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IBH FINANCING TOOLKIT
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Planning Your IBH Funding Mix

Funding Mix Graphic
Building a financially sustainable integrated behavioral health (IBH) program is challenging with only a single funding stream.1-3 This section of the toolkit outlines the diverse funding streams available for primary care settings, highlighting how braiding multiple sources together can create a more reliable financial foundation. Practices may be underutilizing the full potential of each funding stream;3 therefore, investing time in understanding how to maximize each funding stream is key to long-term financial viability.  
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Potential Funding Streams for Behavioral Health Integration

Various grant funding opportunities and payer arrangements can support IBH.

Grant and Gifts

These funds can help cover start-up and other costs that payers do not reimburse.

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Graduate Medical Education Funds

These funds can support the training of residents in IBH, helping offset staffing costs.

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Arrangements with Payers

Payers may reimburse providers for each service provided (fee-for-service (FFS) payment) to patients or for achieving quality, outcomes, and cost metrics and targets (value-based payment).

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Cross-subsidization

Revenue or savings generated in one service line can offset the costs or under- or non-reimbursed services in another.

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How The Braided Model Can Work In Practice

These funding streams play different roles at various stages of your integration journey. They are not mutually exclusive; rather, their purpose shifts as your program matures.

  • The Catalyst (Igniting the Model): In the early stages, grants, gifts, graduate medical education funds, and internal cross-subsidization serve as the spark. These streams pay for "un-billables"—such as technology upgrades, practice facilitation, and initial staff hires—that must be in place before you can successfully execute payer contracts.
  • The Backbone (Generating the Baseline): As operations mature, payer arrangements (FFS and alternative payment models) become the primary stream, helping ensure the program remains viable after one-time grant funding expires. A large permanent endowment can also serve as a long-term funding anchor.
  • The Stabilizer (Ensuring Longevity): Once the model is mature, cross-subsidization evolves into a stabilizer. You take payments earned under alternative payment models and reinvest them into the behavioral health providers of the care team to sustain their non-billable or unreimbursed clinical work.
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6. Anschutz Foundation Supports Youth Mental Health with Generous Gift [Internet]. [cited 2026 Feb 18]. Available from: https://www.childrenscolorado.org/about/news/2025/september-2025/transformational-gift-for-mental-health-care/

7. Healing Hands Health - Bristol, TN [Internet]. [cited 2026 Feb 23]. Food City Presents $100,000 Check to Healing Hands Health in Support of Capital Campaign. Available from: https://www.healinghandshealth.org/press-releases/food-city-presents-100000-check-to-healing-hands-health-in-support-of-capital-campaign

8. Capital Campaign. Community Health Center of NRV [Internet]. [cited 2026 Feb 23]. Available from: https://chcnrv.org/capital-campaign/

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11. American Medical Association [Internet]. 2025 [cited 2026 Feb 2]. Medicare Basics Series: Advancing value-based care with alternative payment models. Available from: https://www.ama-assn.org/practice-management/medicare-medicaid/medicare-basics-series-advancing-value-based-care-alternative

12. American Medical Association. Behavioral health opportunities in value-based care: Guidance for physician practices [Internet]. Washington, DC: American Medical Association; 2025 Aug [cited 2026 Feb 1]. Available from: https://www.ama-assn.org/system/files/behavioral-health-value-based-care.pdf

13. America’s Health Insurance Plans. Integrating Behavioral Health and Primary Care: Better Care and Health for the Whole Person [Internet]. Washington, DC: America’s Health Insurance Plans; 2022 Feb [cited 2025 Sep 12]. Available from: https://ahiporg-production.s3.amazonaws.com/documents/202202-AHIP_IB_Behavioral_Health_Integration-004.pdf

14. Marcotte LM, Reddy A, Zhou L, Razliff A, Unützer J, Chang D, et al. Provision of Collaborative Care Model and General Behavioral Health Integration Services in Medicare. Psychiatr Serv. 2021 Jul;72(7):822-825. doi:10.1176/appi.ps.202000265

15. Cross DA, Qin X, Huckfeldt P, Jarosek S, Parsons H, Golberstein E. Use of Medicare’s Behavioral Health Integration Service Codes in the First Two Years: an Observational Study. J Gen Intern Med. 2020 Dec;35(12):3745-3746. doi:10.1007/s11606-019-05579-2 PubMed PMID: 31845107; PubMed Central PMCID: PMC7728892.

16. Lombardi BM, Greeno C, de Saxe Zerden L. Examining the use of psychiatric collaborative care and behavioral health integration codes at federally qualified health centers: A mixed-methods study. Fam Syst Health. 2023;41(4):527-536. doi:10.1037/fsh0000827

17. Shmerling AC, Gold SB, Gilchrist EC, Miller BF. Integrating behavioral health and primary care: a qualitative analysis of financial barriers and solutions. Transl Behav Med. 2020 Aug 7;10(3):648-656. doi:10.1093/tbm/ibz026

18. Bailey M, Matulis R, Brykman K. Behavioral Health Provider Participation in Medicaid Value-Based Payment Models: An Environmental Scan and Policy Considerations [Internet]. Hamilton, NJ: Center for Health Care Strategies, Inc.; 2019 Sep [cited 2026 Feb 1]. Available from: https://www.chcs.org/media/behavioral-health-provider-participation-in-medicaid-value-based-payment-models-an-environmental-scan-and-policy-considerations.pdf

19. Dotson RJ, Shaikh M. The key role of downside risk in the success of value-based care. HFMA [Internet]. 2024 Jun 2 [cited 2026 Feb 2]. Available from: https://www.hfma.org/payment-reimbursement-and-managed-care/value-based-payment/the-key-role-of-downside-risk-in-vbcs-success/

20. Soper MH, Matulis R, Menschner C. Moving Toward Value-Based Payment for Medicaid Behavioral Health Services [Internet]. [cited 2026 Feb 2]. Available from: https://njamha.org/links/boardmeetings/CHCSpaperonVBC.pdf

21. Ross KM, Gilchrist EC, Melek SP, Gordon PD, Ruland SL, Miller BF. Cost savings associated with an alternative payment model for integrating behavioral health in primary care. Transl Behav Med. 2019 Mar 1;9(2):274-281. doi:10.1093/tbm/iby054 PubMed PMID: 29796605.

22. An Analysis of DRG Profitability and Cross-Subsidization in Academic Medical Centers [Internet]. [cited 2026 Feb 2]. Available from: https://ajhcs.org/article/an-analysis-of-drg-profitability/

23. Gaffney LK, Michelson KA. Analysis of Hospital Operating Margins and Provision of Safety Net Services. JAMA Netw Open. 2023 Apr 18;6(4):e238785. doi:10.1001/jamanetworkopen.2023.8785

24. Why Primary Care Practitioners Aren’t Joining Value-Based Payment Models: Reasons and Potential Solutions [Internet]. 2024 [cited 2026 Feb 2]. Available from: https://www.commonwealthfund.org/publications/issue-briefs/2024/jul/why-primary-care-practitioners-arent-joining-value-based-payment doi:10.26099/2cxx-0z64