Denova Collaborative Health Puts Care Model to the Test Via Multi-State Expansion

Primary care and behavioral health provider Denova Collaborative Health is looking to expand its integrated care model beyond Arizona.

Arizona ended its behavioral health benefits carve-out within its Medicaid program in 2018, instead requiring Medicaid plans to manage both benefits. This led to some of the plans supporting integrated services, enabling innovative care models.

“We believe you can’t treat mental health if you’re not caring for your physical health as well,” Graham Johnson, CEO at Denova Collaborative Health, told Behavioral Health Business. “That’s the purpose behind integration. You need to take care of the body and mind, combined.”


The Phoenix-based integrated care provider now operates seven clinics in Arizona. It was founded as Bayless Integrated Healthcare by the Bayless family in 1982. Behavioral health care managed care organization Magellan Health acquired Denova in December 2020. Centene Corp. (NYSE: CNC) announced a deal to acquire Magellan a few weeks later.

The deal, valued at $2.2 billion, closed exactly a year later.

While still part of Centene, the Denova is fire-walled from much of the rest of the company. It reports financial performance to Centene and gets compliance support, Johnson said.  


The company rebranded to Denova Collaborative Health in July 2023. It offers four core services: psychiatric services, therapy, primary care and case management.

Not many organizations within either behavioral health or primary care integrate these services. Denova Collaborative Health’s approach is to wrap patients’ primary care and other services around the specific mental health needs.

Denova uses standardized measures of the severity of patients’ symptoms. It also focuses on providing same- and next-day availability.

This practice is often called measurement-based care. Denova Collaborative Health titrates up or down how much care it provides based on the trajectory of the patient’s symptoms.

Measure-based care makes care more personalized on the clinical side. On the business side, the company uses it as a means of utilization management.

“Therapy traditionally is a qualitative way of managing a patient,” George Orras, chief clinical officer of Denova Collaborative Health, told BHB. “We’re now quantitative; we can measure the success of a patient from point of entry to discharge. We can tell if a patient’s illness or severity of illness is decreasing or increasing, then bringing the team.”

The integrated, team-based approach to care and the use of outcomes measurement are hallmarks of the growing value-based care movement in behavioral health. These developments were intentional. The Denova Collaborative Health team anticipates that value-based care will become a desired mode of managing care and costs on the part of health plans.

But the industry isn’t here yet. Today, Denova Collaborative Health only has fee-for-service contracts with some “upside potential” involving cost savings. Johnson said the company is in talks with some payers to develop value-based care contracts.

Value-based care and integrated care go hand in hand. Providers and payers alike frequently extol the virtues of uniting care for the mind and body. However, paying for it has been a key sticking point.

And managing payments has also been a challenge. Orras, who first experienced working in risk-based value models in the 1990s, said that many providers lack the acumen or the business model to manage costs, the largest driver of which is utilization management. This often leads to the stereotypical poor outcome of providers cutting service instead of effectively managing conditions.

“That’s the wrong approach,” Orras said. “What we do here is we provide the services that get patients stable with whatever their condition might be. That’s what value base is all about.”

He also said that many providers often incorrectly expect payers to “bail them out” if a value-based care model fails.

But outside of the dollars and cents, providers also find cultural clashes between primary care and behavioral health professionals when put into the same setting. Denova Collaborative Health is no different. The company began to implement its integrated model about eight years ago. And it has taken most of that time to ensure the company and its various staff members are in harmony with their objective of genuinely holistic care.

“At one point we had a medical doctor arguing with the psychologist, just yelling at each other,” Johnson said. “You’re treating the same patients, you have to get the right people that believe in it.”

While it may make sense on paper, the fusion of behavioral health and primary care is fraught with potential hang ups in no small part due to the compartmentalization of behavioral health within the health care industry. The result is long waits for care for both, especially for outpatient mental health.

“It’s a whole-person model that’s integrated and collaborative,” Orras said. “So if you need primary care, we can get it for you the same day. If you need psych or you’re seeing a primary care physician, we get you in therapy right away.”

The model will be put to the test through the company’s expansion efforts. In July, it announced its plans to expand two other states by the end of 2025. It intends to first to launch virtual behavioral health services that will partner with primary care providers and then consider adding offices in those states. 

Johnson maintains that the company can thrive outside of Arizona’s unique Medicaid model. But each state will have to take a different payer partnership and growth play. Universally, to grow and provide payers’ membership same- and next-day access to care will require staff “bench strength” and reimbursement rates that will support that model.

There may be a difference depending on the speciality of the top payer or most receptive payer in any given state. The Denova Collaborative Health model may jive best with Medicare or commercial plans that take on both behavioral health and physical health benefits.

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