IBH-NOFO-Cohort2-508.pdf

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U.S. Department of Health and Human Services Centers for Medicare & Medicaid Services Center for Medicare and Medicaid Innovation

Innovation in Behavioral Health (IBH)

Notice of Funding Opportunity Type: New

Funding Opportunity Award Type: Cooperative Agreement

Notice of Funding Opportunity Number: CMS-2Q2-26-001

Federal Assistance Listings Number (CFDA): 93.610

Notice of Funding Opportunity Posting Date: October 16, 2025

Applicable Dates:

(Optional) Letter of Intent to Apply Due Date: April 1, 2026

Electronic Application Due Date: June 3, 2026

Anticipated Issuance Notice(s) of Award: September 15, 2026

Anticipated Period of Performance: January 1, 2027 - December 31, 2033

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Table of Contents Executive Summary A. Program Description

A1. Purpose A2. Authority A3. Background

A3.1 How the IBH Model Addresses These Challenges Through Integrated Care and VBP A3.2 Alignment with Federal Priorities and State Medicaid Program Trends and Themes

A4. Program Requirements A4.1 Model Structure Overview A4.2 Recruitment of Practice Participants A4.3 IBH Care Delivery Framework A4.4 IBH Payment Strategy A4.5 Infrastructure Development and Funding A4.6 Convening Structure A4.7 Data, Quality, and Evaluation

A5. Technical Assistance and Information for Prospective Applicants B. Federal Award Information C. Eligibility Information

C1. Eligible Applicants C2. Cost Sharing or Matching C3. Letter of Intent C4. Ineligibility Criteria C5. Single Application Requirement C6. Continued Eligibility C7. EIN, UEI, Login.gov and SAM Registrations C8. Faith-Based Organizations C9. Other Eligibility Requirements

D. Application and Submission Information D1. Address to Request Application Package D2. Content and Form of Application Submission

D2.1 Application format D2.2 Standard forms D2.3 Application cover letter or cover page (optional)

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D2.4 Program Requirements and Expectations D3. Submission Dates and Times D4. Intergovernmental Review D5. Cost Restrictions

D5.1 Direct Costs D5.2 Indirect Costs D5.3 Prohibited Uses of Award Funds D5.4 Program Income

D6. Mandatory Disclosures E. Application Review Information

E1. Criteria E2. Merit Review and Selection Process E3. Review of Risk Posed by Applicants

F. Federal Award Administration Information F1. Federal Award Notices F2. Administrative and National Policy Requirements F3. Terms and Conditions F4. Cooperative Agreement Terms and Conditions of Award

Centers for Medicare & Medicaid Services F5. Health Information Technology (IT) Interoperability Language F6. Reporting

F6.1 Monitoring F6.2 Progress Reports F6.3 Performance Milestones F6.4 Evaluation F6.5 Learning System Participation F6.6 Financial Reports F6.7 Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements F6.8 Responsibility and Qualification Reporting F6.9 Audit Requirements F6.10 Payment Management System Reporting Requirements F6.11 Government-wide Suspension and Debarment Reporting Requirements

G. CMS Contacts

G1. Programmatic Questions

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G2. Administrative and Budget Questions H. Other Information Appendix I. Application Check-off List Appendix II: Health IT Capabilities and Support for Practice Participants Appendix III: State-Based Quality Measure Data Reporting Burden Appendix IV: Model context data templates Appendix V: Medicaid Payment Scenarios for Health Homes and CCBHCs Appendix VI: Medicare Payment Approach Details

Infrastructure Funding Integration Support Payment (ISP)

Appendix VII: CMS Attribution Methodology for Medicare and Dually Eligible Beneficiaries Appendix VIII: Glossary of Acronyms Appendix IX: Moderate to Severe Behavioral Health Conditions Appendix X: References

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Executive Summary The Innovation in Behavioral Health (IBH) Model (the “Model”) for Cohort II Recipients1 is a seven-year, voluntary service delivery and payment model promoting integrated care in behavioral health (BH) settings. The IBH Model will test the impact of a value-based payment (VBP) model aligned across Medicaid and Medicare that supports an integrated care delivery framework in specialty BH organizations and settings for adult Medicaid, Medicare, and dually eligible beneficiaries with moderate to severe mental health conditions and/or substance use disorders (SUDs).

The Centers for Medicare & Medicaid Services (CMS), through its Center for Medicare & Medicaid Innovation (Innovation Center), will select up to five state Medicaid agencies (SMAs) to participate in the Model. The Model will have a seven-year performance period, which will be comprised of a two-year Pre-Implementation Period (beginning January 2027 and ending December 2028) along with a five-year Implementation Period (beginning January 2029 and ending December 2033). Up to $7.5 million dollars in cooperative agreement award funding will be available to each selected Recipient over the course of the seven years.

