CMS Releases Innovation in Behavioral Health (IBH) Model
Cohort II Notice of Funding Opportunity
The Centers for Medicare & Medicaid Services (CMS), through the Center for Medicare and Medicaid Innovation (CMMI), has released the Notice of Funding Opportunity (NOFO) for Cohort II of the Innovation in Behavioral Health (IBH) Model.
IBH Cohort II will support up to five state Medicaid agencies in implementing a value-based payment model aligned across Medicaid and Medicare to advance integrated behavioral and physical health care in specialty behavioral health settings. Selected states may receive up to $7.5 million in cooperative agreement funding over a seven-year period of performance, including a two-year pre-implementation phase followed by a five-year implementation period.
Overview of the IBH Model
The IBH Model is designed to test whether payment and delivery reform in specialty behavioral health settings can improve quality, increase access, strengthen care integration, and reduce avoidable utilization among adult Medicaid, Medicare, and dually eligible beneficiaries with moderate to severe behavioral health conditions.
Under Cohort II, participating states must:
- Design and implement a Medicaid Payment Approach aligned directionally with the CMS Medicare payment methodology
- Recruit and support eligible specialty behavioral health practice participants
- Strengthen health IT and data infrastructure to support integrated care
- Implement required quality measurement, reporting, and evaluation activities
- Coordinate with managed care entities and state behavioral health authorities
The two-year pre-implementation period is intended to allow states to establish governance, finalize payment design, recruit practices, and build the infrastructure necessary for model implementation.
Key Dates
- Optional Letter of Intent due: April 1, 2026
- Application deadline: June 3, 2026
On March 5, CMS is hosting an informational webinar to provide additional detail on model requirements and the application process.
Strategic Considerations for State Medicaid Agencies
IBH Cohort II combines cooperative agreement funding with structured model design and implementation requirements. States considering participation may wish to evaluate:
- Alignment with existing Certified Community Behavioral Health Clinic (CCBHC), Health Home, and Section 1115 initiatives
- Grant application strategy and required partner Letters of Intent
- Implications for managed care contracts and rate-setting processes
- Health IT and data reporting readiness within specialty behavioral health settings
- Cross-agency governance and stakeholder coordination
The model requires significant planning during the two-year pre-implementation period, including practice recruitment, infrastructure development, partner engagement, and governance alignment. Early coordination across Medicaid, behavioral health, managed care, and executive leadership teams may support a more cohesive application and smoother transition into implementation.
How Myers and Stauffer Can Support States
Transformative Power of Partnership
Myers and Stauffer works with state Medicaid agencies on delivery system reform, payment design, managed care alignment, and federal funding opportunities.
Our team supports states in developing grant application strategies, preparing required application materials and partner documentation, and designing implementation approaches that align with existing Medicaid and behavioral health initiatives.
As states assess participation in IBH Cohort II, we are available to discuss how the model’s application and implementation requirements intersect with broader behavioral health and payment reform priorities.
For additional information about our Grants Services and delivery system reform experience, visit our website.
| Bobby Courtney, MPH, JD Principal | Jerry Dubberly, PharmD Principal | Catherine Snider Principal |
| Kelly Gonzalez, MS, PMP, CUA Director | Julia Kotchevar, MA Director | Jennifer Kyritsis, MHA Director |
