Strategy: As part of the state’s shift toward value-based care, Massachusetts Medicaid (MassHealth) introduced a new Primary Care Sub-Capitation Program for providers participating in MassHealth’s accountable care organizations (ACOs) in 2023. The program aims to incentivize increased team-based, integrated primary care through a tiered payment structure that helps primary care providers enhance their care delivery within a predictable revenue environment. Tiered payments include increasingly more integrated behavioral health interventions as described below.
Findings: Of practices that participated continuously in MassHealth’s Primary Care Sub-Capitation Program between 2023 and 2025, 201 practices (20 percent) moved to a higher tier level, indicating increasingly greater access to needed behavioral health services in those practices. By embedding these services within primary care, the program helps patients access behavioral health treatment earlier — and closer to where they already receive care. Future analyses will focus on patient outcomes.
Massachusetts' Approach
Policy lever used: Tiered, enhanced payment model tied to increasingly more integrated behavioral health interventions.
Care setting: MassHealth accountable care organization (ACO) primary care practices
Model: The minimum care delivery standards for behavioral health integration tied to each tier include:
- Tier 1: Entry-level integrated primary care with screening, bidirectional behavioral health referral, and core care coordination capacity.
- Tier 2: Strengthened primary care-behavioral health integration, including on-site consultation, after-hours access, and enhanced substance use disorder treatment capacity.
- Tier 3: Highest-level integration tier with behavioral health clinicians, enhanced care teams, and next-day medications for opioid use disorder capability.
Payment strategy: Practices receive a tiered enhanced payment within a prospective, per-member, per-month payment for each Medicaid member attributed to the practice panel. Tiered payments vary by both clinical tier and adult versus pediatric members, where pediatric members receive higher rates than adults, with the payment gap tripling at the highest clinical level. Learn more about the rates and methodology on the MassHealth website.
Advancing Coverage and Delivery of Annual Mental Health Wellness Exams
The state is pursuing two distinct approaches to strengthen behavioral health in primary care: the sub-capitation program and the state’s annual mental health wellness exam mandate. While implemented separately, both strategies are aligned in expanding access to early intervention and treatment. Under a new state requirement, commercial insurers must now cover annual mental health wellness exams — an option also available and billable under MassHealth. These exams, which can be performed by primary care providers or at mental health centers, represent a major advancement in the state’s early identification and response system.
Within the sub-capacitation tier program, the delivery of these exams can be operationalized in different ways. Providers in the top tier typically have on-site behavioral health staffing, who may conduct and bill for these annual mental health exams screenings during a routine visit. In contrast, providers who do not have on-site behavioral health staff may use standardized screenings to identify needs and subsequently refer patients to external specialists. By integrating these approaches into routine care, Massachusetts is strengthening its system for addressing mental health needs.
Lessons Learned
Massachusetts’ experience demonstrates that reinforcing practice infrastructure and targeting payment to desired care integration interventions yields advances in integrated care delivery.
Lessons include:
- Provides stable upfront funding to strengthen care delivery: Massachusetts shifted away from fee-for-service to capitated payments to supply practices with predictable revenue to invest in staffing, systems, and integrated behavioral health services.
- Implements a tiered participation model to align participation with practice capacity and readiness: Offering multiple tiers enabled practices to enter the program at varying levels of readiness and operational sophistication, supporting a more gradual transition and accommodating differences in infrastructure, staffing, and care delivery capacity.
- Administers continuous technical support during transition: Recognizing that many practices were new to capitation, Medicaid and managed care partners provide ongoing technical assistance and operational support to help practices move from fee-for-service to the new payment model.
- Phase changes gradually in a multi-payer system: As most practices still receive fee-for-service payments from other payers, alignment across payers is crucial to supporting long-term primary care transformation and provider engagement.
Current Status and Next Steps
Effective January 1, 2026, MassHealth updated the Primary Care Sub-Capitation tier requirements based on partner feedback. One update clarifies that behavioral health clinicians that consult in primary care settings may also maintain other clinical appointments, recognizing the significant behavioral health workforce shortages in Massachusetts. These updates are intended to strengthen the primary care delivery system while reflecting operational realities as MassHealth continues to work with ACOs, providers, and other partners to advance this approach.
Acknowledgments
The author thanks Sabrina Werts, Harrison Mintz, and Liz Bosworth at MassHealth for their contributions to the innovation series. This publication was made possible through the support of West Health and its strategic partnership dedicated to advancing Behavioral Health Integration.
