Medicaid programs offer a unique venue for behavioral health providers to push the industry toward greater adoption of value-based care.

Often, leaders across the industry note that they see the most receptiveness and make the most progress on payment innovation in their alliances within the realm of Medicaid. Still, there is palpable frustration at the lack of overall progress. This leads to the question of whether or not value-based care is still worth pursuing.

Value-based care critics note the vague, overly idealistic and impractically aspirational nature of the overall value conversation and the lack of consensus with payer partners.

Brandon Fisher, chief strategy officer for the multi-state behavioral health nonprofit provider Merakey, said pushing for value-based care in behavioral health is very much still worth the effort for those reasons.

“Because it is aspirational, that’s the reason why we should have that conversation,” Fisher said during a panel chat at Behavioral Health Business’ event VALUE 2025. “I think if you talk to any of our providers, they would say [they] provide great services. Value-based care starts to align all of us around what great services are, and it moves that conversation forward from just the amorphous, ‘We’re excellent,’ to ‘What is excellence?'”

Merakey operates in 12 states. Fisher said its revenue totals about $770 million. Its latest annual report states it offers services across 709 locations and programs that serve about 35,000 people.

Behavioral health has a unique relationship to Medicaid. Federal data show that those on Medicaid experience behavioral health conditions at significantly higher rates than populations with other health insurance coverage. Other research shows that about 40% of those on Medicaid experienced a mental health or substance use disorder (SUD) challenge in the past year.

Despite the strong connection, the wide variability of Medicaid coverage and program requirements challenges the industry’s ability to work with the safety-net program. Thus, behavioral health providers must simplify where they can.

One way to do that is by allowing providers to communicate about value-based care to health plans, policymakers and even their respective staff members.

“Value-based care is actually very simple,” Dr. Eric Arzubi, cofounder of Billings, Montana-based Frontier Psychiatry, said during the panel. “Value-based care is getting paid to do the right things. … If you’re getting paid to do the right thing, continuing down this road makes total sense.”

Arzubi and the other panelists pointed to the disconnect between fee-for-service reimbursement and activities by behavioral health providers that translate to impactful care. Still, Arzubi added that Frontier Psychiatry sees it as an imperative to ensure that the care provided improves the lives of patients and couched the notion in terms of self-accountability.

Self-accountability for effective care and operations happens at Frontier Psychiatry independently of the actual progress of value-based care development. Last year, the all-digital psychiatric provider secured its first bit of outside funding, and part of it went to hiring an actuarial group to assess the company’s data to test for impact.

Even in the fee-for-service paradigm, investing in the technology and strategy needed to enable value-based care can arm providers with compelling discussion points when pushing payers to do something out of the norm, Arzubi said.

Value-based care and culture

Outside of the dollars and cents, Arzubi notes that focusing on self-accountability and driving toward impactful care has a meaningful impact on company culture.

“I want to be able to go back to my team and say, ‘You guys are doing a great job — look at this — you guys are moving the needle,'” Arzubi said.

Value-based care development can also benefit culture from another direction.

Dr. Amit Parikh, chief medical officer for Brave Health, a digital behavioral health organization that focuses on the Medicaid population, said that the optimal way to develop specific strategies, even specific clinical measures, is to include clinicians and clinical leaders in the earliest stages of planning and development.

“Developing clinical measures is having your clinical team have a point of view and develop that point of view over time and build that as a culture,” Parikh said. “When you have a strong culture of saying, ‘We believe this is the right tool to use for these reasons for these populations,’ you’re not waiting for other people to tell you what to do.”

Behavioral Health Business

A bottom-up approach to value-based care development also helps work through clinician skepticism of these concepts generally and the skepticism toward the intent of non-clinical managers pushing for such concepts. This is an experience that Fisher described within Merakey.

In a conversation with his wife, who is a clinical psychologist, Fisher said he wanted to drive clinical initiatives and persuade clinicians toward participation with the macro-view of the issues, using lots of data.

“[She told me] that you have to flip that script and drive to the clinical importance of what you’re doing, and then you’ll get your story to float to the top,” Fisher said. “When we started doing that, that’s when we saw that adoption. When it was a corporate initiative … it was just another thing from corporate you had to just add to your list. When we went out to the clinicians and asked what they were trying to drive toward and what quality looked like in their services, it became a very different conversation.”

He further notes that many clinical professionals in behavioral health move into an industry where they make less than their peers because they want to make an impact in people’s lives. Being able to track outcomes and prove impact of care makes a meaningful difference in the experience of providers.

The looming shadow of Medicaid cuts

At the time of the panel, Congress had just passed their spending bill for the remainder of federal fiscal year 2025. But on April 10, Congress passed and President Donald Trump signed legislation that would require the House Energy & Commerce Committee to come up with funding and other reforms that would cut spending by $880 billion over the next 10 years.

This is expected to be disastrous for the behavioral health industry. As Arzubi put it in a stab at dark humor when asked about the possible impact of cuts, “It’s going to suck.”

Arzubi also said that such reforms could cause complete redos within individual Medicaid programs and potentially impact previous positive developments. He noted Montana recently continued its work on expanding the population that could qualify for Medicaid.

It’s also casting a pall of uncertainty across Medicaid and behavioral health generally, freezing conversations on the topic in place. When external forces already threaten the progress of value-based care, it goes against providers’ interests to willingly “lose that steam” behind the issue, Parikh said.

“Those conversations are already difficult to have with some of the Medicaid payers,” Parikh noted. “It’s even harder now because there is uncertainty around their own internal funding.”