Last night, the Network180 Board of Directors voted to adopt a resolution expressing opposition to termination of the state contract with the Lakeshore Regional Entity:
"Resolved, that the Network180 Board of Directors requests that the Michigan Department of Health and Human Services (MDHHS) does not terminate its contract with the Lakeshore Regional Entity, thereby ensuring respect for the law and the rich history of Michigan’s mental health system, which is clear in its intent to maintain a publicly governed mental health system."
The full resolution is availalbe at the link below:
Network180 Board of Directors' Resolution
In addition, all ten PIHPs in the state published an open letter to the State of Michigan opposing termination of the contract with the LRE:
"The decision by the Michigan Department of Health and Human Services (MDHHS) to terminate the public Lakeshore Regional Entity (LRE) Pre-paid Inpatient Health Plan (PIHP) contract and transition it to Beacon Health Options, a privately held, for-profit entity, without stakeholder input poses a serious threat to our state's public mental health system. In addition to the lack of stakeholder participation, this action was taken without adhering to the typical and proper procurement procedures."
The full letter can be read at the link below:
Open Letter from PIHPs to State of Michigan
Update on Actions Taken by MDHHS and the Lakeshore Regional Entity
We wanted to make the community aware on Friday, July 26, 2019, MDHHS published another press release announcing their intent to move forward in dissolving the LRE and calling for nominations to create a new board which will take an advisory role in the contract between MDHHS and Beacon Health Options. You can read the press release here.
From the beginning our concern has been the preservation of a locally controlled and accountable public community mental health system in our community and state. There are many unknowns at this point as to the purpose and function of this new board. This board will not be a public oversight board; instead it will serve in an advisory capacity and report to the state rather than to local communities served by the PIHP. Additionally, there is no direct governance over the contract between MDHHS and Beacon Health Options, essentially privatizing the PIHP in its contract with Beacon. This is problematic. The State’s decision puts our public behavioral health system at risk by placing administration of public funding under the control of a private entity.
Lakeshore Regional Entity’s Response:
The Lakeshore Regional Entity and its member CMHs are in agreement that these actions by MDHHS constitute a breach of contract on MDHHS’s part and more importantly, ignore the systemic underfunding and inequitable distribution of funding by MDHHS that created this situation in the first place. The LRE hired an attorney and on Friday, July 26th filed a “Notice and Demand for Evidentiary Hearing”. This is important, because it will allow the Lakeshore Regional Entity to offer evidence about MDHHS's failure to meet its obligations under the contractual agreement with the LRE, and to provide an opportunity to bring out into the open the issues of inadequate and inequitable funding endangering PIHPs throughout the state that MDHHS refuses to address.
Network180 supports the actions taken by the Lakeshore Regional Entity for the following reasons:
- We believe in preserving the public community health system. The actions taken by MDHHS have the effect of privatizing the PIHP component of the public behavioral health system, affecting 30,000 consumers currently receiving services in the region.
- The State’s decision to dissolve the LRE fails to address the chronic underfunding of the entire system, the true root cause of the LRE's financial situation. Nine of ten PIHPs in Michigan are experiencing losses. The Lakeshore Regional Entity was just the first to run out of reserves.
- The LRE, in partnership with Beacon Health Options, worked to maximize efficiencies and innovation and is positioned to begin rebuilding its reserves in 2020. MDHHS approved this partnership, allowing for one year to make corrections. It’s only been five months.
- A hearing will allow for the LRE to present evidence of system improvements and force examination of MDHHS responses to the systemic underfunding and inequitable distribution of funding for the behavioral health system in Michigan.
While resolution of this disagreement with MDHHS takes place, Network180, the LRE and other member CMHs are 100% committed to no disruption in services to consumers in the region. We will continue to update our community stakeholders as new information develops.
