focus on quality, coordination, and long-term health outcomes. It supports specialty behavioral health organizations in building a holistic framework that links behavioral health treatment with primary care and community-based services. This integration is expected to not only improve patient outcomes but also reduce avoidable hospital visits and overall healthcare costs.
CMS will select up to five state Medicaid agencies to participate in this initiative. Each selected state will receive up to $7.5 million over the seven-year program, with an anticipated total budget of $37.5 million across all recipients. The Model will begin with a two-year pre-implementation phase (January 2027–December 2028), allowing for planning, coordination, and infrastructure development, followed by a five-year implementation phase (January 2029–December 2033).
The program’s design emphasizes building strong linkages between behavioral and physical health care. It promotes screening and referrals for social determinants of health such as food security, housing stability, and transportation, while also strengthening care coordination and management to ensure continuous engagement with health and social services. A major focus of the model is to encourage the adoption of certified health information technology systems, helping providers improve care delivery and data sharing.
Eligible practice participants include community mental health centers, certified community behavioral health clinics, rural and federally qualified health centers providing behavioral health services, critical access hospital outpatient behavioral health clinics, opioid treatment programs, private specialty clinics, and tribal or local health organizations offering behavioral health care. To qualify, participants must be licensed to deliver behavioral health treatment services, meet state-specific requirements, and serve adult Medicaid beneficiaries with moderate to severe conditions.
The IBH Model will measure success based on improvements in access, quality, and equity of care, as well as reductions in unnecessary emergency and inpatient utilization. By bridging the gap between behavioral and physical health systems, CMS aims to foster sustainable, patient-centered care models that address the full spectrum of needs affecting individuals’ health and wellbeing.
For more information, visit Grants.gov.