The real question is whether Michigan can finally move from talking about reform to building a system that truly works for the people it serves. This week we tell you where that change must start, with rebuilding trust, accountability, and a commitment to those on the front lines of care. Pull Up Your Chair & Let’s Start the Conversation.

When a system keeps breaking in the same places, there comes a time when you need to stop patching and start redesigning. That’s where our health care system in Michigan is today.

In an October 25, 2025 action alert to its members, the Community Mental Health Association of Michigan (CMHAM) reaffirmed its commitment to improving Michigan’s public behavioral health system, stating that it “supports meaningful reforms that enhance access and quality of care; however, the current procurement approach introduces serious risks without addressing the system’s core challenges.” Despite Judge Yates allowing the State to move forward with its RFP process to rebid Michigan’s public behavioral health system, CMHAM continues to advance its strategy to pause the state’s evaluation and award of contracts, noting a December 8 court hearing. The PIHP lobby argues that the procurement process violates the Michigan Mental Health Code by excluding meaningful CMHSP and PIHP participation. While the Code itself predates PIHPs and PIHPs are not mentioned in the code, the RFP requires that any new PIHPs contract with CMHSPs within their respective regions. CMHAM also intends to push for legislative amendments to the Code to define future PIHP restructuring and continues to frame “true reform” as focused on funding adequacy, workforce expansion, administrative efficiency, and local accountability, while warning against “privatization,” citing experiences in other states that it says led to higher costs, workforce losses, and reduced access. Workforce issues are important but not relevant to the procurement process. Funding also is important and the legislature should provide oversight so that the funding they appropriate gets to the providers providing care in the community.

It’s encouraging to see the PIHP lobby acknowledge that the system needs improvement. The challenge now is to move from opposition to collaboration, to have an honest conversation about how to transform the system, eliminate conflicts of interest, end retaliatory practices, and open access to care for all Michiganders, rather than protecting institutional reserves at the expense of providers and the people they serve.

It’s time to modernize Michigan’s behavioral health system

Michigan’s behavioral health system is fragmented, politicized, and too easily controlled by entities that were never meant to compete with the same providers they fund. The structure, built on the 1970s Mental Health Code and layered with decades of federal Medicaid contracts, no longer reflects how care is delivered or how accountability should work.

At the center of the problem is structure. The Mental Health Code gave community mental health authorities local responsibility to plan and fund care, while later contracts created regional managed care organizations to administer Medicaid benefits. Over time, those lines have blurred. Many of the same entities that manage public funds also deliver services, conduct needs assessments, and decide who gets contracts. That overlap has created a system where funders hold unchecked control and providers risk losing contracts, referrals, or staff if they refuse to comply with demands that go beyond the law.

This tension is now visible across the state. The Macomb Daily reported that Macomb County Executive Mark Hackel is still questioning the state’s motives after the Michigan Department of Health and Human Services (MDHHS) announced it would outsource the administration of the Prepaid Inpatient Health Plans (PIHPs). Hackel called the move intentional, citing a lack of transparency and warning that the bid process was not set up for counties to compete fairly. His comments have deepened concerns about whether local voices are being heard or sidelined in the transition.

In northern Michigan, 12 community mental health agencies representing 51 counties have filed a lawsuit challenging the new contracting process on October 9, days before the Michigan Court of Claims issued its order allowing the MDHHS to proceed with the procurement process. As reported by the Manistee News Advocate, the lawsuit argues that the state’s new plan “dramatically and detrimentally changes the way mental health services will be delivered and coordinated in the state.” The agencies claim that MDHHS has exceeded its statutory authority and that the changes could disrupt care continuity for thousands of residents.

The redesign offers a chance to repair these problems, but only if it is done with clarity and accountability. Several sections of the Mental Health Code remain open to interpretation, and federal regulators at CMS have already raised concerns about conflicts of interest and weak oversight. Without clear rules, the new system could repeat the same mistakes. What Michigan needs is not another layer of administration but a clear structure for responsibility and oversight.

That begins with reaffirming MDHHS as the single entity accountable for compliance. Managed care administrators should act as contractors, not authorities. They should not compete with providers, direct programs, or pressure organizations to transfer staff or systems. The relationship between funders and providers must be contractual and grounded in fairness, not hierarchy.

To restore integrity, Michigan must close the loopholes that allow administrative bodies to act as both purchaser and provider. Amendments to the Mental Health Code should prohibit funders from delivering Medicaid behavioral health services directly and require all entities to follow federal conflict-of-interest standards. Provider contracts should include independent dispute resolution, good-cause termination clauses, and strong protections against retaliation. Oversight should come from an independent commission with the power to investigate complaints, publish rate-setting data, and monitor transparency in contracting and referrals.

