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HealthWest Responds to State’s Proposal to Terminate Contract with Lakeshore Regional Entity

State of Michigan Issues Proposal to Terminate Contract with the Lakeshore Regional Entity

The proposal would eliminate local control of the public mental health system

 

On Friday, June 28, the Michigan Department of Health and Human Services (MDHHS) issued a proposal to terminate its contract with Lakeshore Regional Entity, effective September 30, 2019.  The proposal would eliminate local control of the public mental health system and inject unnecessary chaos when simpler, more rapid solutions exist.

 

The Lakeshore Regional Entity (LRE) is the publicly managed Prepaid Inpatient Health Plan (PIHP) that manages the Medicaid behavioral health benefit for Muskegon, Allegan, Kent, Lake, Mason, Oceana, and Ottawa counties.

 

Since February 2019, the LRE has partnered with Beacon Health Options, a private managed care organization, to manage the behavioral health benefit. The state’s proposal to terminate the LRE’s contract indicates that the state would contract directly with Beacon Health Options to manage the benefit beginning on October 1, 2019.

 

This announcement comes after years of inadequate mental health funding from the state, which has put local Community Mental Health Service Programs (CMHSP) and county governments under severe financial strain.

 

A study released earlier this year by the Community Mental Health Association of Michigan revealed a $150 million gap between the cost of health care and the funding provided to Michigan’s public mental health system.

 

The Community Mental Health Association of Michigan issued an action alert earlier this week asking everyone to contact the Governor and asking West Michigan residents to contact their Senate & House member(s) expressing concerns with this proposed direction of eliminating the public governance and oversight of the Lakeshore area.

 

These financial issues are not limited to the LRE and Lakeshore area. Of the 10 PIHPs across the state, 9 are projecting a funding deficit for FY2019 and 4 PIHPs have no reserve funds to cover the anticipated shortfalls.

 

Since FY2015, revenue increases received by the LRE have not even kept pace with inflation despite a growing number of people being served by its member CMHSPs.

 

If the LRE had received the same level of rate increases as those PIHPs not suffering such financial distress, the LRE’s revenues would have been $49 million greater in FY2018. Ultimately, adequate funding by the state would have prevented the financial distress currently faced by the LRE.

 

“These financial problems are caused by the state’s refusal to properly fund the public mental health system,” said HealthWest Executive Director Julia Rupp. “Today’s proposal is the state’s way of simply trying to shift the blame for a problem it created.”

 

HealthWest, a department of Muskegon County, is the local Community Mental Health Service Program and is responsible for providing government-mandated services to Muskegon County residents on Medicaid with a serious mental illness, developmental disability, serious emotional disturbance, and/or co-occurring substance use disorder.

 

The state’s proposal would also eliminate local control of the mental health system. Currently, the LRE’s board includes individuals appointed by the counties it serves. The state’s proposal would eliminate this board and replace it with an advisory board formed by the state.

 

“Local public governance has been the foundation of Michigan’s mental health system for the past 50 years,” said Rupp. “The health and wellbeing of Michigan residents have too often suffered when the state has removed local control.”

 

Rather than canceling the LRE’s contract, MDHHS should join the LRE and Beacon in co-managing the Medicaid benefit, require changes in the LRE Board of Directors, and change the role of the LRE staff in its partnership with Beacon.

 

This proposal would achieve the outcomes sought by MDHHS; maintain the momentum achieved by the LRE, Beacon, and the CMHSPs in the region; maintain local public governance of the mental health system; and prevent the unnecessary chaos the MDHHS proposal would create.

 

Despite the continued lack of adequate funding, HealthWest is committed to continuing to provide quality services to community residents in need.

 

For more information on Michigan’s mental health system underfunding, visit https://cmham.org/systemic-underfunding-of-michigans-public-mental-health-system/. To learn more about HealthWest, visit www.healthwest.net.