Designing integrated behavioral health services for Medicaid enrollees, background and case studies

September 16, 2020

A brown-haired person in sweater and jeans, with puzzle pieces removed from her body and floating around her. The puzzle pieces are meant to be health services, which are scattered instead of integrated.A growing number of states are implementing new strategies to better integrate health services and provide holistic care–particularly for Medicaid beneficiaries–with the ultimate goals of improving care coordination and patient outcomes and, in some cases, lowering health care expenses as well.

For decades, physical and behavioral health care–including both mental health and substance use disorder treatment–have operated in silos. Too often, this fragmented care system has meant that individuals with behavioral health needs either do not receive the care that they need or receive a patchwork of care from a multitude of uncoordinated publicly and privately funded providers in systems that are difficult to navigate. Integrating physical and behavioral health services for Medicaid enrollees may address those issues.

Medicaid-covered populations are the focus of these integration efforts for a variety of reasons:

  • Approximately one-quarter of all behavioral health spending nationally is by Medicaid, which is the single largest payer for behavioral health services.
  • Medicaid beneficiaries with behavioral health diagnoses account for almost half (48 percent) of total Medicaid expenditures, yet represent only 20 percent of the total Medicaid population.
  • Medicaid beneficiaries with behavioral health diagnoses and chronic physical comorbidities–hypertension, coronary heart disease, and diabetes–have significantly higher medical (non-behavioral health) costs than those without a behavioral health diagnosis.

While integration is a broad term used to refer to services, programs, policies, payments, and administrative structures, this report focuses on the clinical integration of behavioral health and physical health services and the systems level changes to health services states put in place to achieve it.

This brief provides an overview of behavioral health integration strategies in state Medicaid programs. In addition, it includes case studies that explore integration in five states that have recently engaged in major Medicaid integration initiatives: Arizona, Arkansas, Michigan, New York, and North Carolina.