Item Description

HHS Awarding Agency Centers for Medicare & Medicaid Services (CMS)

CMS Awarding Center Center for Medicare and Medicaid Innovation (The Innovation Center)

Notice of Funding Opportunity Title

Innovation in Behavioral Health

Authorization Section 1115A of the Social Security Act (the Act)

Federal Assistance Listings Number (CFDA)

93.610

Funding Opportunity Type New

Funding Opportunity Number

CMS-2Q2-26-001

Type of Award Cooperative Agreement

Type of Competition Competitive

1 CMS previously released an earlier version of this NOFO for Cohort 1 Recipients and issued those awards in 2024.

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Item Description

Letter of Intent CMS recommends a letter of intent to apply for this funding opportunity. These are optional. See Section C.3 Letter of Intent for more information.

Application Due Date and Time

June 3, 2026, by 11:59 pm EST

Anticipated Issuance Notice(s) of Award

September 15, 2026

Period of Performance Start Date

January 1, 2027

Period of Performance End Date

December 31, 2033

Anticipated Total Available Funding

$37.5 million (subject to availability of funds)

Estimated Maximum Award Amount

$7.5 million per Recipient

Estimated Maximum Number of Recipients

A. Program Description A1. Purpose This Notice of Funding Opportunity (NOFO) provides details and instructions on how to apply to the Innovation in Behavioral Health (IBH) Model.

The IBH Model will test the impact of a value-based payment (VBP) model aligned across Medicaid and Medicare that supports an integrated care delivery framework in specialty BH organizations for adult Medicaid, Medicare, and dually eligible beneficiaries with moderate to severe mental health conditions and/or substance use disorders (SUDs). The IBH Model framework for integrated care in BH settings will:

• Build and strengthen connections to physical health (PH) care for beneficiaries;

• Promote screening and referral for needs that impact health;

• Identify beneficiary issues that interfere with diagnosis, management, and treatment of health conditions, such as food, housing, and transportation needs;

• Leverage care management and care coordination to increase access to and engagement

10/16/2025 Page 7 of 139 with primary care and community services; and

• Encourage investments in certified health information technology (health IT) products and infrastructure improvement for their practice and patient population.

CMS will evaluate the Model's ability to:

• Improve quality of care;

• Increase access to care;

• Achieve greater balance in outcomes;

• Reduce avoidable emergency department and inpatient utilization, and thereby reduce federal program spending under Medicare and Medicaid; and

• Strengthen health IT systems capacity.

CMS will award up to five Cohort II cooperative agreement awards to state Medicaid agencies (SMAs). The Model for Cohort II Recipients will consist of a two-year Pre-Implementation Period along with a five-year Implementation Period as follows:

• Pre-Implementation Period: Two-year Pre-Implementation Period begins January 1, 2027, and ends on December 31, 2028.

• Implementation Period: Five-year Implementation Period begins on January 1, 2029, and ends on December 31, 2033.

This NOFO provides detailed information regarding the level of funding, flexibilities, and requirements for Recipients.

A2. Authority Section 1115A of the Social Security Act (the Act) authorizes the Secretary of the Department of Health and Human Services to test innovative payment and service delivery models expected to reduce Medicare, Medicaid, or Children's Health Insurance Program (CHIP) expenditures while preserving or enhancing the quality of care.

The Medicaid elements of the IBH Model shall operate according to existing Medicaid law, regulation, and sub-regulatory guidance, including, but not limited to, all requirements of any Medicaid demonstration projects under Section 1115 of the Act.

A3. Background The United States is currently facing an unprecedented BH crisis, which was further exacerbated by the COVID-19 public health emergency that began in 2020.(1) A quarter of Medicaid beneficiaries have BH diagnoses, yet they account for nearly half of total Medicaid expenditures.(2) An increasing number of Americans have mental health conditions and substance use disorders (collectively referred to in this document as “behavioral health” or “BH”). As of 2022, 23.1 percent of adults age 18 or older (or 59.3 million people) had a mental illness in the past year.(3) Among people age 12 and older, 17.3 percent (or 48.7 million people) had a SUD in the past year.

Additionally, during the COVID-19 public health emergency, racial and ethnic minority communities experienced disproportionately higher rates of psychosocial stressors. The BH system has long been uncoordinated and under-resourced, resulting in the following long-standing challenges:

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1. Poor Clinical Outcomes & Premature Mortality: People with BH conditions more frequently report co-occurring health conditions, such as diabetes, cardiovascular disease, and metabolic conditions, and higher rates of tobacco use.(4) Moreover, people with BH conditions are more likely to live with untreated or unmanaged HIV/AIDS and hepatitis C.(5, 6) Without adequate attention to PH needs, adults with mental health conditions and/or SUDs often have more emergency department (ED) visits and potentially preventable medical hospitalizations resulting from uncontrolled chronic conditions.(7) Adverse issues related to food, housing, or transportation, further contribute to the medical comorbidity of people with BH conditions. Research has found that, “persons with mental illness have increased rates of poverty…lack of access to healthy food choices, unsafe living conditions, exposure to early trauma, chronic psychological stress, and poor social networks.”(8)

Due in part to these factors, people with BH conditions experience worse health outcomes and significantly increased risk of premature mortality.(9-11) Premature mortality among people with mental illness is further magnified by substance use.(12) Preventable PH conditions contribute to premature mortality among people with severe mental illness and SUDs, reducing their lifespan by an average of 10 - 20 years.(13, 14) Compared to the general population, people living with serious mental illness (SMI) and/or moderate to severe SUDs have worse health outcomes and premature mortality due to: access to care obstacles, stigma related to receiving care, and untreated health conditions.(15, 16) A substance use disorder increases risk for overdose, accidental injury, attempted suicide, associated medical conditions, infectious diseases, and mental health conditions.

