In this week’s issue, we continue to explore how to change the conversation around behavioral health in MIchigan and reframe the issue. April is Autism Awareness Month and May is Mental Health Awareness Month. Take advantage of these awareness months to educate key stakeholders in your community and build strategic relationships. Partner with law enforcement on event in your community, give tours to legislators judges and county commissioners and administrators. There are so many things to share based on the impact you are making. It’s time to amplify your work and share your stories. Pull Up Your Chair & Let’s Start the Conversation.

Let’s Put Community Mental Health Back on Michigan’s Agenda
*This was an editorial prepared after the Governor’s State of the State that was never published. It builds upon last week’s editorial.

The Governor recently outlined a vision for Michigan’s future. If we are serious about building strong communities, safe neighborhoods, and a resilient workforce, community mental health must be at the center of that vision, not on the margins.

Community mental health affects every Michigan family. It determines whether a child in crisis is stabilized early or ends up in an emergency room. It shapes whether someone struggling with addiction receives treatment or cycles through jail. It influences whether individuals with serious mental illness can work, live independently, and contribute to their communities. When behavioral health systems function well, public safety improves, hospital costs decline, schools are more stable, and families stay intact. When they do not, the consequences ripple across our police departments, hospitals, classrooms, and county budgets.

Michigan’s behavioral health system was built decades ago under the Mental Health Code to keep care public and community based. Over time, the state created regional structures to manage Medicaid funding and coordinate services. That model has protected specialty care and kept decision making local. It has also relied on a statewide network of nonprofit, community-based providers that serve hundreds of thousands of Michiganders each year and manage billions in Medicaid dollars responsibly on behalf of taxpayers.

When people can access behavioral health services in their community, the system works. But over time, the structure on which it was built has exposed gaps. Demand has changed. Workforce conditions have changed. Administrative complexity has increased. It is time to modernize Michigan’s behavioral health system, so it reflects today’s realities.

Today’s system carries layers of administration that can slow access and increase costs before a person ever reaches care, and several major shifts since it was built have exposed gaps that were less visible decades ago. The rules governing Medicaid behavioral health are far more complex than they once were, and decisions about contracts, approvals, and payments now shape whether someone can get help long before they meet a clinician. In some regions, the same entities that manage Medicaid dollars also operate competing services. Even when well intentioned, that structure creates conflicts of interest and weakens confidence in fair competition. When independent providers are destabilized or displaced, access shrinks, wait times grow, and the overall provider network becomes less stable. Providers working across regions must navigate different rules and paperwork requirements, pulling time and resources away from care. At the same time, demand has increased, workforce shortages persist, and the public expects clear answers about access, outcomes, and how behavioral health dollars are being used. The current system was built for a different era, and when independent providers are destabilized or displaced, access shrinks and wait times grow, access and stability will continue to suffer.

We have seen mid contract rate changes, retroactive billing interpretations, delayed payments, and abrupt service transfers that destabilize providers and disrupt care. We have seen inconsistent rules across regions that force providers to navigate different standards for credentialing, audits, documentation, and authorization. These practices may be permissible under current law, but they reflect gaps in oversight and clarity that harm the very people the system is meant to serve.

Modernizing the system does not mean privatizing it. It does not mean abandoning public oversight. It means strengthening guardrails so that public stewardship and community delivery can coexist without conflict and with greater transparency.

That includes clear separation between funding oversight and direct service delivery except where no qualified provider exists. It includes uniform statewide administrative standards, so clinicians are not pulled away from patients to manage ten different rulebooks. It includes independent appeals, so no entity acts as both decision maker and judge. It includes payment timeliness standards that ensure providers can keep their doors open. It includes transparency in rate setting and public reporting so policymakers and taxpayers can see where dollars go and how access is measured.

These are structural safeguards common in other parts of health care. They increase trust, protect taxpayers, and stabilize the provider network that communities rely on in moments of crisis.

We understand the interests of regional authorities. They are responsible for managing financial risk and ensuring compliance under complex Medicaid rules. They want stability and local voice. Those goals are legitimate. But stability should not mean maintaining the status quo. Local control cannot mean inconsistent standards. Risk management cannot mean concentrating authority in ways that discourage collaboration or limit access.

