Michigan Receives Federal Approval for Mental Health, Developmental Disability and Substance Abuse Services Plan

Michigan Department of Community Health Director (MDCH), James K. Haveman, Jr., today announced that the Health Care Financing Administration has approved of its plan for Medicaid managed care for specialty mental health, substance abuse and developmental disability services. This plan is required for continuation of a Medicaid waiver the Department of Health and Human Services granted in June of 1998.

"This is outstanding news in our efforts to continue to provide quality services for Medicaid mental health, developmental disabilities and substance abuse," said Haveman. "With this approval, we will continue to assure access and quality for consumers, while maintaining costs at reasonable levels."

In a letter from the Department of Health and Human Services, Health Care Financing Administration Center for Medicaid and State Operations, Director of the Disabled and Elderly Health Programs Group Thomas E. Hamilton stated "We appreciate the State's efforts in continuing this program to provide accessible, quality and cost-effective health care for Medicaid beneficiaries, and wish you much success in your continuing activities in this area."

"I want to personally thank Jeff Patton and Patrick Barrie from the Department, who have dedicated themselves to crafting this plan and working with consumers, health professionals and family members to make it a reality," said Haveman. The Department held several public hearings across the state as it developed this plan and incorporated suggestions from the hearings and written comments into the development of the final plan.

"Receiving this approval from the federal government is a victory for persons with mental illness, developmental disabilities and substance abuse problems in Michigan," said Jeff Patton, MDCH Deputy Director for Mental Health and Substance Abuse Services. "The primary focus of this plan is the needs of consumers and how we can improve service flexibility and choices for individuals in the public mental health system."

Under Michigan's program, nearly all Medicaid specialty mental health, developmental disabilities and substance abuse services have been managed by specialty Prepaid Health Plans. A specialty Prepaid Health Plan is a managed care entity that provides Medicaid covered specialty services under a contract with the state on the basis of prepaid capitation fees.

"Michigan was the first state in the nation to offer this innovative plan," said Patrick Barrie, MDCH Director of the Bureau of Managed Care and Community Services. "We are so pleased that our focus and commitment to quality care has been recognized with this approval."

Under the new plan, a single Prepaid Health Plan will be selected to provide Medicaid specialty mental health, substance abuse and developmental disability services in specific geographic areas. Qualified Community Mental Health Services Programs will be given an initial consideration to operate as the specialty Prepaid Health Plan for a designated service area. However, the state will not offer this initial consideration to all existing Community Mental Health Services Programs as individual, stand-alone organizations.

For a Community Mental Health Services Program to be considered for application they must have at least 20,000 Medicaid beneficiaries within their respective catchment area. If they do not meet this criteria, they may combine with contiguous Community Mental Health Services Programs to make a consolidated application for Prepaid Health Plan designation.

Community Mental Health Services Programs must also meet an extensive set of qualification requirements before being selected as the Prepaid Health Plan. These include administrative and service considerations. Community Mental Health Services Programs must assure that consumers continue to have access to the existing array of services and alternatives available to them and must assist consumers in community participation, integration and inclusion. Community Mental Health Services Programs must ensure service eligibility and demonstrate a network of providers to meet consumer needs.

In Michigan, person-centered planning, is vital for specialty services. This is a process for planning and supporting individuals and including them in the decision making process and the involving family members and others in the process as the individual chooses. To be selected as a Prepaid Health Plan, Community Mental Health Services Programs must facilitate consumer choices and offer external person-centered planning facilitators to assure the needs and desires of the consumer are fully identified. The Community Mental Health Service Providers must also allow the beneficiary to utilize out-of-network providers under special circumstances.

If a Community Mental Health Services Program can not meet the extensive qualification requirements, the Department of Community Health will then move to full and open competition for that specific geographic area. In this situation, both public and private entities meeting the extensive qualification requirements would be allowed to bid in the specific geographic area.

The selection process for specialty prepaid health plans will be conducted by a state-level selection panel made up of state officials and consumer, family and advocacy representatives.

Now that the plan has been accepted by the HCFA, it would have to be implemented no later than October 1, 2002. The plan, as submitted to HCFA, can be viewed on the Department of Community Health website at http://www.mdch.state.mi.us and by clicking on "Mental Health and Substance Abuse."