Michigan health policy experts take a deep dive into specialty integrated plan legislation


Patrick Jones


In Michigan, there is a consensus that the behavioral health system needs reform. However, lawmakers, health care experts, and those working in the field cannot seem to agree on the best strategy to care for all people. 

At the 2022 Michigan State of Reform Health Policy Conference, three health policy experts discussed one of the more popular and controversial proposals in the legislature: the creation of specialty integrated plans (SIPs). The panelists talked about what the legislation would do and how the legislation will affect the Michigan behavioral health system. 


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The SIP legislation—Senate Bills 597 and 598—would require the Michigan Department of Health and Human Services (MDHHS) to contract with private specialty integrated plans to cover specialty behavioral health benefits, which would be financially integrated with physical health benefits. This would replace the current carve-out system publicly run by local Prepaid Inpatient Health Plans (PIHPs). 

If passed, implementation would occur in four stages, which would each take 2 years to fully implement. The first phase will transition children with serious emotional disturbance out of PIHPs and into SIPs, phase two transitions all people with serious emotional disturbance, phase three transitions the substance use disorder (SUD) population, and the last phase transitions the intellectual and developmental disabilities population. This puts the timeline for full implementation at 8 years after the bill’s passage.

The two bills are currently awaiting a vote from the Committee of the Whole in the Senate. 

Speaking on the panel were Dave Schneider, Managing Principal at Health Management Associates, Dominick Pallone, Executive Director of the Michigan Association of Health Plans (MAHP), and Laura Appel, Executive Vice President of Government Relations and Public Policy with the Michigan Health and Hospital Association (MHA). 

The panelists all agreed that the Michigan health community wants a change in their behavioral health system and that behavioral and physical health integration is the answer. But, conflicting interests and the challenge of changing the system makes progress challenging. 

Appel said that, though it is not perfect, this legislation represents progress in fixing a broken system in Michigan.

“We have got to move the needle. I’m frustrated about the 8 years of implementation and it will be super hard, but we are favorable towards getting this started. If we don’t start now, we will never start,” Appel said.

Pallone—who is supportive of this legislation—said that seven out of ten people nationally who have a severe mental health condition also have a chronic physical health condition. These comorbidities solidified a need for integration at the financial and delivery level, Pallone said.

“It’s with those people that we see an integrated package—whether that be SIPs or some other alternative—as having an opportunity to provide tremendous value. We see real savings [in this legislation] mostly on the physical health side,” Pallone said. 

Appel said Michigan needs integration and behavioral health reform because the acute care system is not designed to properly care for those with behavioral health concerns financially or at the delivery level.

“We don’t have a lot of flexibility because we don’t have a lot of money in our system to innovate,” Appel said. “[Hospitals] are very good at being a human repair shop, but are not good at being a public health system.”

Another concern the panel highlighted is around losing safety net providers at community mental health centers (CMHs) when the state starts contracting with non-Medicaid provider groups through the SIPs.

Pallone said this legislation aims to grow the CMH network, and they would not be exclusive to one plan or geographic location. In theory, CMH workers and behavioral health professionals from CMHs around the state would be in network in every SIP plan. This would allow rural Michiganders on a SIP plan to get care from a CMH potentially far away through a telehealth visit. 

However, Appel said that the health care workforce issue needs to be dealt with before this type of work to increase access can happen.

“Here’s the thing about our current system, there are hundreds of people who don’t have a provider to worry about losing,” she said. “Our shortage of behavioral health professionals is dire. When a person is in crisis, any change is frightening, but the system is just not adequate right now.”