Michigan Medicaid: What The Future Might Hold

Two potentially significant changes to Michigan’s Medicaid Program were introduced in the last two months. On December 4, 2020, Robert Gordon, director of the Michigan Department of Health and Human Services, announced a proposed revision to Michigan’s behavioral health system, moving toward specialty integrated health plans for certain Medicaid beneficiaries. On January 30, 2020, the Centers for Medicare and Medicaid Services announced that it is inviting states to participate in a unique funding program that will allow them to receive funding under an aggregate or per capita financing model for certain Medicaid populations, intended to relieve states from complying with certain Medicaid provisions currently imposed by CMS. While implementation of these two initiatives is several years away, they show a push by both the state and federal Medicaid programs to move away from the traditional fee for service model.

Michigan’s move towards the specialty integrated health plans for behavioral health services, referred to as SIPs, has been in the making for several years. Formally known as the 298 initiative, it was introduced by the Department Health and Human Services under former Governor Rick Snyder as an effort to consolidate coverage for severely mentally impaired and intellectually developmentally disabled Medicaid beneficiaries. The current delivery model involves a two-payer system, with beneficiaries receiving behavioral health services through one of the public Pre-Paid Inpatient Health Plans, and their physical health services through a Medicaid Health Plan. The goal of the 298 initiative was to integrate the delivery of Medicaid services by consolidating the payment and delivery of services through the Medicaid Health Plans. Governor Gretchen Whitmer eliminated funding for the 298 initiative last year.

Director Gordon’s proposed specialty integrated health plan model is based on the work that was done to try an implement the 298 pilot projects. The Department of Health and Human Services’ goals in moving toward the SIP delivery model are to broaden access to quality care, improve coordination, cut red tape and increase investments and financial stability in behavioral health services. The Department envisions three to five SIPs that will offer coverage state-wide, and by way of a letter to Community Mental Health Association of Michigan, dated January 7, 2020, has shown its support to have at least one of the SIPS be run by a public behavioral health organization. The Department’s goal is to have the first SIPs up and running by October 2022. More information can be obtained by going to https://www.michigan.gov/mdhhs/0,5885,7-339-73970_5093_96724_96726—,00.html.

The Center for Medicare and Medicaid Services announcement of a move towards an aggregate or per capita financing model for certain Medicaid programs and respective beneficiaries has been in the works for several years. The new opportunity for states is referred to as the Health Adult Opportunity (HAO) initiative and is being implemented as a demonstration project under section 1115(a)(2) of the Social Security Act. States currently receive what is technically known as State Family Assistance Grant funding, often referred to as TANF funding (Temporary Assistance for Needy Families) for federally funded social welfare programs other than Medicaid. The move towards a grant funding model for Medicaid services by The Center for Medicare and Medicaid Services is intended to let state programs drive reforms to the current model of delivery of Medicaid services. CMS believes this will lead towards better health outcomes and provide federal taxpayers with greater budget certainty. The HAO intuitive is intended to allow states more flexibility and discretion than what is currently allowed under the Medicaid rules. CMS’ letter to state Medicaid Directors introducing the HAO initiative can be found at https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/smd20001.pdf

While there has been a lot of talk both at the state and federal level on Medicaid reform , the recent introduction of the SIP movement by the state of Michigan and the HAO initiative by CMS suggests that the talk we have heard over the years is moving towards reality. As a result, Medicaid providers and beneficiaries need to make sure that not only that their voices are heard by government regulators during this proposed development and transition, but they must also be ready to adjust to the new model of care that will be introduced. For additional information or assistance please contact Rolf Lowe, Esq. of Wachler & Associates at (248) 544-0888.