Justin A. Hinkley

Lansing State Journal

LANSING - Eighteen days after one lawmaker called it "a nonstarter," Gov. Rick Snyder's administration has officially backed off a request to allow private health maintenance organizations to manage public mental health dollars.

Lt. Gov. Brian Calley said in a statement Friday that language in Snyder's fiscal 2017 budget request calling for the shift "needs to be replaced." As reported by the State Journal on Feb. 23, Calley said Friday he'd convened a work group of representatives from both sides of the issue to develop new budget language over the next two months.

Snyder's request for the budget that starts Oct. 1 called for HMOs to manage Medicaid dollars that fund treatment for mental illness, substance abuse and developmental disabilities. Public groups of community mental health organizations called Prepaid Inpatient Health Plans, or PIHPs, currently manage that money.

Officials with the Department of Health & Human Services said the shift would foster better coordination of physical and mental health care, but critics called it a move to give public health care dollars to for-profit companies.

In his statement, Calley said he'd asked the Community Mental Health Association, the HMOs and others to come up with language that would send more money to direct services and better integrate the two types of care.

“This workgroup is taking the boilerplate language that drew concerns off the table and starting from scratch," Calley said in a written statement. "Together we are engaging in thoughtful discussions on how we can reimagine and reinvent the statewide behavioral health system in which we invest $2.4 billion dollars annually.”

Contact Justin A. Hinkley at (517) 377-1195 or jhinkley@lsj.com. Follow him on Twitter @JustinHinkley. Sign up for his email newsletter, SoM Weekly, at on.lsj.com/somsignup.