Michigan 2018: Making Sense of the political landscape for people with disabilities, Part 3

This is a continuation of “Making Sense of the political Landscape…” based on a PowerPoint presentation by Alan Bolter, the Associate Director of the Community Mental Health Association of Michigan (CMHAM) and his oral presentation at a Town Hall meeting at Washtenaw County Community Mental Health on 11/15/18.

Here is how the CMHAM describes itself: 

"Community Mental Health Association of Michigan (CMHAM) is a trade association representing the 46 Community Mental Health Boards, 10 Prepaid Inpatient Health Plans, and more than 90 provider organizations that deliver services to adults with Mental Illness, children and adolescents with emotional disturbances, persons with Intellectual/developmental disabilities, and those with substance use disorders in every community across the state." 

"Part 3" gets into the nitty gritty of Medicaid funding for people with disabilities, some of which I do not understand, but then I am not alone. Many people dealing with this important benefit for people with disabilities are at times at a loss to explain Medicaid policies and why and how they are what they are. The following includes excerpts from the PowerPoint with a few notes of explanation thrown in and links to more information.

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Budget Issues/Medicaid Underfunding

Budget impact due to Medicaid enrollment shift – Shift of DAB Population

• Since FY16 our members have seen a significant shift in Medicaid enrollment involving individuals identified as Disabled, Aged, and Blind (DAB) moving to Healthy Michigan Plan (HMP) & Temporary Assistance for Needy Families (TANF) programs. Our members conducted a study that showed nearly 42,000 individuals in FY16 & FY17 categorized as a DAB and are now categorized as HMP or TANF, which has resulted in nearly $100 million in lost revenue to our PIHP system.  [This loss of funds reflects the difference in Medicaid reimbursement to CMH agencies under these programs. Reimbursement to a CMH from the state is much less if an individual is identified under the Healthy Michigan Plan (Michigan’s Medicaid Expansion for people with an income above the poverty level) than under the DAB program.] 
• The base rate amount for a DAB enrollee payment is $266.90, which includes state plan ($135.84) & 1915 (b)(3) ($131.06) (x age & gender x geographic region). The base rate for a Healthy Michigan enrollee is $29, while each TANF enrollees is $15.28. [Michigan has a modified managed care system that reimburses CMH's based on how many individuals are eligible for services under various categories plus other factors.

[See the PowerPoint on Budget Shortfalls not just a DAB issue - other Medicaid factors that describes a systemic funding problem creating a budget deficit of $133 Million "that is causing fiscal and client services difficulties across the state."]

Medicaid Funding Issues Moving Forward 

Community expectations and State requirements continue to grow.

• Increased requirements for independent living settings (HCBS) 
• more jail diversion and reentry requirements 
• housing and crisis stabilization programs 

Insufficient Medicaid funding

• Medicaid enrollment shifts (DAB issue) 
• 2-year look back for rates(does not allow for real time adjustments) 
• staffing costs continue to rise (minimum wage increases) 
• insufficient rates for both Healthy Michigan and autism have lead to an erosion of the Medicaid benefit in some areas. 

Failure to fund federally required contributions to PIHP/CMH risk reserves.

• ISF [Internal Service Fund - I think this has something to do with holding money in reserve to cover unexpected expenses?] Contribution - Late in the budget process we recommended to include, in the FY 19 Medicaid rates paid to PIHPs, revenue to support reasonable contributions, by the PIHPs, to their ISFs, as is done with any at-risk health plan. 
• Recent Medicaid rate certification letter indicates (for the first time in a certification letter) that a portion of the administrative costs provided to the PIHPs is intended for a risk margin, the amount (0.75% for DAB, the largest component of the PIHP’s revenue), this level of risk margin is far too low given the 7.5% risk corridor. If the ISF were never used, it would take a PIHP ten years to fund the 7.5% needed to share risk with the state. 

[For some unknown reason the amount of funding sent from the state to fund CMH services is $133 Million less than is actually spent. Mr. Bolter speculated that it may have to do with dollars being moved around within the Department of Health and Human Services, but he could not say for sure. In other words $$’s sent out from the state is less than what is actually spent. The deficit caused by this is $133 Million. in a system that is not allowed to have deficit spending.]

What does the Future Hold?

We would expect to see more of a deliberative (slower) process in Lansing.

• Budget process should slow down 
• Completed in June? Governor Snyder and Republican legislature completed all 8 budgets in June. 
• Return to [former Governor] Granholm vs Republican budget process? State budget process not completed until deadline 

Section 298 – what will Governor Whitmer do? [Under Section 298, the Michigan Legislature directed the department of HHS to develop a set of recommendations regarding the most effective financing model and policies for behavioral health services for individuals with mental illnesses, intellectual and developmental disabilities and substance use disorders - it has created a boatload of controversy.] 

• Regardless of 298 direction expect change 
• Too much $$ at stake and involved 
• National movement/trends in health care 
• In 2020 the Medicaid Health Plan managed care contract can be revised - Signed in 2015 – 5-year contract w/ three 1-year extensions available. 

Governor – Elect Whitmer’s To-Do-List (in the next 60-100 days)

• Hire executive office staff 
• Appoint cabinet members (Department Directors) 
• Write an Inaugural Address 
• Write a state of the state speech 
• Write/develop FY20 state budget 

Useful Information to stay informed

Michigan Votes – plain language descriptions of every bill, amendment, and vote that takes place in the Michigan legislature.

Michigan Legislature – copies of the bills, find the status, summaries, etc.

Michigan House of Representatives & Michigan Senate – find legislative contact information, committee and session calendars, and you can watch committees and session live.

Contact Information: Community Mental Health Association of Michigan 

• Alan Bolter, Associate Director  
• abolter@cmham.org 
• (517) 374-6848 

[Additional information: Work is under way to replace the Caro psychiatric facility in Tuscola County with a new facility that will increase the number of psychiatric hospital beds from 150 to 200.]

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See also MI Political Landscape 2018, Parts 1 - 3

Michigan's CMH system: Facts and Figures