LANSING – Disagreement and grudges remain as Gov. Rick Snyder’s administration nears its deadline for a new proposal on who will manage the state’s more than $2 billion in annual Medicaid dollars for behavioral health.
In February, without any of the workgroups, pilots and forums that typically precede such a fundamental shift, Snyder said management of the behavioral health dollars should be taken away from public mental health groups and given to private health management organizations, who already manage physical care payments.
That plan was scrapped after an uproar from mental health groups and lawmakers of both parties.
Instead, the Legislature gave the state Department of Health & Human Services until Jan. 15 to propose a new funding scheme that will encourage better coordination of physical and behavioral care while maintaining community-based services and transparency. But DHHS hopes to have a draft proposal ready by Nov. 28, a deadline that’s already been pushed back once.
It’s a consequential decision. Whoever manages those funds makes “all the decisions on what to cover … using their networks of providers,” then-DHHS policy director Elizabeth Hertel, who recently took a job with Livonia-based hospital company Trinity Health, said last month.
Representatives of behavioral health groups and HMOs say the debate has calmed some since February. But the two sides are still trading barbs and hurling conflicting analyses and remain suspect of the other side’s motives as they work with DHHS toward a new plan.
Snyder’s original rollout “created a firestorm,” said Rick Murdock, the executive director of the Michigan Association of Health Plans. “I don’t think we’ve recovered from that yet.”
‘$2.4 billion can cause you to miss the point’
Several people from the behavioral health camp — made up mostly of public community mental health organizations and private, nonprofit advocacy groups — said they welcome better coordination with physical health care.
At least 39% of Medicaid and Medicare patients with physical health ailments also have a mental health condition, according to a 2014 federal study.
But they said coordination happens at the clinics, hospitals and homes where patients are treated, not in the boardrooms where payment and coverage decisions are made.
And they said giving the money to HMOs, a mix of nonprofit and for-profit companies, raises several concerns, chief of which is that the HMOs will make decisions based on profits instead of patients.
They point to a recent study, commissioned by the Michigan Association of Community Mental Health Boards, that found no “single financing model is consistently associated with cost savings” and care is most improved by changes where doctors interact with patients.
That study also pointed to other studies showing “a privately administered insurance is intrinsically more expensive” because they have administrative expenses such as sales and marketing.
But Murdock noted the HMOs fall under strict oversight from both the state and federal government, who require accessibility and standards of care. And he pointed to the accrediting firm the National Committee for Quality Assurance, which rated six of 10 Michigan Medicaid HMOs an overall 4 out 5 on their most recent review, which includes a measurement of patient satisfaction.
But Dohn Hoyle, director of public policy at the advocacy group the Arc Michigan, said there’s a reason behavioral health was carved out of Michigan’s move to HMOs under Gov. John Engler in 1990s. He said behavioral health care, especially for persons with developmental disabilities, often requires an intense level of treatment that goes beyond ailments to helping with quality of life issues such as cooking and cleaning. Persons with disabilities “have never fared well with the medical care system,” he said.
“I think $2.4 billion can cause you to miss the point,” Hoyle said. “(HMOs) don’t have an argument that holds water with me, at all.”
Murdock said HMOs would still be required to contract with the community mental health groups currently providing services and the Legislature has required that any funding shift address continuity of care for patients.
Finally, behavioral health groups said taking money from the public mental health organizations will reduce transparency in the management of billions of taxpayer dollars.
When the chief executive of the mental health group in Calhoun County was fired for giving Medicaid dollars to a mysterious Florida psychic, for example, the state’s Open Meetings Act allowed a Battle Creek Enquirer reporter to attend the organization’s board meetings and the state’s Freedom of Information Act allowed the newspaper to obtain illuminating records.
Those laws do not apply to the private HMOs.
Murdock, however, said there still will be a public grievance process for patients who feel they’ve been wronged, and the HMOs have to report voluminous amounts of data to the state and federal government.
“I recognize there are some state programs that don’t have strong oversight,” Murdock said. “This one does.”
All of those disagreements are deep-seated and decades-old, and people on both sides of the issue said Snyder’s February budget bomb may have made it more difficult to reach an amicable agreement.
Murdock said “integration is going to happen,” one way or another. “A perfect storm” of budgetary pressures are building around Medicaid, the so-called “Pac-Man of budgets” because it takes up such a huge piece of a spending pie chart, he said.
The federal government is rolling back its investment in expanded Medicaid and is tightening rules about the kinds of taxes states can dedicate toward Medicaid costs. At the same time, new spending on roads and other issues is eating up more the state’s general fund, which has always subsidized Medicaid.
Against this backdrop, the administration saw dual benefits in giving behavioral health dollars to HMOs: It could improve coordination, the administration said, and produce administrative efficiencies by removing a group of overseers.
But, when Snyder’s budget proposal in February said DHHS “shall” shift the money to HMOs by Oct. 1, “it was a very clumsy way of moving forward,” Murdock said.
Lt. Gov. Brian Calley, whose daughter has autism and who is himself an advocate for persons with disability, created a “298 workgroup” — taking its name from the section of the DHHS budget dealing with the issue — after the original budget proposal. In July, that group issued a report on “core values” that should inform the debate going forward, including that whatever model is developed should be “person-centered” and “family-driven.”
Around the same time, DHHS began its own 298 workgroup, as required by the language the Legislature approved in place of Snyder’s original request. But several people from the behavioral health side felt hoodwinked — in August, several walked out of a meeting — because they felt DHHS was ignoring the principles developed by the Calley group.
Murdock said the Calley group was lopsided with voices from the behavioral health side.
Those walkouts have since returned to the discussions because “we’ve gotten assurance from the state that those (Calley group principles) are going to be honored,” said Mark McWilliams, director of public policy at Michigan Protection & Advocacy Service. “I don’t think anybody’s walked out in the last few meetings.”
Nonetheless, McWilliams said the behavioral health camp is working on its own proposal, even as DHHS begins gathering input from various groups — patients, providers, funders — as it works toward that late-November draft. The department hopes to gather input on that draft before crafting its final proposal by the January deadline.
With bad blood still bubbling, no one is sure what that January proposal will be.
The final Section 298 language calls on the department to “consider the use of one or more pilot programs” and develop benchmarks to measure progress over a three-year period.
Contact Justin A. Hinkley at (517) 377-1195 or [email protected]. Follow him on Twitter @JustinHinkley. Sign up for his email newsletter, SoM Weekly, at on.lsj.com/somsignup.
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