Innovation in Behavioral Health (IBH) | CMS 2Q2 26 001

Opportunity Information: Apply for CMS 2Q2 26 001

The Innovation in Behavioral Health (IBH) Model is a Centers for Medicare and Medicaid Services (CMS) funding opportunity that supports a seven-year, voluntary effort to strengthen integrated care in specialty behavioral health settings. The model focuses on adults covered by Medicaid, Medicare, or both (dually eligible) who have moderate to severe mental health conditions and/or substance use disorders. The core idea is to improve how behavioral health organizations deliver whole-person care by pairing an integrated care delivery framework with a value-based payment approach, rather than relying only on traditional fee-for-service reimbursement.

A central feature of IBH is that it tests a value-based payment (VBP) model that is intentionally aligned across Medicaid and Medicare. In practice, that means the model is designed to reduce the fragmentation that often occurs when beneficiaries and providers have to navigate different rules, incentives, and payment methods across the two major programs. By aligning incentives, CMS aims to encourage specialty behavioral health providers and settings to coordinate more effectively with physical health care and other supports, with the expectation that this can improve outcomes and potentially reduce avoidable utilization over time.

CMS, through the Center for Medicare and Medicaid Innovation (the Innovation Center), plans to select up to five state Medicaid agencies (SMAs) for Cohort II participation. Only SMAs are eligible applicants, meaning the applicant must be a state-level Medicaid authority with the legal and administrative capacity to receive and manage a cooperative agreement. Eligibility extends to all 50 states, Washington, DC, and the US territories of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the United States Virgin Islands. States can propose implementing the model statewide or in a defined sub-state region, though sub-state participation is subject to CMS approval during the application review.

The performance period spans seven years and is split into two distinct phases. The first is a two-year Pre-Implementation Period running from January 2027 through December 2028, which is typically used for planning, stakeholder engagement, program design, contracting, infrastructure development, and readiness activities needed to launch the payment and care delivery approach. The second is a five-year Implementation Period running from January 2029 through December 2033, when the model is actively operated and the aligned value-based payment and integrated care framework are put into full practice.

Funding is provided through a cooperative agreement, which generally implies substantial federal involvement and ongoing coordination rather than a simple one-time grant with minimal federal interaction. CMS indicates an award ceiling of up to $7.5 million per selected recipient across the full seven-year period. With up to five expected awards, the opportunity is structured as a relatively small cohort of state Medicaid agencies that will implement, operate, and help test the model at scale within their jurisdictions.

Key administrative details from the posting include the funding opportunity title "Innovation in Behavioral Health (IBH)," funding opportunity number CMS-2Q2-26-001, assistance listing (CFDA) number 93.610, and an original application closing date of June 3, 2026. The opportunity is categorized as discretionary funding and is tied to the health activity category, reflecting its focus on payment and delivery system innovation for high-need behavioral health populations.

• The Centers for Medicare Medicaid Services in the health sector is offering a public funding opportunity titled "Innovation in Behavioral Health (IBH)" and is now available to receive applicants.
• Interested and eligible applicants and submit their applications by referencing the CFDA number(s): 93.610.
• This funding opportunity was created on 2025-10-16.
• Applicants must submit their applications by 2026-06-03. (Agency may still review applications by suitable applicants for the remaining/unused allocated funding in 2026.)
• Each selected applicant is eligible to receive up to $7,500,000.00 in funding.
• The number of recipients for this funding is limited to 5 candidate(s).
• Eligible applicants include: State governments.

Apply for CMS 2Q2 26 001

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