2. Increased Expenditures: Mismanaged (or unmanaged) BH conditions can lead to difficulty managing people's other chronic conditions as well as overutilization of certain types of costly care across the continuum, particularly in emergency department settings that are expensive and not aimed at prevention.(17) Total spending on BH increased approximately 62 percent between 2006 and 2015.(18) CMS spends substantially more on beneficiaries with BH conditions compared to spending for beneficiaries without.(19) People with co-occurring BH and PH conditions have higher overall health care needs and expenditures, and there is an opportunity for an intervention targeted at these people that aims to improve outcomes and reduce unnecessary spending. These higher costs are not just attributable to the costs of needed BH treatment, but to the mismanagement of BH conditions and lack of coordinated, accessible care for both BH and PH conditions. Because people with co-occurring BH and PH conditions have higher overall health care needs and expenditures, there is an opportunity for an intervention that aims to increase access to appropriate levels of prevention and treatment, coordinate care, improve outcomes, and reduce unnecessary spending.

3. Uncoordinated System with Significant Disparities in Care and Outcomes: Negative outcomes and disparities of care for patients with BH conditions are driven by systemic issues, including historical underinvestment in BH care, siloing of BH and PH services, and the stigma of BH treatment.(20) Individuals with mental health disorders often have poor access to and continuity of quality medical care, and exhibit patterns of underusing primary care and overusing emergency and medical inpatient care.(8) Individuals with SUDs often experience difficulties navigating the complex SUD treatment system due in part to structural barriers within the system itself like limited access to providers and treatment, insufficient team training, and policy and legal constraints.(21) The BH care delivery system is often fragmented from PH care and lacks the

10/16/2025 Page 9 of 139 integrated structures of care that promote long-term recovery.2 While care in acute clinical settings remains important, there is also a need for clinically appropriate, community-based integrated services to meet people in the settings in which they are already actively engaged.

4. Health Information Technology (health IT) Barriers: BH system challenges are further exacerbated by slow adoption of certified health IT products and infrastructure improvements for their practice and patient population, including certified electronic health record (EHR) technology, and lower participation in health information exchanges (HIEs) among specialty BH providers compared to PH providers, as current reimbursement rates and increasing costs leave specialty BH providers unable to invest in the necessary hardware, software, staff, and training to support integrated care.(22) Many specialty BH providers were not eligible for financial incentives for EHR adoption that were provided to other categories of providers as part of the Health Information Technology for Economic and Clinical Health Act (HITECH Act), of 9, further exacerbating low uptake rates.(23) Interoperability across different providers and settings of care is critical to facilitate the collaboration and communication necessary for integrated, preventative care and health promotion.

The HHS Substance Abuse and Mental Health Services Administration (SAMHSA) and the HHS Office for Civil Rights has made modifications under the authority of 42 U.S Code § 290dd–2 regarding the confidentiality of substance use disorder patient records, which are codified at 42 C.F.R. Part 2 and generally prohibits certain types of treatment programs from disclosing a patient's SUD information treatment records without patient consent except under specific circumstances such as reporting alleged child abuse, valid court orders, medical emergencies, and health care operations. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules also include protections for protected health information. Additionally, SAMHSA supports the Center of Excellence for Protected Health Information to help educate health professionals, family members, patients and others on HIPAA, Part 2, and other BH privacy requirements.(24) SAMHSA and the Office of the National Coordinator for Health Information Technology (ONC) also are working on efforts to promote use of EHRs by specialty BH providers.(25)

5. Lack of Payment Innovation in the BH Space: Payment innovation has not focused on BH services, which are historically underfunded and rely on a patchwork of state, federal, and grant sources. Specialty BH providers often lack a clearly defined role in VBP models designed for PH providers, leaving specialty BH providers with limited opportunities to meaningfully participate in alternative payment models (APMs). There is a lack of BH process measures that evidence has shown are appropriate for use in clinical quality improvement programs. This absence of BH process measures has made it difficult for specialty BH providers to meaningfully engage in accountable care.(27) VBP arrangements have the potential to transform the way providers deliver care, by encouraging more time spent on collaboration and services that may not be traditionally covered under Medicare and Medicaid fee-for-service (FFS).

2 SAMHSA defines recovery as “a process of change through which individuals improve their health and wellness, live a self-directed life, and strive to reach their full potential.” https://store.samhsa.gov/sites/default/files/d7/priv/pep12-recdef.pdf https://www.ecfr.gov/current/title-42/chapter-I/subchapter-A/part-2 https://www.ecfr.gov/current/title-42/chapter-I/subchapter-A/part-2 https://store.samhsa.gov/sites/default/files/d7/priv/pep12-recdef.pdf

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A3.1 How the IBH Model Addresses These Challenges Through Integrated Care and VBP The challenges described above demonstrate that there is a need for a broader, federally coordinated effort to advance BH and PH care integration, improve the quality of care, and test innovative payment models within Medicare and Medicaid to achieve better, improved outcomes for beneficiaries with BH needs and reduce program expenditures.

