Michigan Senate panel OKs language that could push Medicaid mental health funding to health plans

A Michigan Senate subcommittee voted Tuesday for budget language that instructs the state Department of Health and Human Services to develop pilot projects for Medicaid health plans to integrate behavioral and physical health and work toward a single contracting model by Sept. 30, 2020.

Under the plan, which has been heavily opposed by the state's current public system of mental health providers and advocates, Michigan's 11 Medicaid HMOs could eventually manage both the state's $9 billion physical health and $2.6 billion behavioral health system. Before the new integrated Medicaid financing and delivery system could be fully rolled out, however, a future state Legislature would have to approve the final plan.

The single Medicaid health plan contracting model and health plan pilot projects were proposed in an amendment by Sen. Mike Shirkey, R-Clarklake, and approved by the Senate subcommittee on health and human services in a 5-0 vote. The committee's two Democratic senators, Curtis Hertel Jr. of Meridian Township and Vincent Gregory of Lathrup Village, passed on the vote.

"We have been dancing around the concept of integration far too long and the Legislature needs to force things to happen," said Shirkey. "We need to define what integration means. It's missing in the (current) boilerplate language."

Shirkey said he looks forward to further discussing integration of Medicaid behavioral and physical health services in the Senate and with members of the House HHS appropriations committee. Rep. Ned Canfield, chair of the HHS appropriations subcommittee, is expected to introduce similar boilerplate language at a hearing Wednesday.

Bob Sheehan, CEO of the Michigan Association of Community Mental Health Boards, said he is disappointed with the vote of the committee and plans to continue to press the case that Medicaid HMOs should not take over the entire Medicaid behavioral health system.

"(Shirkey's) amendment was to privatize (the entire system)," Sheehan said. "Our job is to take seriously the need to integrate care and we will continue to work on that."

Since January 2016, the mental health and Medicaid HMO associations have been at odds because Gov. Rick Snyder's proposed 2017 state budget included a provision that could have allowed the state's managed care organizations to manage the $2.6 billion Medicaid mental health system. Currently, 10 prepaid inpatient health plans, which are operated by the public mental health system, manage the funding and contract with providers.

Mental health advocates have continued to object to HMOs taking over the entire system, and the issue has been contentious the past year.

Dominick Pallone, executive director of the Michigan Association of Health Plans, said Shirkey's amendment opened the door to the first step, Medicaid health plan pilot projects, during fiscal 2017, which starts Oct. 1.

"The pilots could begin at any time. We are very happy. The amendment clearly points, while not exclusive, that not only we can do demo models, but we move forward with a single contracting model with licensed health plans," Pallone said.

In Section 234, which is a new boilerplate addition to the fiscal 2017 HHS budget, the department was instructed to advance pilots and demonstration models that integrate Medicaid behavioral and physical health benefits.

"In fulfilling the directive described in this section, the (HHS) should periodcally consult with stakeholder groups, the medical care advisory committee, and the House and Senate appropriations subcomittees on the department budget."

Shirkey's amendment said the following: "The demonstration models are based on a goal to achieve total Medicaid benefit and financial integration by Sept. 30, 2020, that will rely on a single contracting model between the state of Michigan and licensed health plans, regulated by both the Department of Insurance and Financial Services to assure financial viability and the department to assure overall programmatic performance."

Pallone, contacted by Crain's minutes after the Tuesday 3 p.m. vote, said he needs to further study how the revised Section 298 works with the new Section 234 and Shirkey's amendment.

"There is some language that (mental health) advocates might say the system shall be built among the core values that disallows health plans," Pallone said. "We disagree with that interpretation."

But Pallone said the goal of total integration could happen by Sept. 30, 2020, but it could happen sooner. "There is nothing to prevent it if the Legislature" approves, he said.

In rewriting Section 298, the Senate appropriations committee proposed the following:

"(MDHHS) shall continue working with stakeholders to improve the coordination of publicly funded physical health and behavioral health services in this state. All efforts made toward improving the coordination of supports and services for persons having or at risk of having intellectual disabilities, developmental disabilities, substance abuse use disorders or mental health and physical health needs shall be held upon the published core values agreed upon by the workgroup established in Section 298 of article X of the 2016 PA 268. These values include, but are not limited to, person-centered planning with the expectation of high quality and consistent care provided statewide."

"Senate panel OKs language that could push Medicaid mental health funding to health plans" originally appeared in Crain's Detroit Business.