If fewer administrative layers and regions would reduce duplication and improve clarity, we should consider it. If statewide standards would make it easier for providers to focus on care instead of paperwork, we should adopt them. If separating the funder from also being the service provider reduces conflicts of interest and strengthens network adequacy, we should embrace it. If stronger oversight of how funds are allocated and spent improves accountability and fairness, we should welcome it.

At its core, this is not about preserving any structure. It is about ensuring that every Michigander can access timely, high quality behavioral health care delivered in their community.

We are encouraged by the Governor and the Michigan Department of Health and Human Services for recognizing the need to modernize Michigan’s behavioral health system in ways that improve access, strengthen quality, advance equity, and promote fiscal responsibility, and by Speaker Hall’s commitment to eliminating wasteful spending and ensuring taxpayer dollars are used effectively.

The state, the PIHPs, CMHSPs, consumers, and providers have all agreed that improvements are necessary to ensure the system works as intended. We share a common goal of ensuring that every Michigander can access timely, high quality behavioral health care guided by shared values of access, continuity, equity, fiscal responsibility, and accountability.

As Michigan moves into a new election cycle, candidates from both parties are talking about affordability and making government work better. Community mental health sits squarely at the intersection of both. If we want stronger families, safer communities, and a healthier workforce, then it is vital to put community mental health back on Michigan’s agenda. 

What others are saying about the Redesign? County boards get update on mental health services, Iron Mountain Daily News

The Mental Health Framework: A Direction, Not Yet a Design

The Michigan Department of Health and Human Services (MDHHS) is shifting to a more person-centered approach to serving Michiganders with mental health needs. As part of MIHealthyLife, an initiative that began in 2022 to strengthen the Comprehensive Health Care Program (CHCP), MDHHS is partnering with Medicaid Health Plans (MHPs), Prepaid Inpatient Health Plans (PIHPs), and providers to improve accountability for and coordination of mental health care across the Medicaid program.

Under Michigan’s Mental Health Framework (MHF), an enrollee’s level of mental health need, as determined through a State-identified standardized assessment tool, will more clearly determine which plan—the enrollee’s MHP or PIHP—is responsible for their mental health coverage and care. MHPs will also begin covering some additional mental health services for enrollees with lower levels of mental health need, so MHPs are accountable for more of these enrollees’ continuum of care, with the intent of phasing the MHF in October 2026:

MDHHS delivered their budget to the Senate Appropriations Subcommittee last week. Below are a few slides from that hearing.

Pine Rest Mental Health Opens 66 Children Psych Beds

Gov. Whitmer attended the grand opening of a mental health facility for children today after the state government kicked in $50 million across the course of two budgets to make it happen. Pine Rest Christian Mental Health Services held an event for the Pediatric Psychiatric Urgent Care Center and outpatient facility that includes specialty assessments and treatments for children’s mental health, including an Eating Disorders Partial Hospitalization program. “This is a crisis that doesn’t observe any geographic lines or any partisan lines, and that’s why it is so important for us to find common ground. I’m glad we were able to do this, and I wish we were in a position to do tenfold what we’ve done here,” Whitmer said. Whitmer gave MIRS the last question in the scrum today and said Senate Majority Leader Brinks and Sen. Huizenga were a big part of helping get the funding passed to be able to get the facility built. The new 136,000 square foot facility includes 66 inpatient beds that could be expanded to 82 if necessary and has space for 60 outpatient rooms. The Pine Rest Pediatric Behavioral Health Center opens its inpatient and urgent care portion March 23 and the outpatient and partial hospitalization programs starting March 30. Director of Patient Access Kyle Hoffmaster said the psychiatric urgent care pediatric program had operated as a pilot program on the Pine Rest campus since Jan. 5, and since that time had served 300 patients.  Hoffmaster said he hopes the 66 beds would be enough. “Even if it’s not, we will continue to have one of our current units available for kids if needed,” he said. He said having psychiatric urgent care was much better for a community, because the kids in a mental health crisis didn’t end up taking medical beds. “We really don’t want kids to go to the emergency department if, medically, they don’t need to be there,” he said. Source MIRS

See related story, Michigan boosts bed capacity in ‘horribly underserved’ mental health system, Bridge Magazine; A new era for youth mental health: Pine Rest celebrates grand opening of pediatric center, WGVU; $395K awarded to help expand social, emotional services for kids in Michigan, WXXM TV.

