Evidence-based models of integrated behavioral and physical health care improve outcomes and are cost-effective—in primary care settings for individuals with mild to moderate conditions, and in community-based settings for those with more serious illness. States are implementing multi-pronged integration strategies tailored to varying levels of illness acuity and complexity, spurred by increased rates of mental illness and suicide, the high prevalence of overdose deaths, and long-established mortality gap for individuals with serious mental illness.
A NASHP scan of Medicaid managed care contracts found that state efforts to leverage Medicaid managed care to improve integration of behavioral and physical health were both broad and deep.
Detailed data, as well as maps summarizing the data can be found here. The appendix provides information on the analysis approach.
All 43 Study States Leveraged Care Coordination Requirements to Foster Behavioral Health Integration
In our scan, we found that all 43 study states (42 states and Washington DC) specified care coordination requirements in both MCO and BHO contracts. All states addressed behavioral and physical health coordination or integration in those specifications.
Most states prioritized requirements for care coordination systems for people with complex needs—holding health plans accountable for designing and implementing a care coordination system that meets the criteria specified in the contract, including the criteria designed to better coordinate or integrate behavioral health. However, a few states, such as Louisiana, charged primary care providers with coordinating physical and behavioral health services. This state’s contract requires MCOs to hold primary care providers (PCPs) responsible for, “Managing and coordinating the medical and behavioral health care needs of Enrollees…”.
Thirty-three states fostered the use of health care models that incorporate integrated or coordinated care as part of the delivery model, such as health homes, the collaborative care model, and certified community behavioral health clinics (CCBHCs). For example, Kansas care coordination requirements specify for adults with behavioral health needs, children with serious emotional disturbance, and youth in foster care with behavioral health needs who are not receiving services from a CCBHC that the MCO “shall connect the Member with a CCBHC and conduct follow up as needed to ensure the Member is receiving needed services.”
Finally, 31 states included contract provisions to ensure the physical and behavioral health systems had structures in place to support coordination and integration. Often these included referral policies or written coordination agreements between physical and behavioral health providers. A few, such as Michigan, focused on health information technology where it requires both MCOs and BHOs to use a web-based care management system developed by the state (CareConnect360) to document a jointly created care plan for members with significant mental health issues and complex physical comorbidities.
Example: Massachusetts uses all three types of care coordination strategies
Massachusetts has programs in which MCOs deliver both physical and behavioral health and programs in which a BHO delivers only behavioral health services. The state uses all three types of strategies in its contracts. Two of its approaches to fostering integration of behavioral health and physical health are unique.
- Behavioral Health Community Partners (BH-CPs) are community-based organizations that, among other things, coordinate the care delivered to certain MCO members with significant behavioral health needs (which includes both MCOs and Partnership Accountable Care Organizations or ACO plans). All MCOs are required to sign agreements with BH-CPs, which are contracted to, and paid by, the state Medicaid agency. This agreement outlines how the MCO and BH-CP will work together to serve high-need enrollees. Contract requirements also call for MCOs to enroll at least 3 percent of their members with BH-CPs, and Partnership ACOs are required to attain “appropriate BH CP enrollment volume.” In addition, BH-CPs, MCOs, and the state’s BHO, which delivers behavioral health services to members of the state’s Primary Care Case Management (PCCM) program1, are all required to work together to coordinate care for individuals.
- The state’s BHO delivers behavioral health services to Medicaid beneficiaries enrolled in the state’s PCCM program or primary care ACOs. (Note: Primary care ACOs are built on the PCCM program.) The BHO also supports the primary care clinicians (PCCs) delivering care under these two programs. The BHO contract specifies multiple features that wrap support around PCPs, including:
- The care management program operated by the BHO identifies participants based on behavioral health, medical, and pharmacy claim data, and it accepts referrals from PCCs.
- The BHO operates the PCC Plan Management Support Services (PMSS) Program to support consistent integration of Behavioral Health, medical care, long-term services and support, and social services.
- The BHO is developing a PCC Performance Dashboard that will include clinical indicators that address medical and behavioral health integration.
