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The Short Answer: Three Payers, Three On-Ramps, and Your Outcomes Data Decides the Rate
If you operate a behavioral health treatment center with a Carelon, CVS/Aetna, or BCBS contract renewing in 2026, value-based care is no longer a future-state slide. It is the rate conversation. Carelon is asking for measurement-based care attestation and outlier-cost attribution. CVS/Aetna is wiring behavioral data into medical total-cost-of-care models. BCBS plans in New Jersey, Pennsylvania, and Massachusetts are piloting bundled SUD episodes. The operator who walks in with two years of clean PHQ-9 and GAD-7 data sets the rate. The one who waits gets the comparison set.
In Q1 2025 a Carelon network rep asked one of our Massachusetts SUD clients for 18 months of PHQ-9 and GAD-7 score pairs, broken out by episode, before they would even entertain a rate conversation on Level 2.5 partial hospitalization (an outpatient level of care under the ASAM Criteria, 4th Edition). That was a value-based care intake form dressed up as a network request. Corbin Petro, president of Carelon Behavioral Health, said the quiet part out loud in a 2026 interview: “Typically, providers, from what I have found, want to get paid more for what they’re doing, which makes sense, and the definition of value varies dramatically. We do have to incorporate cost-based measures, because that is the definition of value.” That is the new contracting reality. Cost-based measures are now table stakes.
Carelon is not a niche vendor. Carelon Behavioral Health currently employs 4,700 people nationwide, serving over 40 million people. CMS has also planted a federal template. On December 18, 2024, CMS announced that state Medicaid agencies in Michigan, New York, Oklahoma, and South Carolina were selected to participate in the Innovation in Behavioral Health (IBH) Model, with model implementation beginning on January 1, 2025. Commercial payers track that template closely. If your contracting team has not been asked about outcomes data yet, you are next.
What Each Payer Actually Wants (and Where the Traps Live)
Carelon’s current ask, based on six contracts we reviewed since January, centers on three things: measurement-based care administration at admission, mid-episode, and discharge; readmission tracking at 30 and 90 days; and a shared-savings structure benchmarked against a regional cost-of-care average the operator never gets to audit. That last piece is the trap. We saw one Ohio client offered a 40/60 upside-only deal that converted to two-sided risk in year two with a corridor the provider had no historical data to model. They walked. Correct call.
CVS/Aetna is different. Behavioral VBC conversations at Aetna route through the medical cost lens, which means a residential SUD provider gets evaluated on whether their patients show up in an ED 60 days post-discharge. If you do not have a release-of-information workflow that lets you see Aetna medical claims for your own discharged patients, you cannot defend your performance. Period.
BCBS plans vary wildly by state. Horizon BCBSNJ has been the most aggressive on bundled SUD episodes. BCBS of Massachusetts pushed a quality-bonus structure tied to HEDIS measures including Follow-Up After Hospitalization for Mental Illness (FUH), which measures the percentage of discharges for members six years of age and older who were hospitalized for a principal diagnosis of mental illness, or any diagnosis of intentional self-harm, and who had mental health follow-up service within 30 days after discharge and within 7 days after discharge, and Initiation and Engagement of SUD Treatment (IET). NCQA recently widened the FUH net: follow-up visits can now be completed by any qualified Provider, including Primary Care Providers (PCPs), if the claim includes a mental health diagnosis and the Provider is licensed to bill the appropriate codes. That change matters. It means your discharge workflow can no longer assume only psychiatry counts. The bonus pools we have seen run between 2 percent and 6 percent of allowable, which sounds like nothing until you realize the denial rate on the underlying claims is what actually moves the number.
Readiness: Five Capabilities You Need Before You Sign Anything
Before any operator signs a risk-bearing contract with Carelon, CVS/Aetna, or a Blue plan, five capabilities have to be in place. Miss one and you are negotiating from a deficit.
- Measurement-based care, actually deployed. Not a checkbox in the EMR. PHQ-9, GAD-7, BAM, or comparable instruments administered on a defined cadence aligned to ASAM Criteria, 4th Edition expectations, with clinician documentation of how scores changed the treatment plan.
- Attribution methodology in writing. Who counts as your patient, for how long, and what triggers attribution loss. Vague attribution language is where margin disappears.
- Baseline cost and outcomes data you control. If the payer brings the only dataset, you lose every disagreement.
- Clean claim rate above 95 percent and days in AR under 35. VBC reconciliation pulls from claims data. Dirty claims poison your performance numbers before any clinical question is asked.
- A stop-loss or risk corridor you can live with. We will not let a client take downside risk without a per-episode cap. SUD episode costs vary widely across acuity. That variance has to live somewhere, and it should not live entirely on your P&L.
If you cannot check all five, the right answer is a one-year upside-only pilot with a data-sharing addendum, not a two-sided risk deal. Note that CMS designed the IBH Model the same way: IBH model payments are upside-only, meaning that participants have the potential to receive a bonus payment, and there’s no risk that a participant will owe a portion of its revenue back to CMS or the MCO. If CMS is starting upside-only, you should too.
What Operators With Outcomes Data Can Negotiate in 2026
Here is the part nobody at the payer wants you to know. Behavioral health networks are thin. The federal MHPAEA push made that thinness a regulatory exposure, not just an access problem. On September 9, 2024, the Departments of Labor, Health and Human Services, and Treasury released the MHPAEA Final Rule. The final rules increase scrutiny of network adequacy and introduce core treatment coverage requirements to the meaningful benefit standard. The Final Rule creates a “network composition” NQTL that reflects the Departments’ ongoing enforcement position around network access and will require detailed data measures related to out-of-network utilization, network adequacy measures (such as time and distance standards), and provider reimbursement comparisons to benchmarks.
