How Arizona Medicaid Accelerated the Integration of Physical and Behavioral Health Services

ISSUE: In most states, one agency has responsibility for Medicaid enrollees' physical health services and at least one other agency has responsibility for their behavioral health services. Apportioning responsibility for the physical and behavioral health of Medicaid beneficiaries into different agencies inevitably leads to different--and sometimes misaligned--policy goals, program priorities, and purchasing strategies, thereby impeding the delivery of integrated care. GOAL: To describe the rationale, process, and impact of Arizona's 2015 consolidation of its physical and behavioral health services agencies into its Medicaid agency. METHOD: The study is based on published research, Arizona Medicaid agency materials, and interviews with 34 individuals, including representatives from the current Medicaid agency and previous behavioral health services agency, health plans, primary care and behavioral health providers, consumers, the justice system, and the health information exchange. FINDINGS AND CONCLUSIONS: Consolidation has led to increased attention to behavioral health services and behavioral and physical health integration, enabled more strategic purchasing and streamlined regulatory processes, and enhanced communication, collaboration, and mutual trust across sectors. Arizona’s experience offers lessons to policymakers as they consider how best to integrate physical and behavioral health services and ensure that Medicaid is an efficient and effective purchaser of health care services.