All States Leveraged Quality Improvement Requirements to Foster Behavioral Health Integration
All 43 study states collected measures of plan performance that fostered coordination or integration such as Diabetes Care for People with Serious Mental Illness: Hemoglobin A1c (HbA1c) Poor Control (>9.0%). Likely due to federal reporting requirements, most states used the measures included in the adult and child core sets developed by the Center for Medicare and Medicaid Services (CMS), which are primarily measures of clinical performance. Some states also used other types of measures, such as a measure of the number of shared care plans. (See State Approaches to Behavioral Health Measures in Medicaid Managed Care for more information.)
Twenty-nine states also embedded behavioral health integration efforts into other quality improvement program requirements. The federal government requires states that use managed care undertake several quality improvement oversight activities. Twenty states leveraged those requirements to foster behavioral health integration. Fourteen states specifically required MCOs to study their integration performance. Kentucky, for example, requires MCOs to monitor and assess improvement in physical health outcomes resulting from the integration of behavioral health into the enrollee’s overall care.
Example: North Carolina uses all three types of quality provisions.
In North Carolina, most Medicaid beneficiaries, including families and people with disabilities, are enrolled into standard health plans (Standard Plans) that deliver a comprehensive package of services including both physical and some behavioral health services (Standard MCO). However, beneficiaries with serious mental illness, severe substance use disorder, intellectual/developmental disability (I/DD), or traumatic brain injury (TBI) may enroll into a tailored health plan (Tailored Plan) that delivers a comprehensive package of services for these members. These Tailored Plans include services, such as assertive community treatment and some home- and community-based (HCBS) waiver services, that standard MCOs do not offer (Tailored MCO). North Carolina uses all three types of quality provisions in both standard and tailored plan contracts.
- Measurement: All MCOs must report on a set of measures, including some that foster behavioral health and physical health coordination. These include the following:
- Diabetes Care for People with Serious Mental Illness: Hemoglobin A1c (HbA1c) Poor Control (>9.0%)
- Diabetes Screening for People with Schizophrenia or Bipolar Disorder Who Are Using Antipsychotic Medications
- Screening for Depression and Follow-Up Plan
- All MCOs must conduct clinical performance improvement projects (PIPs) on one or more of seven topics, including behavioral health integration. Standard MCOs must conduct two PIPs, and tailored MCOs must conduct one PIP.
- Contracts for both Standard and Tailored Plans, state all MCOs must “…provide quality improvement support to network providers during the initiation and implementation of the interventions for Quality and Population Health outcomes as outlined in the Quality Strategy and as otherwise specified by the Department, including… Behavioral Health integration.” In addition, the contract for tailored MCOs states that one goal of their quality management and quality improvement program is to “ promote integration among physical and BH [behavioral health] service providers and providers of LTSS [long term services and supports] and I/DD [intellectual/developmental disability] care…”.
Most States Leveraged Payment to Foster Behavioral Health Integration
Among the 43 study states, 38 states used payments to foster integration of behavioral and physical health. Of these, 31 used payments to plans, 29 used payments to providers, and 22 used both.
Of the 38 states that leveraged plan payment, 22 states offered financial rewards to high-performing health plans, often referred to as value-based purchasing. Missouri, for example, withholds 2.5 percent of capitation payments. All MCOs may earn this withhold through performance on Healthcare Effectiveness Data and Information Set (HEDIS) measures, including those that foster behavioral health integration. The specific amount of withhold earned is based on each MCO’s performance relative to the national percentiles from the national committee for quality assurance (NCQA’s) Quality Compass and improvement over baseline.
In addition, eight states imposed penalties for poor performance and two states (Maryland and Rhode Island) shared financial risk with plans to support implementation of new provider types that deliver integrated care (CCBHCs and the collaborative care model).
Example: Indiana rewards performance with incentives
Indiana operates four programs under which MCOs deliver both behavioral and physical health to groups of Medicaid beneficiaries.
- Hoosier HealthWise serves children and pregnant women.
- Hoosier Care Connect serves people under age 59 with a disability or blindness.
- Healthy Indiana Plan serves non-disabled adults.
- Indiana Pathways for Aging serves people aged 60 or over.
The contracts for three of these programs: Hoosier Healthwise, Hoosier Care Connect, and Healthy Indiana Plan, use the same two-part payment model.