This is not about privatization or politics. It is about restoring trust and ensuring that public dollars reach the people who need care. As Hackel told the Macomb Daily, the process “makes me wonder what is really going on here.” Perhaps he should check in with the providers in Macomb County, to see what programs are closing because providers aren’t getting paid, how much the PIHP in his region has in reserves and how their administrative costs continue to rise. Michigan needs a behavioral health framework that values those who deliver care, not those who control the contracts.

The next legislative session is an opportunity to act. Lawmakers can help create a system that aligns Michigan law with federal standards, protects providers from retaliation, and builds a system rooted in transparency and accountability. Those opposing the state should want a system where people who provide care are empowered to do their work, and those who manage the money are responsible for how it is used.

Revising the Mental Health Code

Michigan’s Mental Health Code was enacted in 1974 to move the state away from institutional care and toward a community-based system. It establshed recipient rights, person-centered planning, and local control through Community Mental Health Services Programs. But fifty years later, that same framework has become a barrier to care. While the law has been amended over the years, it still reflects a 1970s model of care that doesn’t match the realities of today’s Medicaid-funded, managed-care environment.

Since the mid-1990s, every administration, Republican and Democratic, has tried to update or reinterpret the Code. The Engler and Granholm eras focused on shifting resources from hospitals to community programs and giving counties more control. Under Governor Snyder, Section 298 of the state budget tested whether integrating physical and behavioral health could improve outcomes and reduce costs. That effort failed to gain traction, largely because it tried to impose integration from the top down without building trust among providers or clarity around governance and funding.

Governor Whitmer’s administration has approached reform differently. MDHHS is modernizing the system through contracts, policy guidance, and performance metrics. These administrative reforms embed many of the Code’s core principles, person-centered planning, recipient rights, and local voice, while introducing stronger accountability, standardized assessments, and clearer financial oversight. It’s reform by execution, not legislation.

What’s worked are the incremental changes: stronger oversight of psychiatric facilities, new options for assisted outpatient treatment, and alignment with federal Medicaid rules. These steps have improved safety, access, and compliance. What hasn’t worked are the attempts to overhaul the entire Code at once. Comprehensive reform has repeatedly stalled under the weight of local resistance, unclear roles between state and county entities, and fears of losing control or funding. The result is a patchwork system, governed by an old law but operated through modern contracts.

The central issue isn’t whether the Code needs rewriting, it’s whether Michigan can bridge the gap between statute and practice. Until policymakers, providers, and the state agree on a shared vision for accountability and integration, the Code will remain both a safeguard and a stumbling block. Real reform will require what every past effort has lacked: trust, transparency, and a willingness to let go of structures that no longer serve the people they were meant to protect.

Addressing Retaliation in Michigan’s Behavioral Health System
Why Retaliatory Tactics Must End

As the state pursues system redesign, the real test will be whether providers can speak freely without fear of retaliation. A behavioral health system built on fear cannot deliver care grounded in trust. Across Michigan, providers operate under real and implied threats: delayed reimbursements, withheld contracts, and restricted referrals. These actions are rarely formalized but widely understood. For providers without deep financial reserves, even brief disruptions in funding can jeopardize operations and, by extension, access to care for patients and families who depend on them.

Retaliation doesn’t just silence providers, it silences progress. It delays innovation, stifles accountability, and erodes public confidence in Michigan’s behavioral health system. Ending these tactics is not merely about protecting organizations; it’s about ensuring that underserved communities, in both rural and urban environments can access consistent, equitable, and person-centered care.

Michigan’s behavioral health system faces a structural problem that allows retaliation to take root. When the same entities act as funders, regulators, and service providers, they hold unchecked power over the very organizations they are supposed to support. The dual role of administrative bodies as both payers and providers of care creates a built-in conflict of interest. Without clear guardrails or independent oversight, providers who challenge decisions risk retaliation that is difficult to prove but easy to feel, fewer authorizations, reduced rates, and slower payments. These actions may not appear in writing, but their impact is widely felt across the network.

The consequences of this imbalance reach far beyond boardrooms and budgets. Providers who fear retaliation are less likely to report problems, propose innovations, or speak out when systems fail. That fear suppresses the honest feedback the state needs to improve care delivery. When those voices go silent, inefficiencies deepen, inequities grow, and the people waiting for help are the ones who pay the price. A system that discourages truth-telling cannot be one that promotes healing.