MDHHS Director Hertel and State Budget Director Flood tour new
state psychiatric hospital, discuss importance of continued
investments in behavioral health for Michigan families 

Last week, Michigan Department of Health and Human Services Director Elizabeth Hertel and State Budget Director Jen Flood toured the soon to be completed Southeast Michigan Psychiatric Hospital, a key component of the state’s commitment to expanding behavioral health care services for Michigan families. During the tour, they discussed the importance of the state’s continued investments in behavioral health care to ensure Michigan residents can access the care they need.

Slated to begin accepting patients this fall, the new hospital will feature 264 beds for adults and youth, increasing the state’s capacity by 54 beds. The facility is being made possible due to $383.4 million in budget investments by Gov. Gretchen Whitmer and the legislature. 

Governor Whitmer’s recently released FY 2027 budget proposal includes $80.1 million to begin operating the new hospital and to hire and train additional staff needed to care for the increased patient census. 

While the new psychiatric complex will serve all ages, the hospital features distinct facilities with separate living and programmatic spaces for children and adults. The more than 410,000-square-foot facility will feature amenities including a gymnasium, art rooms and sensory spaces to support holistic care. The complex will include shared administration and food service, which allows for budget savings.  

The build is being overseen by the Michigan Department of Technology, Management & Budget (DTMB). The construction manager for the project is Christman Company­, with design services provided by Integrated Design Solutions LLC.  

It will replace Hawthorn Center, which opened in 1965 and was demolished to make way for the new hospital, and Walter Reuther Psychiatric Hospital, which opened in 1979, and is slated to close after the new facility opens. 

The State of Michigan currently operates four inpatient hospitals that serve nearly 600 patients. Caro Psychiatric Hospital and Kalamazoo Psychiatric Hospital serve adult patients and Walter Reuther Psychiatric Hospital serves both adults and youth in separate areas of the facility. The Center for Forensic Psychiatry provides diagnostic services to the criminal justice system and psychiatric treatment for criminal defendants adjudicated incompetent to stand trial or acquitted by not guilty by reason of insanity. 

Michigan's state hospitals are accredited by the Joint Commission and are committed to providing evidence-supported, person-centered inpatient care to individuals in an environment that values compassion, collaboration and community reintegration. 

Dive Deeper, Michigan psychiatric hospital in Northville Twp. to open in October, Detroit Free Press; Judson Center to Begin Major Renovation of its Historic Royal Oak Campus in April, dBusiness; New Michigan psychiatric hospital with 264 beds set to open this fall, Midland Daily News; Easterseals MORC Opens Behavioral Health Urgent Care Clinic In Southfield, Michigan, Open Minds.

US National Spending On Mental Health And Substance Use Disorder Treatment Driven By Case Growth, 2000–21, Health Affairs Today

Addressing Health-Related Social Needs Through Medicaid Section 1115 Waivers: Challenges And Opportunities, Health Affairs Today

Events.

2026 Michigan State of Reform Health Policy Conference on May 5^th! 

I hope you will join me (Dan Cherrin), Dana Lasenby (OCHN), Bob Sheehan (CMHAM) and Kristen Morningstar (MDHHS) for a discussion on “The Impact of Programmatic Changes on Michigan’s Behavioral Health Industry,“ at the 2026 State of Reform Health Policy Conference, May 5, at the Kellogg Hotel and Conference Center - 219 S Harrison Rd, East Lansing, MI 48824.

The goal of this event is for the panel of experts to drive the conversation. If you have issues you hope to hear about and potential questions you want the moderator to ask, please send them to dcherrin@northcoaststrategies.