Sheehan said the state's plan "paves the way for giving this management role to a single private managed care firm."
Fischer said mental health advocates recommended a single statewide PIHP to manage the state's Medicaid behavioral health system.
That recommendation was ignored by the Legislature because it didn't include the health plans," Fischer said. "The legislature has put MDHHS in this terrible position of trying to now make lemonade with rotten lemons. This is not fair to the people we serve, or the selected pilot sites."
In a recent letter to mental health stakeholders, Sheehan said that by adding the unenrolled Medicaid population to the pilot projects, the state "unnecessarily disrupts the operation of the current PIHPs, in those pilot regions, with no benefit to the enrollees nor the service delivery system."
Contracting with a single statewide PIHP does not help community mental health agencies in the pilot communities or those served in the behavioral health system and potentially weakens the existing system, Sheehan said.
"Such a change adds a new payer to the system in these pilot communities — one that was not intended by the budget boilerplate nor the CMHs selected for the pilots," he said in the April 5 stakeholder letter. "It simply adds another clouding variable to this effort and further erodes local control of the system."
Dan Russell, CEO of Genesee Health System in Flint, one of the agencies selected for the pilot, said the MDHHS threw the pilot regions a curve ball by requiring them to contract with a public PIHP to manage the unenrolled Medicaid population.
"We didn't see it coming. We have a number of concerns and are still digesting it," he said. "They want us to exclude from the pilot the financial and clinical integration" of the unenrolled Medicaid population.
Russell said GHS already is negotiating with six Medicaid health plans in the pilot and working through the details of the 298 integration. "We are concerned about administrative burden and adding another layer onto that by contracting with a statewide PIHP," he said.
But he said GHS will make work however MDHHS wants to conduct the integration pilots.
"We have a history of being on the cutting edge, taking risks, and they usually pay off," Russell said. "We are the only agency that has a (federally qualified health center). We do things out of the box. If the state wants to do this, we want to be part of it."
Sheehan said the mental health agencies asked the state to allow them to manage the unenrolled Medicaid members instead of having to deal with a new PIHP in the market.
"This is just one more example of the department taking actions against the wishes of the system's stakeholders and without discussion with those stakeholders," Sheehan said.
Kurdunowicz said the department wants to address mental health organization concerns over the pilots. But he said the department has a longer-range goal in mind to move the unenrolled Medicaid population into managed care programs.
"The health plans have tried to enroll this population, but can't do it now (because of federal law). These people have very specific medical conditions that doesn't yet work in a managed care framework," Kurdunowicz said. Federal waivers would be needed to put the unenrolled into a managed care framework, he said.
For now, MDHHS is working with the three pilot programs and one demonstration project to help them prepare to test coordination of physical and behavioral health. Besides GHS, the others are Saginaw County Community Mental Health Authority, and a joint pilot with the Muskegon County Community Mental Health (HealthWest) and West Michigan Community Mental Health.
A fourth test site is a demonstration project in Kent County that is under development between Network 180, a Grand Rapids-based mental health agency, and Priority Health in Grand Rapids.