As the healthcare landscape shifts from fee-for-service models toward outcome-driven solutions, Value-Based Care in Medicaid Behavioral Health is becoming a growing area of interest. State Medicaid programs and their managed care organization (MCO) partners are increasingly open to new and flexible contracting approaches. Yet, despite this momentum, several misconceptions continue to slow adoption, especially for behavioral health providers navigating these early stages.
Stepping Outside the Box
At the 2024 VALUE Conference in Miami, industry leaders underscored that success in Value-Based Care in Medicaid Behavioral Health doesn’t require providers to squeeze into rigid boxes. Jay Taylor, Chief Growth Officer at Brave Health, challenged the prevailing belief that all value-based contracts must follow traditional frameworks like episodes of care or total cost of care models. “The biggest misconception is that you have to fit into a box in order to have these contracts,” he said. “Many MCOs are more flexible than people think.”
Brave Health’s Approach to Flexibility
Brave Health, a telehealth company delivering mental health services to Medicaid patients, has leaned into that flexibility. The company’s success in Value-Based Care in Medicaid Behavioral Health stems from its focus on measurable outcomes and patient engagement, rather than cost control alone. Since raising $40 million in a 2022 funding round led by Town Hall Ventures, Brave Health has been at the forefront of designing innovative value-based contracts tailored to the Medicaid population.
Behavioral Health Catching Up
Behavioral health providers have lagged behind physical health care in adopting value-based care models. However, given Medicaid’s high prevalence of mental health and substance use disorders, Value-Based Care in Medicaid Behavioral Health is increasingly seen as a critical path forward. Taylor noted that many MCOs are willing to partner outside traditional structures if providers can demonstrate improved results in access, retention, and care coordination.
“It doesn’t need to be an episode of care or a total cost of care construct,” Taylor said. “If we can define the areas we want to impact and build financial incentives around them, that is value-based care. There are partners out there ready to take that step.”
Targeting MCO Pain Points
Dr. Patricia Ares-Romero, Chief Medical Officer of Nomi Health, echoed that sentiment. Nomi Health is a direct-care, tech-enabled company focused on employer and telehealth solutions. At the panel, she emphasized that strong VBC proposals solve real problems MCOs face. For example, one major issue in Value-Based Care in Medicaid Behavioral Health is the low rate of post-discharge follow-up visits. According to the National Committee for Quality Assurance, only 36% of Medicaid patients with a substance use-related ER visit receive follow-up care within 30 days.
The Role of Telehealth in Follow-Up Care
“We could really make a difference in these lives if we’re able to get them to those follow-up appointments,” Ares-Romero said. She added that telehealth plays a vital role in bridging that gap, especially for patients with serious mental illness or addiction who face transportation and logistical challenges. Solutions like these exemplify how Value-Based Care in Medicaid Behavioral Health can improve health outcomes while reducing costly hospital readmissions.
Access and Standardization as Barriers
Access to care is another recurring pain point. MCOs often see this as an upstream issue—one that, if unresolved, nullifies downstream innovations like bundled payments or shared savings. Ares-Romero emphasized that tackling these access issues is essential for advancing Value-Based Care in Medicaid Behavioral Health as a sustainable, scalable model.
Moving Forward with the Right Partners
Ultimately, the future of Value-Based Care in Medicaid Behavioral Health depends on collaboration. Providers who come to the table ready to address real-world operational challenges—and propose creative, outcomes-driven solutions—are more likely to find willing MCO partners. While not all payers are prepared to move forward, the ones that are can be instrumental in reshaping how behavioral health care is delivered to Medicaid beneficiaries.