Fixing this problem is not simply a matter of appropriations, it is a matter of structure. Michigan must separate the funding and service functions that currently overlap. Amending MCL 330.1206 to prohibit entities from serving as both funders and direct providers would align behavioral health oversight with the standards already used in physical health. The same entities that manage funds should not compete for them. At the same time, the state should codify clear anti-retaliation provisions, both in statute and in contracts, to define prohibited actions such as referral manipulation, rate suppression, and contract termination for cause other than performance. Providers must have safe, enforceable pathways to raise concerns without fear of reprisal.

If funders expect oversight from MDHHS, they must be willing to operate under the same standard. Creating an independent dispute resolution process, establishing a neutral oversight body, and mandating public disclosure of rate-setting methodologies and contract terms are essential steps to restore balance. A system built on intimidation cannot deliver care grounded in trust; it must be rebuilt on fairness, integrity, and accountability.

The ongoing rebid process offers Michigan a rare opportunity to correct decades of structural dysfunction. The redesign can’t just change who holds the contract, it must change how power is used. Providers are ready to help build a system that is stable, transparent, and centered on people, not politics. But that work cannot happen in a climate of fear. Legal guardrails, fair contracts, and structural independence must be part of the redesign if Michigan is serious about reform.

Michigan’s behavioral health system cannot operate on fear and expect to deliver care based on trust. Providers should not have to choose between protecting their organizations and protecting their clients. The next phase of reform must include explicit anti-retaliation protections, structural independence, and true oversight because accountability is not opposition, and transparency is not a threat. Ending retaliatory tactics is not about politics or profit; it’s about rebuilding a system worthy of the people it serves.

When a Partner Becomes a Competitor: The New Power Dynamic in Behavioral Health

For decades, Michigan’s behavioral-health system has relied on nonprofit providers to deliver the services that community mental health authorities were created to ensure. Crisis stabilization, residential treatment, case management, and peer support are all built on that partnership. The Michigan Mental Health Code assigns community mental health boards, the CMHSPs, the responsibility to arrange and oversee a comprehensive array of services. What the Code does not require is that they deliver those services themselves.

The Mental Health Code created community mental health boards and gave them broad authority to plan, fund, and oversee services, but not to deliver all of them directly. Prepaid Inpatient Health Plans (PIHPs), which came later through federal Medicaid waivers and MDHHS contracting, inherited much of that administrative role without being written into the Code itself. In practice, they now function as regional funders and stewards of public behavioral-health dollars, responsible for contracting with qualified providers, monitoring performance, and protecting recipient rights. Yet nothing in law prohibits them from bringing services in-house if they believe it will improve accountability or save money. That flexibility, while legal, has created a new kind of tension: when the entity that once paid for services decides to provide them instead.

The problem is not change, it’s power. Providers often spend decades building specialized programs, infrastructure, and community trust under state contracts. But the relationship between a funder and a provider is contractual, not hierarchical. There is no legal obligation under the Mental Health Code or state contract law to hand over intellectual property, operational systems, or training to a funder that plans to replace them. If a PIHP or CMHSP no longer wishes to contract, that’s its choice, but it must figure out how to stand up those services on its own.

Governor Appointments

Autism Council 

Raymie Postema, of Marshall, is the director of the Office of Recipient Rights at the Michigan Department of Health and Human Services. Postema holds a Bachelor of Science in psychology from Western Michigan University. Raymie Postema is reappointed to represent Recipient Rights for the public system for a term commencing October 23, 2025, and expiring September 30, 2029. 

The Autism Council is charged with overseeing Michigan's Autism Spectrum Disorders (ASD) State Plan. The Council will implement, monitor, and update the Michigan ASD State Plan, which will provide for comprehensive lifespan supports to individuals with ASD and their families through access to information and resources, coordination of services, and implementation of evidence-based practices.  

 This appointment is not subject to the advice and consent of the Senate.

ICYMI

2025 CMHAM Fall Updates, Link

Michigan's education department releases new school mental health guidelines, Michigan Radio - The Michigan Department of Education (MDE) released a set of guidelines for school mental health support Thursday

Pine Rest Expands Medicaid Services Amid Federal Uncertainty, Newsradio WOOD 1300 and 106.9 FM - The budget includes funds for expanding Certified Community Behavioral Health Clinics, improving school-based health services, and establishing crisis ...

Here's a look inside Ford Field's sensory room, WDIV (Hope Network)

Dearborn Heights child welfare agency to end girls' residential treatment program, The Detroit News

How to mask like an autistic, Soltaire Townsend (Blog)

Health care is broken. Henry Ford CEO says 'We can do better', Detroit Free Press