- Pay for Outcomes: Under these provisions the Medicaid agency withholds a portion of the capitation payments made to MCOs and MCOs may earn that funding through performance on a set of measures. The same payment model is used in all three managed care programs. However, the measure set varies across the programs and, in 2023, only the Healthy Indiana Plan, included a performance measure that could foster integration. These MCOs can earn up to 15 percent of the total withheld amount for performance on the measure: prenatal depression screening and follow-up. The exact portion an MCO would earn varies based on performance. Specifically, if an MCO’s 2023 performance is at or above the 10th percentile of NCQA 2024 Quality Compass, the MCO will receive 50 percent of the maximum amount that could be earned for the measure; performance at or above the 25th percentile earns 75 percent of the maximum amount; and performance at or above the 50th percentile earns the maximum incentive amount.
- Undistributed Incentive Funds: Under the “Pay for Outcomes” model there is a possibility that MCOs will not earn all the withheld amount through their performance on the included measures. In that case, the Medicaid agency retains the funds, which are referred to as “undistributed incentive payment funds”. These funds may, with the approval of the Medicaid agency, be made available to an MCO to fund all or a portion of quality improvement initiatives proposed by the MCO to achieve the priorities identified in the state’s Quality Strategy Plan, including “behavioral health and physical health integration initiatives.”
The 29 states that used provider payment took a variety of approaches to support different providers. Many of these were implemented as state directed payments which enable states to require plans to pay a group of providers via a specific method or at a specific amount. The following were among the more frequently used approaches.
- Primary care: Many states fostered the delivery of behavioral health services in primary care settings. Some instructed health plans to pay PCPs for delivering behavioral health services within their scope of practice. Idaho required its BHO to develop value-based payment (VBP) models to “incentivize behavioral health providers to work within primary care settings.” MCOs in Massachusetts’ accountable care partnership program are required to administer the primary care sub-capitation program. This is a directed payment program under which primary care practices are paid a capitated rate for providing a set of services. MCOs assign participating practices to one of three tiers based on their self-attested capabilities and pay higher rates to practices in higher tiers. All tiers include capabilities meant to foster behavioral health integration such as behavioral health screening (tier 1) and “Maintain a consulting behavioral health clinician with prescribing capability” (tier 3).
- Support for integrated models: These requirements support a variety of providers that deliver integrated or coordinated care as part of their models, such as CCBHCs. States either (a) required or encouraged their plans to contract with one or more of these models or (2) specified the payment amount or model that the plan was to use to pay the provider type.
- Value based payment: These requirements incentivize a variety of primary care providers to integrate behavioral and physical health. Some of these are a general charge for health plans to establish alternative payment models (APMs) that incentivize behavioral health integration. Massachusetts’ primary care sub-capitation program is an example of a value-based payment implemented as a directed payment. Other states use directed payment to require health plans to reward other health systems, such as acute care hospitals for performance on a set of measures, including some that foster coordination and integration. Texas requires MCOs to make measurable progress on advancing APM initiatives in priority areas, including behavioral health integration.
Example: Texas leveraged contracts plan payment requirements
In Texas, MCOs deliver both physical and behavioral health services. The examples below illustrate the range of approaches that Texas has taken to using contract requirements specifying plan payment requirements to promote physical and behavioral health integration.
- APMs: Texas requires MCOs to make measurable progress on advancing APM initiatives in priority areas, including behavioral health integration.
- Pay providers of integrated models: Texas requires MCOs to contract with any willing CCBHC provider that meets credentialing standards. CCBHCs integrate primary and behavioral health services, and MCOs are to develop APM arrangements with these providers. There are also requirements related to payment of health homes, which “integrate and coordinate all primary, acute, behavioral health, and long term services and supports to treat the whole person.”
- Directed payment: Texas has five directed payment programs under which the state establishes how or how much the MCO will pay a defined group of providers. In these programs, providers can earn incentives, including reimbursement increases, through performance on a set of measures. In the state’s fiscal year 2025, four of the programs included at least one measure that fosters integration of behavioral and physical health, such as Depression Screening and Follow-up. The four types of providers that can earn incentives for performance on a measure that fosters coordination and/or integration are community mental health centers, rural health clinics, hospitals, and physician groups.
