The redesign RFP is canceled, but the responsibility to fix Michigan’s behavioral health system is not. Providers are still living with the consequences of fragmentation, weak accountability, and funding instability, and the work now is to force clarity, protect access to care, and push for concrete changes that address how the system actually functions. Pull Up Your Chair & Let’s Start the Conversation.
REDESIGN
The Redesign Was Canceled. The Problems Were Not.
The state’s decision to cancel the behavioral health redesign RFP on January 29, 2026, does not resolve the challenges facing Michigan’s system. It allows providers to advance the conversation and opens the door to creating changes in the current system.
The conditions that drove the redesign effort remain firmly in place. Providers are still operating in a fragmented structure with uneven contracting, delayed payments, inconsistent oversight, and growing workforce strain. Access gaps persist. Administrative complexity continues to divert time and resources away from care. None of that disappeared with the RFP.
What has changed is the mechanism, not the mandate.
The cancellation removes a procurement process, but it does not remove the state’s responsibility to address systemic dysfunction. Nor does it relieve providers of the daily consequences when the system fails to function as intended. People still need care. Providers still deliver it. And the risks created by fragmentation still show up in emergency rooms, courts, schools, and families’ lives.
This moment should be treated as a reset in approach, not an endpoint.
For providers,
Document strain. The current system remains financially and operationally fragile. Providers should plan for continued uncertainty while carefully documenting delayed payments, inconsistent audits, conflicting contract terms, and workforce impacts. This is about creating a clear record of where the system is breaking down and why.
Insist on clarity and transparency. Providers should seek clear answers about what problems the state is still trying to solve, how accountability will be strengthened, and what interim guardrails will govern contracting, rate setting, and dispute resolution.
Prepare for what comes next. The absence of an RFP does not mean the absence of change. Legislative action, administrative rulemaking, pilot programs, or contract-level restructuring are all plausible paths forward. We have to see what the Department announces next.
The redesign RFP may be off the table, but the responsibility to fix what is not working remains. This is a moment for focus, alignment, and credibility.
Read more,
REDESIGN
Why Michigan Struggles to Reform Behavioral Health—and How It Can Move Forward Now
For years, Michigan has acknowledged that its behavioral health system is not working as intended. From the reforms recommend during the Granholm Administration, to the 298 discussions in the Snyder Administration, to the Shirkey/Whiteford legislation, and most recently the states RFP for system redesign, nothing has worked. Access to care varies by geography. Providers face inconsistent rules & rates, delayed payments, retaliation by their funders and their funders making good on their threats of taking services away from the providers they are supposed to support. Workforce shortages persist and are worsened when the PIHPs and CMHSPs actively recruit staff away from their provider network. And public dollars are getting absorbed by administrative complexity rather than direct care without any accountability or transparency by the PIHPs and CMHSPs.
The state’s recent decision to cancel its request for proposals (RFP) to redesign the system ended another chapter of reform without resolving the underlying problems. The question now is whether Michigan can reset the conversation and address those problems directly, without relitigating old arguments or entrenching new ones.
The system Michigan has today
Michigan’s public behavioral health system serves roughly 300,000 Medicaid beneficiaries with serious mental illness, intellectual and developmental disabilities, and substance use disorders. Care is funded through Medicaid and administered through a layered structure: the state contracts with 10 regional Prepaid Inpatient Health Plans (PIHPs), which in turn work with 46 local Community Mental Health Service Programs (CMHSPs) and hundreds of nonprofit and for profit providers.\
That structure evolved over decades, with the goal of preserving local input and public accountability. But over time, it has also produced fragmentation. Rules, rates, audits, and authorizations differ by region. Responsibility for access, quality, and oversight is spread across multiple entities. When problems arise, it is often unclear where accountability lies.
When announcing the cancellation of the RFP, the Michigan Department of Health and Human Services (MDHHS) said it remains committed to strengthening access, consumer choice, and efficient use of Medicaid resources, particularly by reducing duplicative administrative functions and directing more dollars toward care. (Bridge Magazine article, Michigan quietly kills effort t.)
Why redesign was pursued
The RFP that MDHHS ultimately withdrew was not driven by a single concern, but by a convergence of pressures: uneven access across regions, growing workforce instability, and increasing federal oversight.
In its amicus brief to the Michigan Court of Claims, Disability Rights Michigan identified five systemic problem areas: access variability by geography; accountability gaps created by diffuse governance; transparency and due process failures for beneficiaries; workforce instability that disrupts care; and longstanding structural weaknesses that prior reforms failed to correct. The brief emphasizes that these are not isolated incidents, but recurring features of the current system (Amicus Curiae Brief of Disability Rights Michigan, Region 10 PIHP v. State of Michigan, Court of Claims No. 25-000143-MB).
