Idea #1…Improving Behavioral Health Services in Michigan

For years individuals, community groups, education institutions, health systems, and elected officials have been crying out for expanding and improving mental health services.  But yet, there seems at best incremental improvements.  A crisis center comes online.  A new community-based center opens. Education systems create pilot efforts.  But broad access to therapists and support most often depends on one’s health insurance plan, whether it is a commercial plan provided by an employer, or a public one such as a Medicaid Managed Care Organization (MCO), including Healthy Michigan, or a Community Mental Health Service Provider (CMHSP).

One of the unique aspects of Michigan is the Michigan Mental Health Code (i.e. – the Code) which requires CMHSPs to provide emergency mental health services to those in need whether insured or not.  The Code also requires those on Medicaid (including Healthy Michigan) with Severe Emotional Disturbances (SEDs) to receive services from the CMHSP.  At the same time, Michigan has a mental health parity law that requires insurers to provide mental health care just like physical health care.  Therefore, individuals with mild and/or moderate mental health needs are served through their healthcare insurance…. commercial or public.  And those with commercial insurance also receive SED  benefits as described in their health insurance plan. (See Figure A)

These two public systems:  CMHSPs for emergency and SED care, and healthcare plans for mild/moderate care is a fundamental, systemic problem to improving mental health care in Michigan because mental health issues are chronic, meaning they are not resolved like an acute illness such as the flu or a torn ACL.  People are complex and may have a mild depression that grows into a severe one that needs robust services, only to achieve stability which may require moderate services. 

Insurance TypeEmergencyMild/
Figure A

Yet the current public healthcare system and billing procedures can bounce them between systems with insurers pointing responsibility at one another about who pays the bill.  Similarly, by having two discrete systems, insurers are unable to conduct robust utilization review to determine what services are or are not working.  One set of insurers has access to physical health claims with mild/moderate mental health claims, while another insurer has access to SED claims.  This systemic problem harms enrollees (and tax payers) especially when one considers that mental and physical health often go hand in hand, and integration of physical and mental health care shows positive treatment and cost containment results.   

Another problem within the current mental health model is that commercial insurance providers often have just two benefits:  an outpatient benefit (i.e. traditional outpatient therapy) and an inpatient benefit (i.e. mental health hospitalization).  Research suggests that many people need something in the middle.  Examples might be:  Traditional outpatient therapy along with peer recovery services; or An in-home therapy treatment along with case management to address social determinants of health affecting a family.  This type of customized package is not the norm in a commercial mental health environment, but often can be created by a CMHSP that is responsible for those with SEDs on Medicaid because they understand that hospitalization without needed follow up services is expensive and has poor outcomes, while a community based care model can yield better outcomes along with cost savings. 

So what to do?  First, we need to explain a little bit more about the CMHSP system.  Not only does it serve those with an SED.  It also provides:

  • Long term services to individuals with intellectual disabilities (often those with Down’s Syndrome or a similar disease that live in some type of group home),
  • Services for those with Autism (this is a relatively new benefit designed to provide early intervention), and
  • Certain substance use services. 

These services are funded through a combination of sources including, but not limited to:  Capitated Medicaid formulas created by a state paid actuary firm, statewide Liquor Taxes generated by sales in a county (after first paying for TCF Convention Center Bonds), and limited State and local general funds. This service delivery combination occasionally creates challenging dynamics between CMHSP Boards and stakeholders that want funds directed to one group over another.   

Ok, so this is the Idea to Consider….a series of recommendations on how to improve Michigan’s Mental Health System:

  1. Remove Intellectual Disability funding from the CMHSP model, and make it its own system.  Throughout Michigan, different CMHSPs provide different levels of financial support for these services.  It is time to streamline the system and create a more equitable state service model to ensure similar services are provided no matter where one lives in the state.
  2. Remove Autism Services from the CMHSP system, and transfer the funding and responsibility for services to the Intermediate School Districts (ISD).  As a society, we are learning more and more about autism.  One thing that seems clear is that early intervention yields incredible results which can reduce long-term spending on special education services which are funded and/or services provided by ISDs.  Additionally, across Michigan, Intermediate School Districts are seen as the go-to body for early childhood education via the Great Start Collaboratives.  Therefore, moving autism funding and services to ISDs ensures that:
    • As Great Start Collaboratives design early childhood systems, they are creating models to identify potential delays, and then work with families to address needs.  Autism delays are often found through this process.
    • Those with the largest skin in the game related to special education services to support students with autism have an incentive to figure out an early intervention model that yields results because if they do not they will have to pay larger sums later.
  3. Decide if the Medicaid/publicly funded Mild/Moderate Mental Health Services belong in the CMHSP System; or if Emergency/SED Services belong in the Medicaid MCO system.  The current dual system is untenable.  It creates a system that is not accountable to CMHSP Boards, the Michigan Department of Health & Human Services (MDHHS), the Legislature, or people of this State.  CMHSPs can blame the MCOs for having inaccessible mild/moderate services due to having few paneled providers and low payment rates, and therefore flood the CMHSP system with people that could be served with a mild/moderate benefit.  (A commercial Usual Customary Rate for outpatient mental health services is between $85 and $98 per session, while a Medicaid MCO rate is between $45 and $55 per session. Non-profit providers often lose money at this rate.)  Similarly, the Medicaid MCOs can blame CMHSPs for not serving clients effectively by claiming they need services greater than what is ‘mild/moderate’ or not providing emergency services.  This blame game serves no one and needs to be addressed systemically rather than on a case by case basis which takes too much time for patients, and costs too much in administrative inefficiency.
  4. Align Substance Use Services with Decision #3.  There is something in the Mental Health/Substance Use Service literature called Co-Occurring Disorders.  Basically, it states that often mental health and substance use go hand-in-hand and therefore need to be treated together.  By aligning state substance use policy and funding with mental health services, Michigan can create a co-occurring model that meets national best practices for treatment of these diseases.
  5. Expand Commercial Insurance to Include a Benefit Mix Beyond Traditional Outpatient/Inpatient Mix.  To assist Michigan residents that struggle with mental health diseases that require a different service bundle, we need to create a service delivery system that is flexible to meet unique, individual needs.  While it would be ideal for market pressures to push commercial insurers to provide this benefit, it may require legislative action to create this benefit. 