Value-based care, where providers are paid based on patient outcomes, has the potential to reduce health care spending and improve overall health. However, specialty BH providers have had limited opportunities to participate in VBP models. The IBH Model will address these challenges by providing a VBP model for specialty BH organizations and settings to deliver preventive care.

Integrated care improves access to general health care by fostering better communication, alignment, and collaboration among providers caring for individuals with complex BH and co-occurring priority health conditions. Members of a care team collaborate to establish a comprehensive treatment plan addressing the person's biological, psychological, and other needs that impact health. For many individuals with moderate to severe BH (MSBH) needs and co-occurring PH conditions, the BH setting may be the setting in which they are most actively engaged to receive needed care.

Significant progress has been made in developing various frameworks to build upon and advance integrated care(30-33), but the barriers described in Section A3 Background persist. The IBH Model will help minimize the barriers to high quality integrated care as exhibited in Table A.1.

Table A.1: IBH Model care delivery solutions for barriers to integrated care

Barriers to Care IBH Care Delivery Solutions

1. Poor Clinical Outcomes: People often face barriers to having their PH needs identified in BH settings. This is due in part to a lack of:

provider knowledge, support, and training related to PH screening needs; patient knowledge regarding PH screening needs;

clarity regarding provider responsibility and accountability for screening for PH conditions;

as well as insufficient resources and time during visits to facilitate screening and associated referrals.(34, 35)

The care delivery framework will prioritize specialty BH practices as the entry points for integrated, value-based care. Interprofessional care teams will provide screening, assessment, treatment, and referral for PH and BH needs with ongoing care management and individual-level interventions to address beneficiary issues that interfere with diagnosis, management, and treatment of health conditions, such as food, housing, and transportation needs.

2. Increased Expenditures: BH and PH services and providers are often siloed, and people are not connected with the range of health services they need. This fragmentation can be especially difficult for people with BH diagnoses and results in underutilization of primary care, lack of access to specialty PH care, and the overuse of emergency department and inpatient medical care.

Interprofessional care teams will collaborate to establish a comprehensive treatment plan addressing the person's biological, psychological, and other needs that impact health, improving access to PH care by fostering better communication, alignment, and collaboration among providers caring for individuals with complex BH and co-occurring chronic conditions. The Model will also support the development of care pathways and protocols to ensure that people are connected with needed PH care when a need is identified.

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Barriers to Care IBH Care Delivery Solutions

3. System Challenges: Broader health system lacks capacity to address needs that impact health. Individuals with BH conditions have increased rates of poverty, limited access to healthy food choices, and unsafe living conditions, which have been shown to exacerbate PH comorbidities.(8)

The IBH Model will require needs that impact health are screened and referred using a validated screening tool, such as the Accountable Health Communities (AHC) screening tool and ensure that providers consider other needs that impact health within their treatment plans.

4. Health IT Barriers: Limited investment opportunities for specialty BH providers. Many specialty BH providers were not eligible for the EHR adoption financial incentives that were provided to other categories of providers as part of the Health Information Technology for Economic and Clinical Health Act (HITECH) Act enacted in 2009, further exacerbating low uptake rates.(23)

The IBH Model will provide specialty BH practices and SMAs infrastructure and cooperative agreement funding and technical assistance necessary for them to effectively adopt and implement health IT tools and to participate in local, regional, or state information sharing systems.

5. Lack of Payment Innovation: Payment innovation has not focused on specialty BH practices. Specialty BH practices often lack a clearly defined role in VBP models, leaving them with limited opportunities to meaningfully participate in APMs.

The IBH Model will provide an on-ramp to value-based payment by providing support for necessary infrastructure and health IT funding, preparing these providers to participate in VBP models. The IBH VBP model will align Medicare and Medicaid to enhance multi-payer alignment.

6. Preventive Care and Health Promotion in BH: Differences in access to and quality of care, use of care, and comprehensiveness of insurance coverage are persistent in BH care.

Limited access can be rooted in historical exclusion from social and economic opportunities that result in barriers to care and unequal treatment over time.

Practice Participants will engage in activities that improve health for all beneficiaries, including conducting a population health needs assessment and identifying beneficiary issues that interfere with diagnosis, management, and treatment of health conditions, such as food, housing, and transportation needs. Practice Participants will develop plans to address needs identified in the population health needs assessment through enhanced care coordination or closed-loop referrals to community-based organizations.

A3.2 Alignment with Federal Priorities and State Medicaid Program Trends and Themes The IBH Model is aligned with the BH priorities set by CMS and the Department of Health and Human Services (HHS) in the September 2022 HHS Roadmap for Behavioral Health Integration.