The Community Mental Health Association of Michigan, who actively opposed the states RFP effort, has stated publicly that the system needs redesign, citing financing pressures, workforce shortages, administrative burdens, and uneven performance across regions. Providers represented by the MI Care Council and other coalitions have echoed those concerns, arguing that fragmentation delays care and weakens accountability, regardless of who manages the contracts.
What the debate became and why it stalled
MDHHS and several provider coalitions have consistently argued that the redesign was not about privatization. The RFP required PIHPs to remain nonprofit entities operating under state contract, subject to Medicaid law, nonprofit governance, and public accountability. It did not transfer behavioral health dollars to for-profit insurers, nor did it eliminate CMHSPs. Instead, it sought to address conflicts of interest and administrative inefficiencies within the existing public framework.
Where stakeholders align
Despite the public conflict, there is substantial overlap across stakeholder groups on what a better system should deliver.
Providers broadly support clearer performance standards, shared financial risk tied to outcomes, and quality incentives that reward effective care rather than volume. They want consistent referrals, reduced duplicative audits, acceptance of national accreditation standards, and meaningful data sharing across networks to improve care coordination and crisis response.
Providers also advocate for transparent decision-making, a neutral way to resolve disputes with funds, and an end to the retaliation and threats of hiring their workforce and taking away services. (See OCHN story below). They have called for clearer lines of accountability and stronger oversight, regardless of governance model.
PIHPs and CMHSPs have acknowledged the need to modernize operations, reduce administrative duplication, and respond to changing federal expectations around integration, quality measurement, and fiscal transparency. CMHAM leadership has stated publicly that collaboration, not stasis, is the path forward.
Unresolved tensions that still need to be addressed
One unresolved issue is the role of PIHPs and CMHSPs as both funders and, in some regions, direct service providers. Providers have raised concerns that entities controlling contracts, funding, and data are competingwith them for care, workers, and resources. They have proposed guardrails such as limits on direct service expansion, non-solicitation of provider staff, standardized fair rates, and independent oversight to preserve a level playing field.
Another unresolved question is how to balance statewide consistency with meaningful local input. Most stakeholders agree that local inconsistency should not determine access to care. But there is less agreement on how local voices should be structured and protected within a more standardized system.
Some reforms, such as standardized audits, clearer contract terms, or improved data sharing, can be implemented relatively quickly. Others, including statutory changes require time, legislative action, and political will.
A pathway forward that does not require consensus on everything
Michigan’s opportunity now is not to relaunch a contested procurement, but to reset the work around what can be influenced immediately. That begins with making shared purpose explicit: improving access, stabilizing the workforce, strengthening accountability, and ensuring Medicaid dollars support care rather than bureaucracy. From there, the focus can shift to removing specific barriers that keep the system stuck, duplicative oversight, opaque decision-making, inconsistent standards, and unresolved conflicts of interest.
Progress does not require unanimity on structure. It requires trust-building processes that allow stakeholders to surface concerns without fear of retaliation, test solutions, and adjust based on evidence. Transparent forums for dialogue, clear expectations, and measurable steps, such as uniform training standards, shared data infrastructure, independent dispute resolution, and protections against retaliation, can generate momentum even amid disagreement.
Importantly, this approach acknowledges uncertainty. Not every reform will work as intended. Workforce shortages will not disappear overnight. Federal policy changes will continue to shape the landscape. But waiting for perfect alignment has already delayed improvements that most agree are overdue.
Michigan has spent years diagnosing what is wrong with its behavioral health system. The cancellation of the RFP closes one path, but it also creates space to move forward differently, by focusing less on who controls the system and more on how it performs for the people who rely on it.
The question is no longer whether the system needs to change. Stakeholders across the spectrum have said that it does. The challenge now is whether Michigan can turn that shared recognition into practical, trust-building action, and get it done this year.
CRISIS
Common Ground Ends Adult Crisis Services in Pontiac After OCHN Continues to Withhold Funding
Common Ground has been forced to end adult crisis services at its Resource & Crisis Center in Pontiac effective January 29, 2026, after Oakland Community Health Network (OCHN) failed to issue multiple monthly payments for crisis services. According to Common Ground, OCHN informed the organization on January 27 that it did not intend to release the payments, citing outstanding cost settlement reviews. The resulting nonpayment created an unsustainable financial deficit, leaving Common Ground with no viable option but to discontinue adult crisis services at the center, a decision the organization says it did not initiate and never wanted to make.
