Section 298 Initiative

The Section 298 Initiative is a statewide effort to improve the coordination of physical health services and behavioral health services. The initiative started with the publication of the 2017 executive budget, which sparked a statewide discussion on the best approach for coordinating physical health services and behavioral health services. In order to facilitate this discussion, the Lieutenant Governor called an initial meeting of stakeholders, which resulted in the formation of the original 298 Workgroup. Which produced a final report. The Michigan Legislature used the recommendations from the original 298 Workgroup to create a Section 298. The goal was to create the most effective financing model and policies for behavioral health services in order to improve the coordination of behavioral and physical health services for individuals with mental illnesses, intellectual and developmental disabilities, and substance use disorders. The Department and the 298 Facilitation Workgroup have hosted a series of Affinity Group meetings across Michigan to inform the development of the recommendations. Approximately, 1,113 Michiganders participated in this process during 45 separate meetings for the development of recommendations.

Some concerns from the stakeholders with Section 298 language are as follows:

1. Immediate Reduction of Benefits: The average administrative cost for the public system is 6%; for for-profit health plans, it is 15-17%. This translates into an immediate 10% reduction in funds available to provide services to people.

2. The MI Constitution requires the state to support mental health services and the MI Mental Health Code obligates the state to financially support community mental health programs established by the 83 Counties.

3. Instead of dealing with 1 PIHP, CMHs would now have to deal with 4 or more Medicaid Health Plans. ALL of which could have different criteria for medically necessary care and systems for authorizing services.

4. Counties currently have much input and play a large role in public accountability at both the funder and CMH level-this will go away as there will no longer be county commissioners and consumers on the board of directors at the funder level.

5. CMHSP services are accountable by law to the public and the persons depending upon the services, both via consumer board member requirements and CMHSP obligations to the governing county commissions. Health Plans do not have accountability to either the persons and families served or the communities in which they reside. It would like having the local Sheriff Dept. managed by a private company with no accountability to the county commission.

6. Transferring 98% of the public funds to a private interest may do away with the extension of state governmental immunity to local CMHSPs under the law and essentially renders existing county programs as no different than any other private entity.

7. There could be a loss of Consumer Self-direction: These include the Person Centered Planning Model, self-determination, peer support systems

8. Loss of Transparency: The Health Plans are not required to hold open meetings or solicit and use input from persons served or the community.

9. The private sector measures outcomes differently. Health plans are about avoiding risk and making a profit. CMHs run towards risk, seeks out and serves the most difficult cases.

10. Making the funding private will unravel a system that is overall working, it needs some improvements (Section 298 recommendations) but overall it works well.

There’s a long way to go in the budget process and details remain to be worked out. Both House and Senate budget subcommittees approved language that would carve out test programs that could lead to a privatization. It is unclear how the Michigan House and Senate will resolve differences between their budgets. The appropriations subcommittees rewrote budget language that could lead to more Medicaid health plan involvement in the current public system and consolidation of 10 regional mental health organizations into one superagency.

The management or delivery of public behavioral health services by private companies simply to save money has not been effective in other states. Providers, especially small local providers, have been forced to cut services or leave the system, weakening the local network.

Michigan’s current structure, known as a “carve out”, allows it to offer specialty mental health services not offered by health plans. Examples include help with housing, employment, transportation, and community inclusion. These supports will be lost in a “carve in,” for profit model.

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