Michigan reverses course on privatization of the mental health system

When the Michigan budget for Fiscal Year 2017 was released earlier this year, it included the now infamous Section 298 that would have turned Medicaid funding over to Medicaid Health Plans that would have in turn contracted with local community mental health agencies to provide services to people with developmental disabilities, mental illness, and other disabilities.

Currently, mental health services are funded separately as a “carve-out” to assure that these vulnerable populations are taken care of appropriately. The Michigan Department of Health and Human Services contracts with regional administrative community mental health agencies (PIHPs) that distribute funds to local CMH agencies to provide services. PIHPs would have been eliminated and Medicaid Health Plans, many of them for-profit, would have taken over, reducing the amount in the total budget available for services. The difference in overhead with the current PIHP System is striking: for Medicaid Health Plans, overhead costs for administering these plans is 15 - 17 % of the total funding. The Michigan PIHP system costs for overhead are only 6%.

By March 3, 2016, there was enough of an uproar over the proposed budget that the Michigan House Subcommittee on Judiciary and the Department of Community Health changed course, at least for now.

This is an email from Alan Bolter, Associate Director of the Michigan Association of Community Mental Health Boards (MACMHB), on 3/4/16:

...Today, Rep. VerHeulen issued the following statement regarding Section 298 of the Executive Budget request for the Department of Health and Human Services (MDHHS) Budget:

"After spending several weeks reviewing the proposed language in Section 298, I want to ensure stakeholders, patients, and Michiganders that the language will not be included in the House MDHHS budget.

“I appreciate the work of the Department of Health and Human Services in exploring new and innovative ideas to enhance the care of beneficiaries in the state of Michigan. Mental health is one of the most critical aspects of our health care system, and it is important that we carefully review proposed changes.

“The language in Section 298 will be removed in the House MDHHS budget. I am always open to proposed changes that prioritize more efficient and effective mental health care. I appreciate the workgroup process that has been initiated by Lieutenant Governor Calley and MDHHS, and look forward to analyzing the results of that workgroup process.

“The House Appropriations MDHHS Subcommittee will continue to work to craft a budget that ensures a high level of responsible care for Michiganders. Health care will remain a pressing issue, and the subcommittee looks forward to tackling the other challenges we face with Michigan's health care and social safety net systems."

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Alan Bolter, Associate Director
MACMHB
426 S. Walnut St.
Lansing, MI 48933
(517) 374-6848

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This is far from over, but at least there is a considered effort underway to analyze and study proposed changes to the way services to people with DD and other disabilities are funded and delivered before those changes are enacted into law. 

Here is more information on Section 298 and proposals that would have made drastic changes in Michigan's mental health system.