LRE Attorney Letter 07/26/2019
LRE Response to MDHHS FAQs
Member CMHs Respond to MDHHS Notification to End LRE Contract
On Friday, June 28, the Michigan Department of Health and Human Services (MDHHS) issued a proposal to terminate its contract with The Lakeshore Regional Entity (LRE), effective September 30, 2019. The proposal would eliminate local control of a key component of the public mental health system and inject uncertainty into the region’s management of the Community Mental Health System.
On Thursday, July 12, 2019, the LRE member CMHs: Allegan County CMH, Ottawa County CMH, HealthWest (Muskegon County CMH), Network180 (Kent County CMH) and West Michigan CMH (Mason, Lake and Oceana County CMH), drafted a formal letter to MDHHS expressing “deep concern” about their decision to end the LRE contract,
The model you propose is not innovative, but punitive. It’s not creative, but short-sighted. Most importantly it’s not informed by the data or by careful inquiry into the system and processes at work in the LRE and in the partnership between the LRE and Beacon. The relationship MDHHS strongly endorsed and encouraged is just barely 5 months old and already reaping benefits [...]. This makes your proposed action not strategic or planful, but reactive and retaliatory.
In their letter, sent to Jeffery Wieferich, Director of the Bureau of Community Based Services for MDHHS, they highlight several reasons for their concern:
• The behavioral health system is chronically underfunded, a fact which MDHHS has publicly acknowledged.
• Funding is not distributed equitably throughout the state’s regions. Nine of the ten regions in our state are experiencing budget shortfalls – the LRE was the first to run out of reserves.
• The LRE, in partnership with Beacon Health Options, worked to maximize efficiencies and innovation and is positioned to begin rebuilding its reserves in 2020.
• MDHHS’s decision puts our public behavioral health system at risk by placing administration of public funding under the control of a private entity. As a publicly run system, Community Mental Health agencies put Medicaid funding received into services. All available revenue is invested directly into the system and serving the public. A for-profit company would not be under mandate to ensure the same level of funding goes into services. This could result in a reduction of services beneficial to consumers and families, but not deemed cost-effective by a private entity.
In addition to the letter sent by the LRE member CMHs, a formal letter was sent yesterday by the LRE’s attorney to the State of Michigan demanding a retraction of the intent to cancel the LRE’s contract. There has been no acknowledgement of these letters from MDHHS at the time of this communication.
You can view the CMH member response to MDHHS's decision here.
[Added 07/22/2019] The LRE's response to MDHHS's notice can be read here.
Network180 Responds to State Decision to End Contract with Lakeshore Regional Entity
On Friday, June 28, 2019, the Michigan Department of Health and Human Services publicly announced its intent to end the contract with the Lakeshore Regional Entity. The public notice can be found here.
The Lakeshore Regional Entity is responsible for administering Medicaid funding to seven (7) counties in West Michigan: Allegan, Kent, Lake, Mason, Muskegon, Oceana, and Ottawa counties.
SUMMARY OF MDHHS statements:
- The State will terminate their contract with the Lakeshore Regional Entity at the end of the fiscal year (Sept 30, 2019).
- The State intends to re-procure for a new PIHP during fiscal year 2020.
- The State intends to contract directly with Beacon Health Options to assist in the administration of the region for FY202, while the State is re-procuring the PIHP.
- This includes the elimination of the Lakeshore Board of Directors and replace it with an advisory board formed by the state, representing many stakeholders. Network180 will be represented on the advisory Board.
Network180 assures Kent County consumers, families and our service partners that there is no change to the services delivered or the funding received. The high-quality services provided to Kent County residents will continue without disruption.
“We think this decision by the State is ill-advised because it effectively eliminates local control of an organization which has been jointly led by representatives from across Western Michigan. We are committed to working with the Regional partners to overturn this decision and build solutions that strengthen the local, public behavioral health system in West Michigan. Network180 expects to play an important role in the development of the new direction,” says Bill Riley, Network180’s interim Executive Director.
We will continue to post updates to this page as new information is released.