The IBH Model will support these priorities by:

• Reducing silos across programs and settings; and

• Ensuring that “the full spectrum of BH care will be integrated into health care, social service, and early childhood systems to ensure all people have equitable access to evidence-based culturally appropriate, person-centered care.”(36)

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In addition, the IBH Model is designed to harness state interest and capacity-building in BH and build directly on this architecture, where appropriate. Specific examples that may support the IBH Model include:

• States have been the early innovators in designing and operationalizing VBP efforts among specialty BH practices through various Medicaid innovation initiatives including but not limited to waivers, demonstration programs, and grants.(37)

• Approximately eight states are utilizing flexibilities under Section 1115 of the Social Security Act to cover services for needs that impact health that would otherwise not be available for federal match, including services such as housing and housing supports, transportation assistance, and nutritional services.

• Over twenty states noted initiatives in their American Rescue Plan Act of 2021 Section 9817 State Spending Plans related to mental health, substance use disorder treatment, and initiatives focused on needs that impact health.

• States have also undertaken the Certified Community Behavioral Health Clinic (CCBHC) demonstration, the Promoting Integration of Primary and Behavioral Health Care (PIPBHC) program, and the Medicaid State Plan option to provide coordinated care through the establishment of Health Homes3 for individuals with chronic conditions (see Section 1945 of the Social Security Act) to improve access to BH care, improve statewide BH crisis systems and develop comprehensive approaches to PH and other needs that impact health.(38-40) As of December 2023, 20 states support 35 health home models to support care coordination for patients with complex needs, including those with BH conditions.

A4. Program Requirements Below are the core functions Recipients are required to complete in the Pre-Implementation and Implementation Periods of the IBH Model, with associated examples of cooperative agreement funding use.4 Recipients may fulfill these requirements themselves and may also work with managed care entities or other state entities like agencies with regulatory authority over mental health and/or substance use disorder providers to ensure these tasks are completed. Of note, the funding provided pursuant to the Cooperative Agreement may not be claimed for Federal financial participation (FFP) purposes.

Recipients also have reporting and evaluation requirements throughout the period of performance as detailed in Section F6. Reporting.

Recipients must detail their potential plans to operationalize the core functions as part of their application as further described in Section D2.4.1 Project Narrative.

A4.1 Model Structure Overview The IBH Model will focus on state-based innovation, led by the state Medicaid agency (SMA) as the Recipient, to test a care delivery framework where the BH setting is the facilitator of integrated care. Specialty BH practices and settings (see Section A4.1.1 Definitions) within the selected states

3 https://www.medicaid.gov/resources-for-states/medicaid-state-technical-assistance/health-home-information-resource-center/index.html 4 This is not an exhaustive list of requirements or cooperative agreement funding use.

https://www.medicaid.gov/resources-for-states/medicaid-state-technical-assistance/health-home-information-resource-center/index.html https://www.medicaid.gov/resources-for-states/medicaid-state-technical-assistance/health-home-information-resource-center/index.html

10/16/2025 Page 13 of 139 will be the Practice Participants and entry points for adult Medicaid, Medicare, and dually eligible beneficiaries to receive integrated care.

Recipients of this award will develop a Medicaid Payment Approach that includes a Medicaid performance-based payment (PBP). The Medicaid Payment Approach shall align with the Integration Support Payment (ISP) and Medicare PBP developed by CMS (further details available in Appendix VI Medicare Payment Approach Details). The Medicaid Payment Approach will be implemented in parallel to the Medicare Payment Approach for eligible Practice Participants within the selected states. Recipients can operate the IBH Model across their state or in a specified sub-state area.

CMS will award, through a competitive process, cooperative agreements to up to five successful Cohort II Recipients. During the two-year Pre-Implementation Period, Recipients will be required to undertake several readiness and technical assistance activities to support Practice Participants and develop their Medicaid Payment Approach in partnership with CMS. The Pre-Implementation Period is designed to help Recipients:

• identify and recruit Practice Participants alongside relevant partners (Such as MCOs or state mental health authorities and/or single state agencies for SUDs;

• support their Practice Participants in developing the needed infrastructure and technical expertise to implement the care delivery framework;

• meet data reporting requirements; and

• establish a Medicaid Payment Approach, in partnership with CMS, to support the care delivery framework.

Figure 4.1.3: IBH Model Structure

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A4.1.1 Model Definitions and Components IBH Model Definitions Infrastructure Funding Payments made by Recipients to Practice Participants to support and fund investments in certified health IT products and infrastructure improvements for their practice and patient population, including (1) improving data infrastructure; (2) establishing quality goals; (3) supporting data collection efforts to advance toward accountable care and the development of a plan to address needs specified in the population health needs assessment; and (4) support practice transformation activities.

Integration The coordination (and as appropriate, provision) of PH care5 by the BH care team and in the BH setting, along with attention to needs that impact health and appropriately matched BH interventions. Integration in the IBH Model is a person-centered approach to identify and address (as appropriate within scope of practice) PH in the BH setting in which the person with moderate to severe BH conditions may be already or more frequently engaged to supporting preventive care and health promotion. This care may be co-located or virtual.

Moderate to Severe Mental Health Conditions and/or Substance Use Disorders (SUD)

The specific BH diagnoses defined by CMS, in consultation with clinical subject matter experts from SAMHSA, as “moderate to severe” are listed in Appendix IX.

