Michigan appropriations subcommittee hears statewide overview of CCBHC Medicaid model, PPS options and cost implications

The Department of Health and Human Services Appropriations Subcommittee heard a virtual briefing on the certified community behavioral health clinic (CCBHC) model and Michigan’s Medicaid demonstration on the model from Rebecca Farley, senior advisor at the National Council for Mental Well-being.

The presentation outlined how CCBHCs set a nationally defined standard for comprehensive behavioral health services, paired with a Medicaid prospective payment system (PPS) intended to support expanded staffing, crisis capacity and non‑billable activities such as outreach and data analytics. Rebecca Farley said, “PPS is the backbone of this model. It’s what makes all the innovations of CCBHCs possible.”

Nut graf: The subcommittee’s discussion focused on choices Michigan will face as its demonstration — which began Oct. 1, 2021 — approaches its 2027 expiration, including whether to pursue a Medicaid state plan amendment (SPA), which PPS option to use, how to define geographic service areas and how to limit or expand eligibility for state certification. Those choices affect Medicaid spending, the state’s ability to sustain clinics launched with federal grants and how crisis capacity and access are distributed across urban and rural areas.

Farley described two federal paths for CCBHCs: SAMHSA grant-funded CCBHCs and Medicaid CCBHCs implemented by states. Under Medicaid implementations, states set certification rules and negotiate PPS rates with clinics; under grants, clinics attest to federal certification and funding is time-limited (SAMHSA grants cited as capped at $4,000,000 over four years). Farley said states can customize the federal minimum standards across staffing, allowable services, community needs assessments and geographic service areas.

The briefing summarized Michigan’s demonstration metrics reported to date: Michigan launched in 2021 with 13 CCBHCs and expanded to 33 after subsequent expansion rounds; 16 of those are also SAMHSA grant recipients and eight additional clinics hold federal grants but are not state‑certified. State evaluation reporting cited by Farley included: 100% of Michigan CCBHCs offering same‑day or open access, 100% providing services in clients’ homes and widespread expansion of crisis services (90% expanded crisis capacity; 73% provide crisis intervention teams). Farley said more than 1,000 people have been referred to CCBHCs via law enforcement and specialty courts in Michigan.

On payment design, Farley reviewed four PPS options (two daily, two monthly) and explained tradeoffs: the simplest approach (PPS 1, a single daily rate) requires less complex cost reporting and is similar to federally qualified health center PPS designs; monthly or stratified PPS options allow states to set higher rates for high‑need populations or to carve out separate crisis payments. Farley noted Michigan currently uses PPS 1 and includes quality bonus payments in its PPS design.

Committee members asked about cost impact and federal match. In response to Senator Cherry’s question, Farley confirmed the enhanced federal match paid during the demonstration would revert when a state leaves the demonstration: “It does. Yes.” She provided Michigan’s current rates as reported in discussion: “In Michigan, your normal FMAP is 65.3%, and your EF MAP is loading, 75.71%.”

Members raised local implementation issues. Senator Huizenga described a county crisis stabilization center established with law enforcement partners and asked whether CCBHCs would duplicate existing community crisis capacity. Farley said community partnerships are an option: “When there is existing community capacity… partnership is certainly the preferred option over duplication of services.” She added that community needs assessments and state policy choices should drive whether a CCBHC builds services directly or partners with existing providers.

Farley reviewed national examples showing reduced inpatient psychiatric admissions and emergency department use in some states that expanded crisis response and CCBHC capacity (Oklahoma, Missouri). She noted that increased outpatient utilization and higher payment rates can raise state behavioral health spending while producing offsetting reductions in higher‑cost settings and other public‑sector costs; she cited analyses from New York and Kansas as examples of varied net fiscal impacts depending on assumptions and local conditions.

Senator Erwin asked whether PPS rates for individual clinics are publicly available; Farley said some states publish PPS rates and offered to help refer the committee to states with published data. Multiple members discussed service‑area overlap, eligibility for state certification (whether federal grantees must be certified), rebasing frequency for rates and quality bonus design; Farley said states retain discretion on all those issues as they transition to a SPA.

The subcommittee took two formal actions during the meeting. Members adopted the previous meeting minutes (motion by Senator Erwin; supported by Senator Bair), recorded by the clerk as adopted. The committee later adjourned by unanimous consent.

The presentation and follow‑up questions signaled that Michigan’s next major policy decision point will be how to translate the demonstration model into a permanent Medicaid pathway before the 2027 expiration — choices that will determine certification rules, payment methodology, oversight tools and the scope of services supported by Medicaid funding.

Ending: The subcommittee thanked the presenter and indicated interest in follow‑up data (including state PPS rate publication and more detailed cost analyses) as Michigan plans for the post‑demonstration transition.