But what to do with Children’s Mental Health Services?

Listen to a teacher today, elementary, middle school or high school…it doesn’t matter, and they will share that children are struggling with emotions.  They need help in different ways, and schools are unsure how to respond since their core purpose is education, not mental health.

Michigan provides a variety of resources to local school districts to support children considered vulnerable.  Among them include:

  • Title I – A federal program operated by states which provides additional funding to eligible Local Educational Agencies (LEAs) to ensure that all children meet challenging state academic standards.  Funding amounts are based on the number of children that receive free and reduced lunch.
  • 31A – A Michigan program that provides additional financial resources to eligible LEAs and Public School Academies (PSAs) for programs focused on student outcomes such as:  attending school regularly, reading proficiently by the end of 3rd grade, being proficient in mathematics by the end of 8th grade, and being career and college ready by high school graduation.
  • 31N – A recently created Michigan program to provide mental health services in schools through Child & Adolescent Health Center (CAHC), school mental health and support services, and behavioral health teams pilots.
  • Caring 4 Students (C4S): An expansion of school-based services reimbursement program intended to support access to nursing and behavioral health services for all Medicaid eligible students.

Beyond these programs are commercial insurance as well as the Medicaid programs described earlier.  Additionally, several ISDs across Michigan have been able to work with their local districts and voters to pass what are called ‘Enhancement Millages.’  Proposal A allows ISDs to place a property tax question before voters in its service area to enhance the per pupil amount of funding received from the State.  Often these millages are used to provide additional programs and services, some of which often support vulnerable children. 

One of the largest challenges facing schools regarding needed student mental health service is that there is not a consistent way to braid the available resources into a coherent service model.  To meet this challenge, it will need all of us to think about changing the way we organize services. For me, the community school model (see http://www.kentssn.org or http://www.nccs.org) has proven successful in linking mainstream community services, like mental health therapy, to schools.  In my mind, just like with Autism Services, the Idea to Consider is this:

ISD throughout the state should be given the responsibility to organize and deliver mental health student services because they:

  • Serve LEAs across Michigan and have direct access to students with needs
  • Understand how to bill Medicaid for eligible special education services, which they can build upon regarding behavioral health service billings
  • Can hire needed program and administrative staff with its economies of scale


To significantly improve the mental health needs of our friends, family, and neighbors, we need to come together and work on meaningful change that benefits the whole.  This means the Michigan Mental Health Code should be revisited by a specific bi-partisan task force that includes representatives from insurance companies, CMHSPs, advocacy organizations, counties, Probate Courts, the Legislature, MDHHS, ISDs, and the Governor’s Office to address:

  • System reform.  We will not see improvements unless we change the system design.
  • Data.  The current system does not allow for comprehensive Utilization Management through data review. 
  • Change Management/Creativity.  Unless we welcome change and become more creative in system design and service delivery, we are not going to see large scale, community improvements.

Please remember that these Ideas to Consider are meant to serve as a catalyst to move a necessary discussion forward. We can do better than we are to meet the real, human needs facing our society. 


  • Feel free to forward this to anyone you think might be interested in reading or considering these ideas.
  • If you have a column idea, forward it to me. Topics I’m working on now include: Taxation in Michigan. Equity and Racialized Outcomes. Land Use/Housing Policy. Government Size & Home Rule History. Child Welfare Reform. Substance Use Funding & TCF Convention Center Bonds. So I have plenty of room for more ideas and thoughts…..got 51 more to go.

One thought on “Idea #1…Improving Behavioral Health Services in Michigan

  1. Scott Dzurka says:

    Great job here Matthew in laying out what is a very complex system with several layers of multiple players involved. There have been several attempts and workgroups to discuss these areas; most resulting in significant changes to the systems. The biggest challenge is how to get leaders to drive for the systems change and not lose momentum to improve outcomes for some of the most vulnerable in society.


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