Physical Health (PH) Consultant A PH provider who specializes in the diagnosis, evaluation, and therapeutic management of PH conditions and is qualified to prescribe medication (physician, nurse practitioner, etc.). The PH Consultant participates in regular review of the clinical status of beneficiaries receiving IBH services and advises the billing practitioner and care management team about screening and follow-up for positive screens, PH diagnosis, treatment initiation, care options, monitoring for complications of PH conditions, and options for resolving issues with beneficiary adherence and tolerance of PH treatment with a culturally informed and person-centered approach. The PH Consultant also advises on managing any negative interactions between beneficiaries' PH and BH treatments and other needs that impact health and offers a referral for direct provision of primary care when clinically indicated and suggests specialty care options as needed. The PH Consultant could be an in-house provider working at a specialty BH practice or could be an outside provider who contracts with a specialty BH practice.

5 Physical health care includes care and services for non-behavioral health conditions (i.e., mental health and SUDs) and is inclusive of oral health.

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IBH Model Definitions Physical Health (PH) Providers Physicians and non-physician practitioners whose primary area of practice involves the diagnosis, evaluation, and therapeutic management of non-BH conditions.

Primary Care Primary care is the provision of preventive and integrated health care by interprofessional teams that are accountable for addressing the majority of an individual's health and wellness needs across settings and through sustained relationships with patients, families, and communities.

Specialty BH Organizations and Settings

A health care provider, practice, facility, or other community-based organization delivering BH treatment services outside of an inpatient, emergent, or urgent care level of care where BH services are available to beneficiaries and are the predominate health care service type delivered, or where longitudinal BH services are available and delivered by a specialty BH provider.

This includes local health departments, or another entity that is part of a local government behavioral health authority where a locality, county, region, or state maintains authority to oversee behavioral health services at the local level and uses the entity to provide those services. This longitudinal accountable BH care arrangement involves a Practice Participant who agrees to be accountable for quality, utilization, patient experience, and care integration over a sustained period.

Specialty Behavioral Health (“BH”) Providers

Specialty BH providers refers to physicians, non-physician practitioners, and other eligible professionals whose primary area of practice involves the diagnosis, evaluation, and therapeutic management of mental health and SUD conditions, as permitted under federal and state law. Specialty BH providers must be eligible to bill for services (i.e., be billing practitioners) and may include physicians (medical doctors or doctors of osteopathy), clinical psychologists, clinical social workers, clinical nurse specialists, nurse practitioners, physician assistants, independently practicing psychologists, marriage and family therapists, and mental health counselors as specified in the CY2024 Physician Fee Schedule final rule.

IBH Model Components

Care Delivery Framework An Integration framework for adult Medicaid and Medicare beneficiaries with MSBH implemented for Practice Participants statewide or within a sub-state region.

Commercial payer participation Recipients are encouraged to use existing relationships with commercial payers to further strengthen payer alignment efforts in their states.

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IBH Model Components

Medicaid participation Practice Participants that currently serve (or will serve) Medicaid beneficiaries and/or are currently billing Medicaid in participating states by the start of model year MY1 (BP1).

Practice Participants must at minimum participate in their state's Medicaid Payment Approach to participate in the IBH Model. Practices that participate in the Medicaid Payment Approach may be eligible to participate in the Medicare Payment Approach. State agreements with Practice Participants will follow existing state protocols for Medicaid participation.

Recipients will lead the design of the Medicaid Payment Approach and care delivery framework and provide technical assistance and programmatic support to Practice Participants.

Medicare participation Practice Participants that participate in their state's Medicaid Payment Approach and are accepted to participate in the Medicare Payment Approach. Practice Participants will enter into separate participation agreements with CMS that govern the Medicare Payment Approach. Providers that do not participate in the Medicaid Payment Approach cannot participate in the Medicare Payment Approach.

Multi-Payer Approach The IBH Model is focused on multi-payer alignment. Multi-payer alignment is critical to achieving model success because it streamlines care delivery efforts and payment for IBH Practice Participants across their patients and lines of business. The IBH multi-payer approach consists of the following principles:

• Directional alignment: CMS will work with Recipients to closely align on areas of the Model that directly reduce provider burden and are important to model aims and evaluation of outcomes, such as quality measurement, the type and format of data provided, and learning priorities. CMS will not require Recipients to build identical payment arrangements to other Recipients and/or to what is proposed in the Medicare ISP and PBP.

Directional alignment is detailed further in Section A4.4.4: Multi-Payer Alignment.

• Medicaid Flexibility: Recipients may customize certain model elements, such as Medicaid payment systems and care delivery, while remaining directionally aligned with IBH's Medicare Payment Approach. Specifically, CMS will require Recipients to move Practice Participants away from traditional Medicaid FFS payment, but Recipients will have flexibility to choose what type of non-FFS Medicaid payment to implement. (See Sections A4.4 IBH Payment Strategy and A4.3 IBH Care Delivery Framework for specific areas of flexibility.)

