Integrating Behavioral Health into Medicaid Managed Care: Lessons from State Innovators

Herman Soper M
Publication Year: 2016
Patient Need Addressed: Behavioral health, Care Coordination/Management, Chronic Conditions, Substance Use
Population Focus: Medicaid beneficiaries
Intervention Type: Service redesign
Type of Literature: Grey

Medicaid enrollees with behavioral health needs have a high prevalence of chronic conditions and are often frequent users of physical and behavioral health services. More and more states are pursuing managed care models that integrate behavioral and physical health services to enhance care coordination, improve outcomes, and control costs for this high-need population. As of January 2016, 16 states currently provide or are planning to offer behavioral health services through an integrated managed care benefit — up from just a handful a few years prior.

This brief, made possible by Kaiser Permanente Community Benefit, provides insights from Medicaid officials and health plan representatives in five states — Arizona, Florida, Kansas, New York, and Texas — that are integrating behavioral health services within a comprehensive managed care arrangement. It explores three emerging options for integration, including comprehensive managed care carve-in, specialty plans for individuals with serious mental illness, and hybrid models. Common strategies used by these states to facilitate integration include a focus on engaging key stakeholders, balancing oversight and collaboration in state-plan relationships, and advancing clinical integration and cross-system accountability.

A key takeaway from states profiled is the need to develop flexible integrated care approaches that leverage existing capacity and account for variations in managed care landscapes. Lessons from these five early innovators offer valuable guidance for other states pursuing similar initiatives.

Insights Results

Overview of article

  • Medicaid enrollees with behavioral health needs have a high prevalence of chronic conditions and are often frequent users of physical and behavioral health services
  • Five innovator states— Arizona, Florida, Kansas, New York, and Texas — have integrated behavioral health within comprehensive managed care arrangements


  • States and plans both noted that it was critical to have explicit continuity of care requirements to safeguard beneficiaries during program transitions
  • One theme related to stakeholder engagement was evident across all states: there is “no such thing as too much” stakeholder outreach, education, and communication
  • Advice for engaging stakeholders during the program design and early implementation phases fell into two major buckets: 1) develop a comprehensive, overarching approach to stakeholder engagement; and 2) focus targeted engagement efforts on specific providers as needed

Key takeaways/implications

  • Provider engagement is critical. Providers are often the primary source of information about healthcare programs for beneficiaries and have on-the-ground knowledge that is valuable to states and plans
  • Key considerations when designing and implementing integrated behavioral health programs include: 1) Determining program design and structural elements; 2) Engaging stakeholders to facilitate implementation and ease program transitions; 3) Balancing oversight and collaboration in state-health plan relationships; and 4) Advancing clinical integration and cross-system accountability
  • Coordination across health systems is also important, advancing clinical integration and accountability across various providers