Innovation in Behavioral Health (IBH)

The Centers for Medicare & Medicaid Services (CMS), under the Department of Health and Human Services, has announced a forecasted funding opportunity titled "Innovation in Behavioral Health (IBH)" with opportunity number CMS-2Q2-26-001. This initiative is part of CMS's continued effort to enhance behavioral health services by integrating care in behavioral health settings through a coordinated value-based payment approach. The opportunity is offered through a cooperative agreement model, indicating a collaborative relationship between the funder and the recipients. The IBH Model targets state Medicaid agencies (SMAs) and seeks to support the integration of behavioral health services in specialty behavioral health organizations and settings. It is specifically designed for adult beneficiaries covered by Medicaid, Medicare, or both, who experience moderate to severe mental health conditions and/or substance use disorders. Through this model, CMS aims to test a value-based payment system aligned across both Medicaid and Medicare programs. The model includes a total of seven years for its lifecycle, starting with a two-year Pre-Implementation Period from January 2026 through December 2027. This will be followed by a five-year Implementation Period running from January 2028 to December 2032. CMS anticipates awarding up to five cooperative agreements, each potentially worth up to $7.5 million over the seven-year term. The total program funding for this opportunity is expected to be $37.5 million. Eligible applicants are limited to state Medicaid agencies from all 50 U.S. states, the District of Columbia, and U.S. territories, which include American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. Applicants may choose to implement the model on a state-wide basis or within a specific sub-state region, subject to CMS approval during the application process. The anticipated timeline for the funding opportunity includes an estimated post date of June 18, 2025, with the final application deadline projected for September 8, 2025. Selected applicants will likely receive awards prior to the projected project start date of January 1, 2026. No cost-sharing or matching is required for this opportunity, making it financially accessible to eligible state agencies. For further inquiries or to express interest in the model, applicants can reach out to the grantor via email at IBHModel@cms.hhs.gov. As this is a forecasted opportunity, details such as final application instructions and formal notice of funding availability will likely be released after the estimated post date in June 2025.