Common Ground described the outcome as “entirely avoidable” and said the funding lapse reflected a failure of fiduciary responsibility. She noted that withholding payment during an active transition of crisis services placed patients, staff, first responders, and the broader emergency response system at risk. Common Ground serves more than 8,000 people each year at the Pontiac Resource & Crisis Center and warned that the loss of adult crisis services will place additional strain on law enforcement, emergency departments, hospitals, and other county systems that are already under pressure.
The closure has also renewed scrutiny of a longstanding structural issue in Michigan’s behavioral health system: the ability of Community Mental Health Service Programs (CMHSPs) to act simultaneously as payers and direct service providers in regions where independent provider networks already exist. Providers argue that this dual role creates inherent conflicts of interest and allows funders to redirect services in-house, even when community-based programs are already operating.
In Genesee County, the Genesee Health System established its own crisis residential unit, leading to the closure of existing programs run by providers. In Kent County, Network 180 launched its own Crisis Stabilization Unit, resulting in the closure of Hope Network’s Pivot program, despite higher costs. In Traverse City, Northern Lakes discontinued its contract with Hope Network, prompting the closure of its crisis residential unit there. According to providers, these decisions have repeated across regions, with public entities replacing contracted services rather than strengthening existing provider networks.
Providers contend that the cumulative effect is fewer services delivered at higher cost, reduced competition, and diminished access for people in crisis. They have called for statutory safeguards that would prohibit CMHSPs from serving as both payer and provider in regions with established networks, absent a documented service gap. Advocates argue that such guardrails would protect continuity of care, preserve provider capacity, and ensure public dollars are directed toward expanding access rather than duplicating infrastructure.
Despite the closure of adult crisis services at the Pontiac facility, Common Ground will continue operating and providing a wide range of crisis and support services across Michigan. These include its 24/7 Crisis Hub, statewide virtual behavioral health urgent care, 988 Suicide and Crisis Lifeline response, MiCAL, mobile crisis services, peer support lines, victim services, and resiliency centers supporting communities impacted by mass violence. The organization said its mission to help people move from crisis to hope remains unchanged and that it will continue serving communities as a critical part of Michigan’s behavioral health safety net.
See the news release from Common Ground for more information.
ICYMI
THE BUDGET
Bohnak questions Michigan’s priorities for rural health funds, Iron Mountain Daily News
Funding
Updating Grantmaking Practices to Increase Flexibility and Reduce Restrictions, Michigan Health Endowment Fund
Ballmer Group awards $4.6M to bolster family support in Oakland County schools, Crain’s Detroit Business
Suicide Prevention
Suicide prevention advocates emphasize importance of Michigan’s red flag law, mental health orgs, Michigan Advance
SUD
Behavioral Health Reform
Advancing Medicaid Primary Care Population-Based Payment Models: Four Lessons for States, Center for Health Care Strategies
CCBHC
The Role of Certified Community Behavioral Health Clinics in Improving Outcomes for Children and Families Using the System of Care Approach, Center for Health Care Strategies
FUNDING
Berrien Community Foundation to continue serving all portions of the county, Harbor Country News
EXPANSIONS
Kent County health services expand with $200,000 grant to Health Net of West Michigan, Grand Rapids Press
From other states
Community-based organizations (CBOs), like housing providers and social services, can help states more effectively serve people enrolled in Medicaid. The National Academy for State Health Policy explores how Arizona, Massachusetts, and North Carolina have successfully partnered with CBOs and lessons learned for other states. Source: Robert Woods Johnson Foundation
Gubernatorial Appointments
Unless noted, appointments are subject to the advice and consent of the Senate.
Mental Health Diversion Council
Jennifer Peacock, of Ann Arbor, is the policy director of the Michigan Center for Youth Justice. Previously, Peacock was a senior program associate at The Aspen Institute Center for Native American Youth. Peacock holds a Bachelor of Science in cultural and global studies from Central Michigan University and a Master of Arts in international peace and conflict resolution from American University. Jennifer Peacock will be appointed as an advocate for consumer representatives on juvenile justice issues for a term commencing date January 31, 2026, and expiring date January 30, 2030. Peacock will succeed Gabrielle Dresner, whose term is expiring. The Mental Health Diversion Council was created in the Michigan Department of Community Health to advise and assist in the implementation of the Diversion Action Plan and provide recommendations for statutory, contractual or procedural changes to improve diversion. This appointment is not subject to the advice and consent of the Senate.
