Integrated Physical and Behavioral Health in Medicaid Managed Care

Impact on providers

Logan Kelly, Center for Health Care Strategies
Michelle Conway, Center for Health Care Strategies
Michelle Herman Soper, Center for Health Care Strategies


Clinical integration of physical and behavioral health services may improve health outcomes and reduce costs for people with behavioral health conditions. But separate Medicaid financing for physical and behavioral health care can create barriers to coordinated care delivery.

In recent years, several states have begun contracting with managed care plans to integrate behavioral health services and reduce the fragmentation of care for Medicaid enrollees. This brief, Exploring the Impact of Integrated Medicaid Managed Care on Practice-Level Integration of Physical and Behavioral Health, describes how integrated financing influences the coordination of physical and behavioral health services at the care delivery or practice level. It was produced by the Center for Health Care Strategies with support from the Blue Shield of California Foundation and the California Health Care Foundation.

The brief distills insights from providers in three states — Arizona, New York, and Washington — that have recently transitioned to integrated managed care. Based on their insights, it highlights recommendations for states seeking to improve health outcomes through advancing greater physical-behavioral health integration organized within three key areas:

  • Data and quality measures
  • Payment and business practices
  • Integrated clinical service delivery