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IBH Model Components

Practice Participation Eligible specialty BH organizations and settings (“Practice Participants”) may elect to participate by delivering the IBH care delivery framework (A.4.3 IBH Care Delivery Framework) and, in exchange, receive payment for their eligible beneficiaries (defined further in Section A4.2.1 Eligible Practice Participants). Practice Participants may also be eligible to receive specific funding to procure necessary health IT upgrades such as adopting EHRs.

SMA Participation Recipients (SMAs) receive cooperative agreement funding in both the Pre-Implementation and Implementation Periods to support the development of key model activities, including, but not limited to, the Medicaid Payment Approach, care delivery framework, and key data sharing and infrastructure activities.

This section displays the Recipient cooperative agreement requirements for the pre-implementation and implementation periods. Table A.4.1.2 exhibits a summary of each requirement and where further details can be found.

Table A.4.1.2: Cooperative agreement requirements – at a glance:

Requirement Description Relevant Section Recruit IBH Practice Participants

The Recipient will be required to work with relevant parties to recruit eligible BH Practice Participants to the IBH Model

A4.2 Recruit Practice Participants

Design and implement the IBH care delivery framework

The Recipient will collaborate with CMS, Practice Participants, and relevant parties to design and implement the IBH care delivery framework

A4.3 IBH Care Delivery Framework

Design and implement the IBH Medicaid payment arrangement

The Recipient will design, establish, and implement the IBH Medicaid Payment Approach in partnership with

CMS

A4.4 IBH Payment Strategy

Distribute cooperative agreement funding, including Infrastructure Funding

The Recipient will distribute cooperative agreement funding (including Infrastructure Funding) to help achieve model goals

A4.5 Infrastructure Development and Funding Distribution

Participate in the convening structure

The Recipient will aid in identifying and implementing a convening of relevant IBH parties

A4.6 Convening Structure

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Requirement Description Relevant Section Participate in model data, quality, and evaluation efforts

The Recipient will enable the continuous flow of IBH Model data, including through quarterly measure submission and technical assistance to Practice Participants

A4.7 Data, Quality, and Evaluation

A4.2 Recruitment of Practice Participants A4.2 Recruitment Requirements:

Pre-implementation period requirements Implementation period requirements During the pre-implementation period, Recipients must:

• Implement the BH practice recruitment strategy.

○ Identify, recruit, and enroll eligible BH

Practice Participants.

• Secure a letter of intent from at least one managed care organization (MCO), prepaid inpatient health plans (PIHPs), or prepaid ambulatory health plans (PAHPs) (where applicable) to participate in the IBH Model.

• Secure a letter of intent from the State Mental Health authorities and/or Single state agencies for SUDs.

During the implementation period, Recipients must:

• Enroll and retain BH Practice Participants.

• Continue to recruit Practice Participants through the end of MY3 (BP3).

Recipients are required to solicit interest and recruit Practice Participants into the IBH Model who meet the eligibility criteria detailed below in Section A4.2.1 Eligible Practice Participants and must submit a practice recruitment strategy with their application. CMS encourages Recipients to include State Mental Health Authorities and/or Single State Agencies for SUDs, and managed care organizations, risk-based prepaid inpatient health plans (PIHPs), risk-based prepaid ambulatory health plans (PAHPs)6 , or other intermediaries in developing the practice recruitment strategy given their knowledge of existing practice networks. The practice recruitment strategy shall include:

a. A plan for recruiting Practice Participants into the IBH Model, including key partners and how they may support recruitment activities.

b. Plans to include outreach with rural, safety-net specialty BH providers, under-resourced providers, tribal providers, and providers serving vulnerable populations in the recruitment strategy.

c. An estimated number of Practice Participants enrolled in the IBH Model by the end of

MY3 (BP3).

d. An estimated number of total Medicaid enrollees with MSBH conditions to be attributed to the IBH Model for the entire duration of the Implementation Period.

6 All references to PIHPs and PAHPs refer to risk based PIHPs and PAHPs

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Recipients may begin enrolling practices starting in MY1 (BP1). Recipients (or their fiscal intermediaries) are required to have Practice Participants recruited into the IBH Model by the start of MY2 (BP2) and may continue recruiting Practice Participants through the end of MY3 (BP3).

In addition to recruiting Practice Participants, the Recipient must secure a letter of intent (LOI) from at least one MCO, PIHP, or PAHP, if the Recipient's BH network is managed through an MCO, PIHP, or PAHP, at the time of submitting this application. The Recipient must also secure a letter of intent from their State Mental Health Authorities and/or Single State Agency for SUDs.

CMS will work with participating state Medicaid agencies to determine the pathway for implementing the Medicaid payment arrangement, including any state plan amendments, waivers (including but not limited to Medicaid section 1115(a) authority, 1915 authority), or Medicaid managed care contract modifications that may need to be approved.

A4.2.1 Eligible Practice Participants Within the Recipient's proposed geographical service area, specialty BH organizations and settings will be eligible Practice Participants who, at the time of application, meet all the following criteria:

• Have at least one BH provider that is an employee, leased employee, or independent contractor of the practice and:

1) Is licensed by the state to deliver BH treatment services; an

2) Meet any state-specific Medicaid provider enrollment requirements and is eligible for

Medicaid reimbursement.

