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Mental health privatization inches forward

Jun 11, 2017

A controversial proposal to integrate behavioral healthcare with physical healthcare under management by private insurance companies is moving ahead, under a budget plan making its way through the state Legislature.

The new budget would require a pilot program  in Kent County, and allows the state to conduct up to three more pilot programs. 

Mental health advocacy groups have come out against the plan. A work group established in 2016 to study Gov. Rick Snyder's proposal to integrate mental and physical health care recommended against handing control over to private insurance companies. Those advocates say the Legislature has ignored its recommendations in moving forward with exactly that plan. 

(For more mental health coverage check out Minding Michigan, our ongoing series that examines mental health issues in our state.)

"Needless to say, we're extremely disappointed. It goes against all of the work that's been done until now, which ended in a couple of different reports to the Legislature. And yet people we don't think have the requisite knowledge are going ahead and doing something different," says Dohn Hoyle, director of public policy for ARC Michigan, an organization for people with intellectual and developmental disabilities.

Hoyle says advocates, including Michigan community mental health clients and their families, have a number of concerns with the proposal. They worry that the new, private system would lack transparency, because insurance companies are not bound by open meetings and freedom of information regulations. And they say any savings from efficiencies in the new system would benefit insurance company shareholders rather than patients.

Hoyle also worries services provided in the community mental health system that don't fall into typical clinical categories, such as housing assistance and transportation, could be lost in the new privatized system.

But Dominick Pallone, executive director of the Michigan Association of Health Plans, says those concerns are unfounded. 

"As a licensed HMO in the state, the plans are licensed and governed under the Michigan insurance code," Pallone says. "So if a patient feels that they need services or that their provider feels that they need services today, whether we're talking behavioral health or physical health, there's a very set standard process and requirement for the person to receive the services that are first medically necessary."

Addressing concerns that services would not be equivalent, Pallone says, "We do provide non-medical care. We're required to do it by contract. One of the examples I use is non-emergency medical transportation. It's not ambulance transportation. It's transportation to and from medical appointments. It's not a clinical claim. It's not something that's a clinical service. It's a support service. Our expectation is that the benefit levels that exist for the behavioral health population today will still exist tomorrow."

Mental health advocates acknowledge problems in the current system, and generally support integration of benefits. Under the current system, patients can fall between the cracks. For example, Pallone says a patient with a mental health disorder rated as mild-to-moderate is covered under their behavioral health plan. But if their condition progresses to severe, they would normally need an evaluation in the public mental health system to receive benefits for their more severe condition. In that case, says Pallone, the patient is sometimes denied an evaluation due to limited resources in the behavioral health system, handing the cost and responsibility back to the behavioral health system.

Hoyle says the workgroups studying these problems recommended that money should not be handed over to the health plans. Options recommended instead included setting up a third organization to coordinate the two systems, or setting up contracts between them. "We talked about a number of different things that would be feasible to get at the issue for that small segment of the population, but wouldn't require these kind of wholesale changes."