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Integration of behavioral, physical health systems moves forward

State Capitol Building, Lansing, MI
April 23, 2017

Integration of behavioral, physical health systems moves forward

By
Photo by Lindsay VanHulle/Crain's Detroit Business

Michigan lawmakers made it clear last week that they are aiming to go against recommendations from a statewide mental health panel and give HMOs at least a piece of Michigan's $2.6 billion Medicaid mental health budget.

There's a long way to go in the budget process and details remain to be ironed out, but it's an apparent victory for the health plans that has further raised alarm among supporters of the current public system.

Both House and Senate budget subcommittees approved language that would carve out test programs that could lead to a privatization of management of the system through managed care plans, which already administer physical health care Medicaid benefits.

Instead of approving the recommendations of a multi-stakeholder mental health committee known as the Section 298 Workgroup to retain and improve the current public Medicaid mental health system, the appropriations subcommittees rewrote budget language that could lead to more Medicaid health plan involvement in the current public system and consolidation of 10 regional mental health organizations into one superagency.

It is unclear how the Michigan House and Senate will resolve differences between their budgets that resulted in four sometimes conflicting reform proposals. Full House and Senate appropriations committees are expected to meet this week to finalize the Michigan Department of Health and Human Services budgets.

For example, the House subcommittee replaced 2016 budget language known as Section 298 by asking MDHHS for a plan to create a statewide public behavioral health managed care organization. The statewide organization would manage services to nearly 350,000 people served by the current system.

Under the plan, MDHHS would be instructed to come back by next March 15 with an implementation timetable and plan. Currently, the Medicaid behavioral health system is managed by 10 public regional agencies known as prepaid inpatient health plans. In 2014, the state consolidated 18 PIHP regions into 10.

House Appropriations Subcommittee Chairman Edward Canfield, R-Sebawaing

House Appropriations Subcommittee Chairman Edward Canfield, R-Sebawaing, told Crain's that creating a statewide PIHP could improve clinical services and generate administrative savings. Estimates have ranged as high as $200 million annually.

"We don't want to compromise the vulnerable, so we need to move slowly in the process," said Canfield, a family physician.

"The statewide PIHP will contract with the community mental health programs and their providers," he said. "There won't be any changes at the provider level."

Willie Brooks, CEO of the Oakland County Community Mental Health Authority, said moving to a statewide PIHP would be a disaster for vulnerable people served by mental health organizations because they would lose the benefits of local administrative control.

Willie Brooks, CEO, Oakland County Community Mental Health Authority

"Just because you make it one entity doesn't mean you reduce anything. You still have to manage functions and take on reporting and contracting requirements," said Brooks. "It's a terrible idea to reduce (the number of PIHPs), and the people you serve are not having their best interests considered."

The House budget also would ask MDHHS to work with any willing community mental health agency and Medicaid health plan that operates in Kent County to test a full physical and behavioral integrated care plan.

Under that plan, the local mental health agency and one or more Medicaid HMOs would join forces to manage Medicaid patients in that market. However, Dom Pallone, executive director of the Michigan Association of Health Plans, said he wants to ask legislators to tweak the final language to allow for Medicaid health plans to solely manage the integrated pilot program.

Dom Pallone, executive director, Michigan Association of Health Plans

"We also believe that a pilot that removes financial barriers to care by utilizing highly regulated health plans can meet the core values published in the 298 Facilitation Workgroup report," Pallone said.

Canfield said many of the details of the House boilerplate would have to be refined by MDHHS before going into effect and referred questions to MDHHS staff. But officials with MDHHS, who would design the pilot, declined to comment last week.

Meanwhile, the Senate MDHHS appropriations subcommittee approved a new boilerplate and a revised Section 298 boilerplate of their own. The committee voted to continue improving the current system, but also develop an unspecified number of Medicaid health plan pilot programs to integrate behavioral and physical health services and work toward a single contracting model by Sept. 30, 2020.

Under the Senate plan, Michigan's 11 Medicaid HMOs could eventually manage both the state's $9 billion physical health and $2.6 billion behavioral health system. Future state Legislatures would have to approve any final reform plan.

HHS Subcommittee Chairman Jim Marleau, R-Lake Orion, said he supports Medicaid health plan pilots to integrate physical and behavioral health.

"We need a pilot to see how it works with mind and body," Marleau said. "It is very expensive now, and costs are rising. We don't want the system to be more expensive with the same results."

Sen. Mike Shirkey, R-Clarklake

The single Medicaid health plan contracting model and health plan pilot projects were proposed in an amendment by Sen. Mike Shirkey, R-Clarklake. It created a new boilerplate, Section 234, that calls for MDHHS to develop Medicaid pilot projects and a goal to fully turn over funding to Medicaid health plans by 2020.

"We have been dancing around the concept of integration far too long and the Legislature needs to force things to happen," said Shirkey.

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

On reaching consensus on revised House and Senate Section 298 and Section 234 boilerplates to present to Snyder in a budget, Marleau and Canfield said it can be accomplished because all parties want to improve services and reduce state costs.

HHS Subcommittee Chairman Jim Marleau, R-Lake Orion

"We will have to sit down with the House, staff, the fiscal agencies and DHHS and go through the whole thing," Marleau said. "There will be give and take and we will come out with an agreement."

Despite disregarding most of the Section 298 Workgroup, which met last year to come up with a 91-page final report and a 500-page addendum to the legislature, the various competing financing models are seen as a legislative compromise with Medicaid health plans and the public behavioral health service industry.

The House subcommittee also ordered MDHHS to report on progress made during the year by Medicaid HMOs and mental health organizations in improving care coordination for patients with mental illness, developmental disabilities and substance abuse problems.

All Senate and House proposals would follow the 18 core values for patient services established last year by the Section 298 Workgroup. Those include person-centered planning, self-determination and community inclusion.

But 14 mental health advocacy organizations disagreed that turning over state behavioral funding to Medicaid health plans can be accomplished without loss of key services and personal touch.

Last week they sent a three-page letter to legislators and state officials that warned of the dangers of turning over funding to the HMOs. They called for legislators to focus on the workgroup report and improving the current system.

Bob Sheehan, CEO, Michigan Association of Community Mental Health Boards

"We know the (Medicaid health plans) have been lobbying legislators hard. If the Legislature ultimately decides it wants to help these entities make more money at the expense of our constituents, we will do everything we can to prevent that," Kevin Fischer, executive director of the National Alliance on Mental Illness, Michigan, said in a statement.

Elmer Cerano, executive director of the Michigan Advocacy and Protection Services, said legislators should prohibit the transfer of Medicaid dollars to the health plans.

"We are afraid that privatization and profitization of Medicaid is real risky for people with disabilities," Cerano said.

Sheehan said community mental health agencies have been comprehensively improving integration of behavioral and physical health services at the patient level the past two years and should be given more resources to continue their mission.

"I need to remind people that we are at the beginning of a discussion," Canfield said. "We haven't really approved anything, and the governor hasn't signed anything into law."

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April 24, 2017