• Meet all state-specific requirements to deliver BH services, if applicable;

• Serve adult Medicaid beneficiaries (age 18 or older) with moderate to severe BH conditions; and

• Provide MH and/or SUD treatment services at the outpatient (OP) level of care. This does not include the intensive outpatient (IOP) level of care.

Practices that provide only case management7 or only recovery services or do not provide direct delivery of diagnostic or treatment of BH services are not eligible to be Practice Participants.

Inpatient and post-acute care settings are not eligible to participate in the IBH Model. Post-acute care includes, but may not be limited to, home health agencies, skilled nursing facilities, inpatient rehabilitation facilities, and long-term care hospitals. The IBH Model has adopted this policy to assure program integrity and avoid duplicate services and payments with inpatient and post-acute care prospective payment systems and value-based purchasing programs.

Examples of eligible Practice Participants may include but are not limited to:

• Community Mental Health Centers (CMHCs);

• Rural Health Clinics (RHCs) that provide specialty BH care services;8

• Federally Qualified Health Centers (FQHCs) that are dually-certified as a BH provider

• Critical Access Hospital (CAH) outpatient BH clinics;

• Independent health care providers with and without clinic affiliations;

7 The Social Security Act, § 1915(g)(2), defines case management services as those assisting individuals eligible under the State plan in gaining access to needed medical, social, educational, and other services. Case management services do not include the direct delivery of an underlying medical, educational, social, or other service for which an eligible individual has been referred.

8 Additional information regarding RHC eligibility requirements will be released in future guidance materials.

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• Certified Community Behavioral Health Clinics (CCBHCs);

• Opioid Treatment Programs (OTP);

• Private specialty clinics with and without medical center affiliations.

• Specialty substance use disorder provider organizations;

• Tribal health organizations and clinics; and

• Local and territorial health departments and governments or other entity that is part of a local government BH authority where a locality, county, region, or state maintains authority to oversee BH services at the local level and uses the entity to provide those services.

Practice Participants will be identified using a combination of their tax identification number (TIN) and national provider identifier (NPI), cross-referenced through the required provision of Medicaid provider identification numbers.

To be eligible to participate in the model, when the state recruits a practice to participate, that practice must serve, at the outpatient level of care, at least 25 Medicaid MSBH beneficiaries on average per month. As outlined in Section A4.2.2 Eligible Beneficiaries all adults served by the eligible Practice Participant are eligible to receive model services where medically necessary and appropriate regardless of diagnostic status. CMS anticipates each state will include approximately 10,000 Medicaid beneficiaries with MSBH conditions throughout the course of the Model. To reduce practice burden and ensure an equitable continuity of services, states are encouraged to require Practice Participants to treat all Medicaid beneficiaries with BH needs through the IBH care delivery framework, where the services are deemed reasonable and medically necessary.

The specific BH diagnoses defined by CMS, in consultation with clinical subject matter experts from SAMHSA, as “moderate to severe” are listed in Appendix IX .9 CMS reserves the right to consider changes should diagnoses need to be added or removed from the list of MSBH diagnoses.

CMS will communicate any changes to Recipients with advance notice. Recipients will work with their Practice Participants, State Mental Health authorities and Single state agencies for SUDs and partnering MCO (or other fiscal intermediary) to develop a process to verify that practices serve the minimum number of Medicaid MSBH beneficiaries, no less than annually. Additionally, Recipients will make their Practice Participant Lists available to CMS as part of their model reporting requirements detailed in Section F6.3 Performance Milestones.

The Practice Participant eligibility criteria will be the basic framework that Recipients will be required to use to identify eligible Medicaid Practice Participants. Recipients and their applicable subrecipients (such as MCOs, PIHPs, or PAHPs) may not apply further limiting eligibility criteria in addition to the criteria laid out by CMS, except for limiting eligibility by sub-state region as allowable and identified in its application.

Medicaid Practice Participants will also be eligible to participate in the Medicare Payment approach of the Model, assuming they are enrolled as fee-for-service Medicare providers and are in good standing,10 and meet the IBH Practice Participant criteria. Practice Participants will not be allowed to participate in the Model as Medicare-only providers, but Practice Participants may choose to participate only in the Medicaid payment arrangement. Ideally, all IBH Model Practice

9 The IBH Model's “moderate to severe” behavioral health conditions are not to be confused with SUD mild, moderate, or severe classifications that are based on the number of diagnostic criteria that are fulfilled. Thus, in this NOFO, "moderate to severe" does not refer to those specific SUD classifications.

10 Good standing means able to bill Medicare, Medicare Provider Enrollment, Chain, and Ownership System (PECOS) is up to date, and provider does not have any outstanding fraud and abuse litigation.

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Participants will participate in both Medicaid and Medicare to bolster multi-payer alignment. Any IBH Medicaid Practice participant unable to have payments withheld will be required to also participate in the Medicare Payment Approach, where applicable. CMS will review this on a case-by-case basis. Please see Appendix VI for more details on this requirement.

A4.2.2 Eligible Beneficiaries All adult Medicare and/or Medicaid beneficiaries receiving care from eligible Practice Participants will be eligible for the Model, regardless of their specific BH diagnoses, if the services are deemed…