Conclusion
The breadth and depth of state efforts to better integrate behavioral and physical health clearly show strong state interest in securing the improved health outcomes and cost savings that better integration could produce. The scan found that some provisions are widely used, such as requiring health plans to address behavioral and physical health integration in their care coordination processes. However, review of the contract provisions themselves also reveals variations in the language that states have embedded into these provisions. Different language may produce different results and is worth tracking and evaluating their effectiveness.
Further, some policy interventions are currently used by few states, such as sharing financial risk with health plans to support implementation of a new provider type that delivers integrated care or requiring MCOs and BHOs to meaningfully use a web-based platform in care coordination. Given the widespread and varied efforts to improve behavioral health integration, state officials may want to use this information to exchange implementation experience to optimize their investments.
For any questions or comments regarding this information, please contact Sandra Wilkniss.
Acknowledgments
The author thanks the NASHP staff who contributed to this brief. NASHP wishes to thank the state officials who reviewed a draft of this brief, as well as officials at the Health Resources and Services Administration for their review.
This project is supported by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) under grant number UD3OA22891, National Organizations of State and Local Officials. This information or content and conclusions are those of the author and should not be construed as the official position or policy of, nor should any endorsements be inferred by, HRSA, HHS, or the U.S. government.
i This report uses the term BHO to refer to managed care contractors that deliver only behavioral health services. These are classified by the federal government as either prepaid inpatient health plans (PIHPs) or prepaid ambulatory health plans (PAHPs). See: https://www.medicaid.gov/medicaid/managed-care/managed-care-entities/index.html for more complete definitions.
Appendix: ANALYSIS APPROACH
Care Coordination Analysis Approach: We examined managed care contracts to identify contract language intended to establish care coordination requirements to foster integration of physical and behavioral health services. We included contract language that specifically mentioned physical and behavioral health coordination or integration alone or in combination with other types of services, such as long-term services and supports (LTSS). Relevant requirements were in place at three different potential points of coordination.
- Individual: Ensuring that the services delivered to an individual are coordinated/integrated. Most often this was done through formal care management requirements but sometimes states also charged primary care providers with coordinating physical and behavioral health services.
- System: Ensuring that the physical and behavioral health systems had structures in place to support coordination/integration, such as referral policies, written coordination agreements, or supportive health information technology (e.g., shared care plan platforms).
- Providers: Fostering the use of providers that deliver integrated or coordinated care as part of their model, such as health homes, the collaborative care model, and certified community behavioral health clinics.
Quality Assurance Analysis Approach: We examined managed care contracts to identify whether each state was using any of three approaches for quality program requirements that foster coordination and integration of behavioral health services.
- Measure performance: States collected and used measures of plan performance that fostered coordination or integration. Most states used the measures included in the adult and child core sets developed by CMS. The measures in these sets are primarily measures of clinical performance, often drawn from the Healthcare Effectiveness Data and Information Set (HEDIS), such as: Diabetes Care for People with Serious Mental Illness: Hemoglobin A1c (HbA1c) Poor Control (>9.0%). Some states also created metrics such as the number of shared care plans.
- Quality improvement: All states maintain a quality strategy for their programs and require health plans to develop and implement quality assurance/improvement plans. We examined the managed care contracts to see if the states included requirements that would ensure that these plans (metric of quality, population health, and quality strategy) address coordination or integration of physical and behavioral health.
- Study performance: All states require health plans to conduct performance improvement projects to improve the quality of care delivered to their members and some require other types of clinical studies or evaluations. We examined these contract requirements to identify any project or studies addressing coordination or integration of physical and behavioral health, either as a required study or as part of a menu of study topics from which a plan could choose.
Payment Analysis approach: We examined managed care contracts to determine whether the state used payment to foster coordination or integration of physical and behavioral health services. We searched for two types of payment.
- Plan payment: We examined contract language that specified how and how much each state paid plans (including financial penalties). We included in our analysis any language that appeared to be intended to foster coordination/integration of physical and behavioral health.
- Provider payment: We examined contract language to identify any requirements related to provider payment that appeared to be intended to foster the integration of physical and behavioral health.
