One side is advancing boilerplate to halt or prohibit the state’s current PIHP procurement, preserving existing structures while calling for a stakeholder workgroup. The other has drafted their own boilerplate emphasizing program protection, anti-retaliation safeguards, fair contracting, uniform standards, and oversight to ensure funds reach communities. Both sides agree the system needs restructuring, but diverge sharply on how to achieve accountability, reduce conflicts of interest, and simplify care.

Pull Up Your Chair & Let’s Start the Conversation.

Redesign

PIHPs and Providers Outline Different Paths for Behavioral Health Reform 

In a recent email to members, the Community Mental Health Association of Michigan (CMHAM) expressed hope in its plans to halt or pause the procurement efforts of the Michigan Department of Health and Human Services (MDHHS) to reduce the number of Prepaid Inpatient Health Plans (PIHPs) from 10 to three and preserve the current structure with PIHPs in control. The association outlined two forms of boilerplate language being discussed. One seeks to pause the RFP during the current fiscal year and require MDHHS to convene a workgroup of stakeholders. 

The other option would prohibit MDHHS from spending funds on any procurement process related to PIHP contracts and require it to continue contracting with existing entities in their current structure. CMHAM told members its competing message has two parts: the system needs to be dramatically restructured, and the current procurement is not the right way to accomplish that.

Providers, while sharing concerns about the complexity of the system, are advancing their own boilerplate language designed to protect community-based care during any transition. Their proposals emphasize three themes:

Protecting providers and programs

Ensuring fairness and accountability

Improving consistency and oversight

These priorities are aimed at reducing conflicts of interest, creating fairer contracting conditions, and ensuring that appropriations reach the communities they were intended to serve rather than being absorbed by administrative costs. 

The department’s RFP, issued earlier this year, set goals of improving access to timely services, increasing transparency, and simplifying the system. Providers note that these objectives align with their own call for a streamlined structure that allows them to focus on delivering services to people with mental illness, substance use disorders, and developmental disabilities. 

For PIHP advocates, pausing procurement maintains current structures while opening the door to shaping a redesign through a workgroup, their way. In doing so, the PIHP lobby wants to pause the process to maintain its control and the status quo and delay any reform. Providers argue that any modernization must address the structural conflicts of interest that occur when PIHPs act as both payor and provider, controlling funding while also competing with community nonprofits for services. For both sides, advocacy continues.

Accountability in Michigan’s Behavioral Health Redesign

In conversations with legislators, one concern keeps coming up: if nonprofit health plans are selected as the new PIHPs under the MDHHS redesign, will they be accountable to the public in the way government entities are?

It’s a fair question. The current system has shown us the risks of weak accountability. PIHPs have been known to retaliate against providers, withhold state funding, build up reserves, and create excessive administrative demands, all without sharing the data needed to improve care in Michigan’s communities. That lack of transparency has frustrated providers and undermined trust.

The RFP (No. 250000002670), the State’s responses to bidder questions, and Amendment 5 (released September 12) make clear that MDHHS has built in stronger safeguards to prevent those problems and require new PIHPs—whether nonprofit health plans or other entities—to operate with government-level transparency.

These safeguards don’t erase every concern. Providers remain worried about the demands PIHPs may place on them during the transition period, and additional state oversight will be needed to keep implementation on track.

But the shift signals a stronger framework for accountability than what providers experience today. And it opens the door for a conversation about how we can build not just a new contracting structure, but a culture of transparency that puts people and providers first.

Recent Media on Rebid

MDHHS Director Elizabeth Hertel on House Republican budget

Michigan’s behavioral health system could take a direct hit under the House Republicans’ proposed budget, which strips nearly $5 billion from MDHHS and eliminates more than 1,600 staff positions across the department. Cuts include $6.8 million to state psychiatric hospitals, jeopardizing already thin staffing and delaying the opening of a new psychiatric facility in Northville slated for 2026—moves that would lengthen wait times and weaken the state’s ability to respond to a mounting mental health crisis. But the damage doesn’t stop there: the proposal wipes out adult dental coverage, trims maternal health programs, closes the Office of Community Violence, and reduces homelessness funding, while threatening Medicaid coverage for thousands of rural residents. For providers, the plan underscores the fragility of Michigan’s health infrastructure—behavioral health included—at a moment when demand is surging and the system is struggling to keep pace. Source MDHHS.

