- Associated Press - Friday, February 12, 2016

LANSING, Mich. (AP) - Michigan Gov. Rick Snyder has proposed privatizing the public mental health system by moving state funds to Medicaid HMOs.

The Republican governor’s $54.9 billion budget for fiscal 2017 doesn’t cite savings for the switch, but the Michigan Association of Health Plans said it could save millions of dollars through improved efficiency, Crain’s Detroit Business (http://bit.ly/1TX99pw ) reported Thursday. The plan calls for moving behavioral health benefits to managed care plans by the end of fiscal 2017. The state currently makes Medicaid payments to what are called “prepaid inpatient health plans,” or mental health authorities.

Robert Sheehan, CEO of the Michigan Association of Community Mental Health Boards, doubts the plan, if approved, will save money.

“We thought there would be real talk about integration and how to serve patients better,” he said. “This doesn’t move state policy along, control costs or help clients. The overhead for private plans is two times more than public plans.”

HMO association Executive Director Rick Murdock said the budget proposal represents the start of talks and the plan to privatize mental health is “prudent” because the changes don’t come until after the next fiscal year. He adds the effort would eliminate redundancies in administration and bureaucracy.

Republican Sen. Jim Marleau of Lake Orion, who is on the state appropriations committee, told Crain’s in an email that he wants to find out if the proposal would result in improved quality of services. He sees value in “integrating mental and physical health care” but adds that he’s “not sure if this proposal is the best way.”

The GOP-controlled Legislature will consider the budget in the coming months and likely approve a plan in early June.

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