The U.S. healthcare system is experiencing a paradigm shift—one where Behavioral Health Integration in Primary Care is becoming a defining feature of high-performing health systems. Providers and policymakers alike increasingly recognize that integrating behavioral and physical health services leads to better patient outcomes and prevents costly, acute health events.
Federal health plans such as Medicare and Medicaid are joining the movement, laying the groundwork for more collaborative, whole-person care models. However, the road to widespread adoption is uneven—especially when it comes to value-based care, which is often essential to sustaining integrated models.
At the recent Behavioral Health Business VALUE event, industry leaders explored how integrated care can work in practice, the payment models that support it, and why Behavioral Health Integration in Primary Care must be tied to systemic financial reform.
Why Integration Matters More Than Ever
For decades, behavioral health services have existed in silos, treated as separate from primary care. This fragmented approach has left many patients without access to coordinated treatment, often resulting in poor health outcomes and expensive emergency interventions.
But change is underway.
“In Medicaid, there was a trend around carving out behavioral health, so that you had separately managed benefits,” said Seth Zuckerman, Chief Business Officer at Upward Health, a venture-backed, in-home care provider. “I think more and more states have looked to carve it in. That’s helpful in integrating primary care and behavioral health.”
Upward Health operates in six states and partners with Medicare and Medicaid to deliver whole-person care—focusing on behavioral health, physical health, and social determinants of health. Their model exemplifies the benefits of Behavioral Health Integration in Primary Care, helping to prevent avoidable behavioral health crises and lowering long-term costs.
Proven Outcomes Through Integration
The evidence supporting Behavioral Health Integration in Primary Care is compelling. Studies show that integrated care doesn’t increase overall costs and can reduce emergency visits and hospitalizations—particularly among Medicare beneficiaries.
“What we often see is, through better management of some of those behavioral health conditions, you see better outcomes on the medical side and overall kind of lower cost of care,” Zuckerman explained.
In Upward Health’s model, rapid follow-up after acute behavioral health events ensures patients remain stabilized and supported, reducing the likelihood of repeat incidents and expensive inpatient stays.
Value-Based Care: The Financial Backbone of Integration
Even with strong clinical outcomes, Behavioral Health Integration in Primary Care faces significant implementation challenges—chief among them being outdated fee-for-service payment models that don’t support the time, team coordination, and ongoing care management required for integrated services.
“It’s incredibly difficult to build collaborative care under a fee-for-service model,” said Katherine Suberlak, SVP of Population Health at Oak Street Health, a national primary care provider focused on Medicare populations. Oak Street, now part of CVS Health, operates more than 200 centers across 28 states and uses a full-risk, value-based care model.
“What makes [building out collaborative care] possible is early investment to have that longitudinal impact with your patients,” Suberlak said. According to her, costs tend to decline significantly by the third or fourth year after implementing a collaborative, value-based care approach.
For organizations like Oak Street Health, Behavioral Health Integration in Primary Care is an essential part of delivering on the promise of value-based care.
Federal Initiatives Fueling Momentum
Federal agencies, particularly CMS, have made significant moves to support Behavioral Health Integration in Primary Care through both regulatory and financial channels.
In 2023, CMS launched the Innovation in Behavioral Health (IBH) Model to improve care coordination for adults with serious mental illness or substance use disorders. The agency also expanded its list of billable providers, allowing more mental health professionals to receive reimbursement under Medicare.
Additionally, CMS introduced new billing codes that directly support collaborative care—offering long-overdue recognition of the complex care management involved in treating patients with comorbid behavioral and physical health conditions.
Medicaid: Progress and Pitfalls
Despite federal momentum, Medicaid’s adoption of value-based care—so critical to sustaining Behavioral Health Integration in Primary Care—remains inconsistent and slower than Medicare’s.
Zuckerman recalled how rare it was just a few years ago to find Medicaid plans open to true value-based arrangements. “I remember in 2020 I was working on what was seemingly the first value-based contract, or at least the first with downside, with a large national Medicaid payer,” he said. “Now, we’re starting to see arguably the largest Medicaid payer in the nation having a template for a value-based contract.”
Even so, implementation varies widely. Suberlak noted that some Medicaid contracts create confusion by focusing too narrowly on quality metrics that may not align with long-term patient health. “There are components of full longitudinal care management, but not quite there,” she said.
Dual-eligible patients—those covered by both Medicare and Medicaid—may offer a pathway to bridge these systems. With around 40% of Oak Street’s patients falling into this category, they represent an opportunity to align systems and advance broader adoption of Behavioral Health Integration in Primary Care.
A Clear Path Forward
As providers continue to navigate the complexities of integration, one thing is increasingly clear: Behavioral Health Integration in Primary Care isn’t just a buzzword—it’s a necessary evolution of the healthcare system.
Organizations like Upward Health and Oak Street Health are proving that integrated, value-based models can improve outcomes and reduce costs. Meanwhile, federal agencies are beginning to align their policies and payment structures to support this transformation.
But for Behavioral Health Integration in Primary Care to become standard practice—not just a successful pilot—it must be paired with sustainable, risk-based payment models that reward long-term outcomes over short-term volume.
The future of healthcare lies in collaboration—not just between physical and behavioral health providers, but across government, payers, and care delivery organizations. When these systems work together, we move closer to a healthcare model that treats the whole person, not just their symptoms—and that’s a future worth investing in.