Michigan Interagency Coordinating Council on Infants and Toddlers with Developmental Disabilities
Jennifer Jovanis, of Bloomfield Township, is the co-founder of The Jovanis Group. Jovanis was previously a senior account executive at Businessolver. Jovanis holds a Bachelor of Science in sales and business marketing from Western Michigan University. Jennifer Jovanis is appointed as an individual representing parents of infants or toddlers with disabilities or children with disabilities less than 13 years old at the time of appointment with knowledge of, or experience with, programs for infants and toddlers with developmental disabilities for a term commencing January 28, 2026, and expiring October 31, 2026. Jovanis succeeds Andrea LaFramboise. The Michigan Interagency Coordinating Council (MICC) is authorized and required by Part C of the Individuals with Disabilities Education Act (IDEA), as amended by Public Law 105-17. The Michigan Department of Education (MDE) is designated as the lead agency for the state of Michigan. The MICC is charged with advising and assisting MDE in the development and implementation of a statewide, comprehensive, coordinated, multidisciplinary, interagency system that provides early intervention services for infants and toddlers with disabilities and their families. This appointment is not subject to the advice and consent of the Senate.
Michigan Council for Rehabilitation Services
Jenny Brown, of Rochester Hills, is the chief executive officer of Dutton Farm, which provides workforce opportunities to adults with intellectual and developmental disabilities. Dutton Farm received the 2017 National Down Syndrome Congress’ Employment Award. Brown holds a Bachelor of Science in sociology and political science from Oakland University. Jenny Brown is appointed to represent disability advocacy groups for a term commencing January 28, 2026, and expiring December 31, 2028. Brown succeeds Trina Edmunson, whose term has expired. Maria Peak, of Olivet, is an independent contractor with and the former director of ASPPIRE of Mid-Michigan. Peak previously worked as a special education teacher and as the project coordinator at the Michigan Transition Outcomes Project. Peak holds an associate degree in general education from Lansing Community College and a Bachelor of Science in special education and teaching from Eastern Michigan University, and has completed post graduate studies in early childhood education and teaching from Western Michigan University. Maria Peak is appointed to represent disability advocacy groups for a term commencing January 28, 2026, and expiring December 31, 2028. Peak succeeds Lisa Cook-Gordon, whose term has expired. The Michigan Council for Rehabilitation Services reviews, analyzes, and advises Michigan's rehabilitation programs and services, and advises the department director and Governor. The Council works in partnership with Michigan Rehabilitation Services (MRS) and the Michigan Department of Licensing and Regulatory Affairs' Bureau of Services for Blind Persons (LEO-BSBP).These appointments are not subject to the advice and consent of the Senate.
Michigan Developmental Disabilities Council
Julie Shaw, of Negaunee, is the executive director of the Superior Alliance for Independent Living (SAIL). Shaw holds a Bachelor of Arts in special education from Northern Michigan University. Julie Shaw is appointed as a member representing a local or non-governmental agency concerned with services for individuals with developmental disabilities in this state with sufficient authority to engage in policy, planning, and implementation for a term commencing January 28, 2026, and expiring September 30, 2027. Shaw succeeds Leah Ortiz, who has resigned. The Michigan Developmental Disabilities Council (MiDDC) is an advocate for people with intellectual and developmental disabilities (I/DD) and their families. MiDDC channels federal funds to support programmatic activities and grants to improve systems and services to help people with I/DD live self-determined and self-directed lives in a diverse and inclusive community. MiDDC also supports a statewide self-advocacy system, led by individuals with I/DD, known as the “Self-Advocates of Michigan,” or SAM. SAM receives staff support and funding from MiDDC to help people with lived experiences in their advocacy journey. This appointment is not subject to advice and consent of the Senate.
Michigan Board of Behavior Analysts
Angela Khater, of Dearborn, is the clinical director at Individualized Outcomes for Autism (IOA). Khater worked previously as a board-certified behavior analyst at Centria Health Care. Khater holds a Bachelor of Business Administration with a concentration marketing from Davenport University and a Master of Arts in behavior analysis from Western Michigan University. Angela Khater is reappointed as an individual representing behavior analysts for a term commencing January 28, 2026, and expiring December 30, 2029. The Michigan Board of Behavior Analysts was created to assist the Michigan Department of Licensing and Regulatory Affairs with the regulating and licensing of behavior analysts who utilize applied behavior analysis interventions that are based on scientific research and the direct observation and measurement of behavior and the environment. This appointment is subject to the advice and consent of the Senate.
If you are a nonprofit behavioral health provider in Michigan, and not a member of the MI Care Council, MI Behavioral Health & Wellness Collaborative, or the Michigan Association of Substance Addiction Providers, or just interested in collaboration, please contact [email protected], for more information on the value of membership. If you know of someone who might find this content, please share this link to the newsletter.
Disclaimer: This newsletter is intended for informational purposes only. Sources have been cited where applicable, and while some content may have been drafted with the assistance of AI, all material has been reviewed and edited by humans. We strive for accuracy, but if you believe something is incorrect or misrepresented, please reach out via direct message so we can review and correct the record if necessary.
