Open Minds

January 26, 2017 12:55 ET

Medicaid Behavioral Health Carve-Outs Decline 35% As States Continue Push Towards Integrated Care Coordination In 2017

OPEN MINDS Releases Annual Update On Behavioral Health Financing Models For State Medicaid Plans

GETTYSBURG, PA--(Marketwired - January 26, 2017) - State Medicaid organizations are changing the way they fund behavioral health treatments. More of these organizations have replaced their traditional carve-out financing models -- in which behavioral health benefits are separately administered -- with consumer-specific carve-outs or behavioral health carve-ins. The number of these traditional carve-outs has dropped from 17 in 2013 to only 11 at the beginning of 2017. These strategic insights and more are included in the recently released OPEN MINDS Market Intelligence Report, State Medicaid Behavioral Health Carve-Outs: The OPEN MINDS 2017 Annual Update.

"Because each state's Medicaid system is unique, parsing and surveying the many different behavioral health financing arrangements is difficult," said Athena Mandros, OPEN MINDS Market Intelligence Manager and author of the report. "But this report provides granular knowledge on each state's financing arrangements that health and human services executives need to make the strategic decisions to implement care coordination programs, develop new service lines, and form strategic partnerships."

In the report, OPEN MINDS analyzed all 50+ state Medicaid plans and how they finance behavioral health. The report has state-specific information, including:

  • A state-by-state chart with the Medicaid behavioral health financing model in each state
  • A chart of the management entities responsible for each category of behavioral health services - inpatient mental health, traditional mental health, specialty mental health, outpatient substance abuse, mental health pharmacy, and general pharmacy - in every state in 2017
  • An in-depth chart listing the states with pending Medicaid system changes, which compares the current behavioral health financing models to the projected models, as well as timelines for the transition

"Medicaid behavioral health carve-outs are a casualty of the move toward integrated care coordination," Ms. Mandros explained. "As more state Medicaid organizations try to contain health care costs, we'll likely see the number of Medicaid behavioral health carve-outs continue to decline with a preference for the consumer-specific vertical carve-out and the total carve-in of behavioral health benefits to the Medicaid health plans."

For a detailed summary of the report, check out this article: Medicaid Behavioral Health Carve-Outs - 11 Remain, which is available at no cost to the public.

The full report is available free to OPEN MINDS Premium and Elite members in The OPEN MINDS Circle Library: State Medicaid Behavioral Health Carve-Outs: The OPEN MINDS 2017 Annual Update.

Published weekly by OPEN MINDS' team of experts, Market Intelligence Reports are provided as free resources to Premium & Elite members of the OPEN MINDS Circle. Click here for details on how to become a Premium or Elite member. The report is also available for purchase in the OPEN MINDS e-store by clicking here. Follow OPEN MINDS on Twitter @openmindseditor and follow Athena Mandros @athena_mandros.

OPEN MINDS is a national strategic advisory firm specializing in the sectors of the health and human service industry serving individuals with complex support needs: mental health; addiction treatment; children & family services; intellectual & developmental disabilities; chronic disease management; long term care; social services; correctional health care, reentry & diversion; and juvenile justice.

Founded in 1987 and based in Gettysburg, Pennsylvania, the 75+ associates believe by providing the latest market intelligence and management best practices to organizations serving the health and social support needs of the most vulnerable consumers, those organizations will be better able to provide efficient and effective services. Learn more at

For additional questions and inquiries, please contact Sarah Threnhauser, Executive Vice President, OPEN MINDS at 717-334-1329 or

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