(MENAFN- GlobeNewsWire - Nasdaq) legal Action Seeks to Protect Services and Secure Fair Contract Terms
LANSING, Mich., Dec. 18, 2024 (GLOBE NEWSWIRE) -- Michigan's public mental health plans, known as Prepaid Inpatient Health Plans (PIHPs), have filed a lawsuit against the Michigan Department of Health and Human Services (MDHHS), accusing the department of imposing unnegotiated contract terms and threatening to cut off funding. These plans argue MDHHS's actions violate state law and jeopardize mental health and substance use disorder services for thousands of Michiganders.
The state's PIHPs, as public health plans created by the state's counties and public Community Mental Health Centers (CMHs), are members of the Community Mental Health Association of Michigan (CMHA).
This week, a lawsuit was filed against the MDHHS to stop the organization from cutting funding and terminating contracts. The department has been trying to force unfair contract terms on these plans, terms that could make it nearly impossible for them to continue serving Michigan residents.
“This isn't just a contract dispute-it's about ensuring the stability of behavioral health services that families across the state rely on every day,” said Robert Sheehan, Chief Executive Officer of Community Mental Health Association of Michigan.
Violation of Michigan Mental Health Code
MDHHS's actions undermine the Michigan Mental Health Code, which requires the department to contract with and fund Community Mental Health Services Programs (CMHSP). The law ensures that mental health services remain locally driven and tailored to the people they serve. By threatening to terminate contracts with PIHPs, MDHHS disregards this mandate, creating chaos in a system designed to protect individuals with mental illnesses, developmental disabilities, and substance use disorders.
Proposed MDHHS Contract Changes Threaten Stability and Equity in Michigan's Mental Health System
1. Risk Reserves at Risk
MDHHS proposes capping public mental health plans' risk reserves at 7.5% of annual revenues, disregarding actuarial recommendations and the plans' need to manage historic and future financial risks. Public plans advocate for maintaining the current contribution limit while ensuring reserves are actuarially sound to safeguard fiscal stability.
2. Harmful Settlement Terms
Proposed contract language requires public plans to implement terms from a lawsuit settlement that disproportionately benefits a small subset of Medicaid recipients. This raises wages for a fraction of direct care workers, worsening Michigan's worker shortage, distorting the labor market, and leaving most residents without improved access to care. The move could trigger further lawsuits, escalating costs without addressing systemic wage gaps.
3. Conflict with Managed Care Responsibilities
New MDHHS language creates conflicts for public mental health plans in their work with Certified Community Behavioral Health Clinics (CCBHC), undermining their ability to meet state-mandated managed care responsibilities effectively.
Why This Matters
The public behavioral health system serves hundreds of thousands of Michiganders, including vulnerable populations with complex needs. MDHHS's unilateral changes to the contracts risk destabilizing this system, creating funding gaps, and worsening an already critical shortage of direct care workers. Without intervention, Michigan faces imminent risks such as service disruptions, workforce shortages, and system instability.
“We're standing up for fairness, fiscal responsibility, and most importantly, the people who depend on these services,” said Sheehan.“Michigan families deserve better.”
For more information, contact:
Taylor Morris
Media Relations Senior Associate, Lambert by LLYC
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