The CMS Innovation in Behavioral Health Model is a seven-year federal initiative that puts specialty behavioral health organizations at the center of whole-person care for adults with moderate to severe mental health conditions and substance use disorders. Rather than treating behavioral health as a referral destination, the model redesigns it as the primary coordination hub, connecting patients across physical health, community services, and social determinants of health from within the behavioral health setting itself.
About the IBH Model Program
Administered by the Centers for Medicare and Medicaid Innovation (CMMI) within CMS, the IBH Model tests the impact of aligning value-based payment incentives across Medicaid and Medicare simultaneously, an approach that has historically been difficult to execute at scale. Cohort I launched with Michigan, Western New York, and South Carolina. Cohort II will add up to five additional state Medicaid agencies, with a two-year pre-implementation period beginning January 2027 followed by a five-year implementation period running through December 2033.
Funding Size
- Up to $7,500,000 per selected state over the seven-year model period
- Funding instrument: cooperative agreement
- Up to 5 states selected for Cohort II
Who Can Apply
- State Medicaid Agencies (SMAs) from all 50 states, Washington D.C., and U.S. territories including American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands
- States may apply at the full state level or designate a sub-state geographic area
- Cohort I states (Michigan, New York, South Carolina) are not eligible for the Cohort II SMA application but may apply separately for the Medicare component via a separate Request for Application
Geographic Eligibility
- United States and eligible territories only
Read Also: Steve Waugh Foundation Rare Disease Grants 2026 – Apply Now
Sector or Thematic Focus
- Integration of behavioral and physical health care
- Value-based payment model development for Medicaid and Medicare alignment
- Screening and referral for social determinants of health
- Substance use disorder and mental health treatment in specialty settings
- Whole-person, coordinated care infrastructure development
Application Process
Applications are submitted through Grants.gov. States are encouraged to review the full Notice of Funding Opportunity before applying. An optional letter of intent was due April 1, 2026. A pre-application webinar was held December 11, 2025, with additional technical assistance resources available through CMS.
Required Materials
- Completed application submitted through Grants.gov
- State Medicaid Agency documentation and authorization
- Program narrative addressing model design, implementation readiness, and value-based payment strategy
- Budget aligned to the cooperative agreement structure
Read Also: EDGE of Existence Fellowships 2027 – Apply Now
Key Dates
- Optional letter of intent: 1 April 2026
- Award notices expected: September 2026
- Pre-implementation period: January 2027 to December 2028
- Implementation period: January 2029 to December 2033
Selection Notes
- Up to five states will be selected; competition is limited by the number of available awards
- States proposing sub-state geographic participation must clearly define the target area and justify the scope
- Selection will consider implementation readiness, Medicaid infrastructure, and quality of the proposed care integration model