Michigan Scraps Contentious Mental Health Pilots

Controversial pilot programs that aimed to integrate behavioral and physical health care under the Michigan Medicaid program have been scrapped, according to Crain’s Detroit Business

Gov. Gretchen Whitmer vetoed the funding set aside to make the pilots possible earlier this month — a move that helped end the programs after years of disagreement and turmoil over how they’d be administered.

The pilots date back to 2016 and then-Gov. Rick Snyder’s executive budget, which included the Section 298 Initiative. The initiative was a state-wide effort to improve integration of Medicaid-funded behavioral and physical health services. 


From there, the idea to merge the funding for both types of services was born. Three pilots to test whether such integrations could save money and improve care were announced in March 2018. 

Most stakeholders agreed on the state’s need to improve its behavioral health system — but the problem was that health plans and mental health providers couldn’t agree on how to best integrate care and make the pilots a reality. 

For example, some wanted to move Medicaid behavioral health services over to a more privately managed system, which Michigan has long done with Medicaid physical health coverage. And the Medicaid managed care health plans that lead the charge on the physical side of things expressed confidence in their ability to successfully to the same for behavioral health. 


However, many behavioral health experts worried that the pilots would lead to worse care for patients. Instead, they advocated for integrating care at the provider level and against allowing Medicaid managed care health plans to be in charge of funding. 

Other areas of disagreement included the automatic statewide scaling of the model and startup costs, according to the Michigan Department of Health and Human Services (MDHHS).

Such disagreements led to the pilots being delayed twice — and then being ended for good earlier this month.

“These pilots were supposed to be built on agreement among all participants,” Robert Gordon, MDHHS director, said in a press release following the news. “After years of work to reach consensus, it has become clear that agreement will not be reached.”

Michigan is expected to outline new proposals to improve the state’s Medicaid-funded behavioral health system in the weeks to come, according to Crain’s.

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