Centers For Medicare And Medicais Services Selects Michigan To Participate In Innovation In Behavioral Health Model

By: Rolf Lowe, Wachler & Associates, P.C.
1/14/2025

On December 18, 2024, the Center for Medicare and Medicaid Services (CMS), announced that Michigan, along with New York, Oklahoma and South Carolina were selected to participate in the Innovation in Behavioral Health (IBH) Model. The IBH Model is another step forward by CMS in integrating health care services and improving outcomes for Medicare and Medicaid beneficiaries. The IBH Model was announced in January of 2024 with CMS providing funding opportunities for state Medicaid agencies willing to participate in the IBH Model. The Implementation of the IBH Model started on January 1, 2025, and is scheduled to be in effect for 8 years.

The IBH Model in Michigan is being implemented in designated sub-state geographic service areas. The provider participants in the in the IBH Model are specialty behavioral practices, community mental health centers, opioid treatment programs and public or private practices where individuals can receive outpatient mental health or Substance Use Disorder (SUD) services or both. The IBH Model refers to the providers as practice participants. The Michigan Department of Health and Human Services (MDHHS) intends to implement the IBH Model in both urban and rural areas. Providers being selected to become practice participants in the IBH Model are those that are already participating in the Certified Community Health Clinic demonstration, or identified as a designated Health Home. CMS is also expecting the selected states to partner with at least one Medicaid managed care organization (MCO) or another intermediary partner to develop and implement the IBH model in their respective states.

When announcing the IBH Model CMS identified that data shows Medicaid and Medicare populations experience disproportionately high rates of behavioral health and substance use disorders. As a result, both populations experience more frequent visits to emergency rooms, increased hospitalization and often have poor health outcomes and premature death. In addition, behavioral health providers face significant barriers to delivering care because of a lack of resources and a health care system that has not succeeded in integrating physical and behavioral health care. The IBH Model is designed to help practice participants improve access to health care and promote high quality integrated-health care.

In the IBH Model practice participants are responsible for screening and assessing patients for physical and behavioral health needs, as well as other health-related social needs and providing close looped referrals to other primary care providers, specialists and community-based resources. The approach uses the behavioral health setting as the point of entry and uses it to advance the needs of the beneficiaries, while monitoring their ongoing conditions. The IBH Model identifies care integration, care management, health equity and health information technology as the four key components to reach the goals of improved patient care and outcomes.

The first 3 years of the demonstration are the pre-implementation period, and the selected states and practice participants will receive funding during this period to develop the IBH Model and build capacity. In year 4, states are expected to have a Medicaid Payment Approach in place that will support practice participants in implanting the IBH Model. Practice participants in each state who serve Medicare patients and patients who are covered by both Medicare and Medicaid,often referred to as  dual eligible, may participate in the additional Medicare Payment Approach and will receive a per-person-per-month payment (PPPM) from CMS to support their implementation of the care delivery framework. The PPPM payment will also be supplemented with additional performance-based payments through the implementation period (model years 4-8). This approach is intended to prepare practice participants for advanced payment approaches and accountable care payment arrangements that may be implemented down the road.

While the IHB Model is in the early phases of development, Michigan does already have some experience in this area with the Dual Eligible Financial Demonstration that was started nearly a decade ago. The approach being taken by CMS with this most recent project suggests that CMS is considering contracting directly with providers to make the PPPM payments. Providers involved in these payments will have to assess both their direct and indirect costs associated with providing the care necessary, and their ability to meet or exceed the expectations that will be a part of the performance-based payment approach, as well as the confines of the regulatory environment that already applies to their operations.    For additional information on the IBH Model, or assistance, please contact Rolf Lowe of Wachler & Associates at (248) 544-0888 or rlowe@wachler.com.