Read More,

Workforce

$2.4-million grant helps Detroit Mercy train behavior health professionals, University of Detroit Mercy 

Openings + Mergers

Funding

When Grants Signal What’s Next in Behavioral Health

The Michigan Health Endowment Fund just put $6.8 million behind 20 behavioral health projects, and the choices say as much about the future of care as the dollars themselves. Look closely and a pattern emerges: the state’s most influential health funder is pushing behavioral health out of clinics and into everyday life—homes, schools, tribal communities, refugee resettlement centers, and even friendship benches. 

For providers, the signal is clear. Access is no longer defined by whether a clinic has open slots. It is about whether behavioral health shows up where people already are. Grants to two Area Agencies on Aging point to a shift that has long been overdue—bringing in-home behavioral health to older adults who may never walk through a clinic door. In Detroit, new resources are going into retention strategies for older adults with substance use disorders, while Samaritas is expanding women’s specialty services. Across tribal communities, trusted adults are being trained as gatekeepers to intervene in youth suicide risk, while elders, parents, and teachers are shaping whole-community strategies to support Indigenous youth.

Youth remain at the center of innovation. MSU’s Project THRIVE is piloting ways for Flint teens to access behavioral health in everyday life, while peer-to-peer supports in the Great Lakes Bay Region and a statewide review of social-emotional learning show a growing expectation that schools and youth-serving agencies are not just partners, but key platforms for mental health delivery. On the technology side, Easterseals MORC is testing digital tools to improve care quality, and Wayne State is piloting new approaches to behavioral health emergency response—projects that speak to a system under pressure to modernize.

Taken together, these grants are less about one-off projects than about testing what it means to move behavioral health into the fabric of community life. Yet they don’t exist in isolation. At the same time, the Michigan Department of Health and Human Services is rewriting the rules for how care is managed, who contracts with the state, and how conflict-free oversight will work under a redesigned PIHP system. The redesign is about payment and structure, while the Fund’s portfolio is about ideas and proof points. Both are operating on parallel tracks, but they are aimed at the same destination: a system that is less fragmented, more accountable, and closer to the people it serves. 

For providers, this parallel movement creates both opportunity and uncertainty. The Health Fund is underwriting R&D, seeding the kinds of models that could become the new standard. The redesign, still in motion, will decide whether those models are reimbursed, replicated, or left behind. If the two efforts converge—if pilots like in-home behavioral health, school-based prevention, and culturally rooted suicide prevention become embedded in Medicaid contracts—the system may finally shift from managing crises to sustaining wellness. If they do not, providers will be left with promising but precarious programs that lack the financial foundation to survive.

In Michigan, the future of behavioral health is being written twice—once in the fine print of the RFP, and once in the stories of communities testing new ways to deliver care. The question is whether those two scripts will come together to form a single narrative of transformation, or whether they will remain side-by-side experiments. For providers, the time to pay attention is now, because the direction of both tracks will determine not only how care is delivered, but how it is sustained. Source: Michigan Health Endowment Fund

Other Funding Announcements

Governor

Mental Health Diversion Council

David BOYSEN, of Kalamazoo, is the chief of Kalamazoo Public Safety. Previously, Boysen was an assistant chief of public safety, and the captain of community safety and problem-solving for Kalamazoo Public Safety. His term starts Sept. 18 and ends Jan. 30, 2029. He succeeds Troy GOODNOUGH, whose seat changed. 

Autism Council 

Krista ORELLANA, of East Grand Rapids, is the vice president of growth and chief clinical officer at Acorn Health. She was reappointed. Her term starts Oct. 1 and ends Sept. 30, 2029.

*The appointments are not subject to advice and consent of the Senate.