One important caveat: the Departments will not enforce the 2024 Final Rule or otherwise pursue enforcement actions, based on a failure to comply that occurs prior to a final decision in the litigation, plus an additional 18 months. Read that carefully. The 2013 rule and the underlying statute are still in force. The MHPAEA statute requires the Department of Labor and the Department of Health and Human Services to each undertake at least 20 MHPAEA investigations per year, so we do not expect enforcement of the statute to cease altogether. Payers still have to document network adequacy, and patients still file private parity suits. Operators still have real room to negotiate.
An operator with two years of measurement-based care data showing PHQ-9 reduction of 5+ points across 70 percent of completers, plus 30-day readmission rates below regional benchmarks, can credibly ask for: a 12 to 18 percent rate lift on the underlying fee schedule before any VBC overlay; carve-outs from the standard prior auth process for Level 2.5 and Level 2.1; and a single-case-agreement framework for out-of-network referrals at 85 to 90 percent of in-network allowable. We negotiated exactly that structure for a Florida client last fall with one of the national Blues plans. The rate sheet moved. Not because we asked nicely. Because they showed up with their own data and the data lined up.
What to Do in the Next 90 Days
If you operate in Florida, New Jersey, Pennsylvania, Massachusetts, or Ohio and you have a Carelon, Aetna, or BCBS contract renewing in 2026, the work starts now. Pull your last 24 months of MBC data, even if it is messy. Pull your denial rate by payer and CPT code. Pull your days in AR. Map your discharge follow-up workflow against HEDIS FUH and IET specs. If you do not have those numbers in one place by July, you are not ready for the renewal conversation that is coming.
Watch the federal template, too. CMS may select up to five additional states to receive a cooperative agreement award to join the IBH Model via Cohort II. CMS will select up to five state Medicaid agencies (SMAs) to participate in the seven-year cooperative agreement, with up to $7.5 million available to each state. The program includes a two-year pre-implementation period (2027–2028) and a five-year implementation period (2029–2033). Whatever Medicaid agencies design for Cohort II becomes the commercial template inside 36 months.
Operators who treat this as a contracting alert and start preparing now will set the rate environment for the rest of the field in 2027. The ones who wait to be handed terms become the comparison set everyone else negotiates against. If you have a draft VBC term sheet from Carelon, Aetna, or a Blue plan and you want a second set of eyes, our team reads contracts for a living. Bring the redline.
Frequently asked questions
Is the MHPAEA 2024 Final Rule still enforceable in 2026?
Not the new provisions. On May 15, 2025, DOL, HHS, and Treasury announced a non-enforcement policy for the 2024 Final Rule pending the outcome of the ERIC litigation, plus an additional 18 months. The 2013 MHPAEA rule and the underlying statute remain fully in force, including NQTL comparative analysis obligations under the Consolidated Appropriations Act, 2021. Plan members can still bring private parity suits, and DOL is still required by statute to conduct at least 20 investigations per year.
Which states are in the CMS Innovation in Behavioral Health (IBH) Model?
CMS announced on December 18, 2024 that Michigan, New York, Oklahoma, and South Carolina were selected. Oklahoma will implement statewide; Michigan, New York, and South Carolina will implement in designated sub-state geographic service areas. Implementation began January 1, 2025. CMS released a Cohort II Notice of Funding Opportunity on October 16, 2025, and may select up to five additional state Medicaid agencies, with up to $7.5 million in cooperative agreement funding per state.
What HEDIS measures should a behavioral health operator track for payer contracts?
Start with the two that show up most often in commercial VBC term sheets: Follow-Up After Hospitalization for Mental Illness (FUH), which measures 7-day and 30-day post-discharge follow-up, and Initiation and Engagement of SUD Treatment (IET). NCQA expanded FUH in 2025 to allow follow-up by any qualified provider, including PCPs, when the visit includes a mental health diagnosis. That widens your numerator, so your discharge planning workflow should reflect the new specs.
Should a behavioral health operator accept downside risk in a payer VBC contract?
Not without five capabilities in place: deployed measurement-based care, written attribution methodology, baseline cost and outcomes data you control, a clean claim rate above 95 percent with days in AR under 35, and a per-episode stop-loss or risk corridor you can live with. If you cannot check all five, push for a one-year upside-only pilot with a data-sharing addendum. CMS itself designed the IBH Model as upside-only, with no risk that a participant will owe revenue back. If the federal template is upside-only, your first commercial VBC contract should be too.
References
- CMS Innovation Center, Innovation in Behavioral Health (IBH) Model
- CMS, The Mental Health Parity and Addiction Equity Act (MHPAEA)
- U.S. Department of Labor, Statement on Enforcement of the MHPAEA 2024 Final Rule (May 15, 2025)
- NCQA, HEDIS Follow-Up After Hospitalization for Mental Illness (FUH)
- Behavioral Health Business, How Carelon, CVS and BCBS Are Rewiring the Backend for Behavioral VBC
- CMS, Innovation in Behavioral Health (IBH) Model Frequently Asked Questions
- Moss Adams, Explore the Innovation in Behavioral Health (IBH) Model