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Ottawa County CMH warns state Medicaid restructuring could reshape regional system; legal challenge pending
Summary
Community Mental Health of Ottawa County leaders told the board Sept. 26 that a state plan to restructure Medicaid pre-paid health plans is moving forward and that the CMH system has filed legal challenges; a Lakeshore Regional Entity meeting also raised conflict-of-interest concerns after two members signaled they might join a private network.
Community Mental Health of Ottawa County officials told the board on Sept. 26 that the state’s plan to restructure how Medicaid behavioral health services are managed could change local operations and is already the subject of litigation.
Chief Executive Officer Michael said the CMH system has filed legal challenges seeking to halt the procurement that would create new “mega regions” to manage Medicaid behavioral health; a hearing on an injunction is set for Oct. 9. He said if a judge grants the injunction, the state’s procurement would be paused; if not, applications from bidders would proceed and the process could be concluded by February 2026.
The issue reached the Lakeshore Regional Entity (LRE) board this month after two members — Kent County’s Network 180 and West Michigan Mental Health — passed resolutions indicating interest in joining Beacon Health Systems’ separate procurement. Bob Davis, the Ottawa County board representative on the LRE, told the CMH board he raised conflict-of-interest concerns because those members remain part of the LRE while appearing to pursue a separate network. “This information was too new,” Judge Gardner told the LRE, Davis said, and the board did not fully discuss the matter; Davis said the lack of immediate answers “kinda smells.”
Michael said Ottawa County will not sign a resolution committing the county to a new network unless there is clear authority and certainty. He said county corporate counsel and staff advised against signing onto a potential new regional entity before details are established. “As a county department for Ottawa County, I will not be signing any resolution that commits the county to things that we’re not actually sure is going to happen,” he said.
Board members and staff described continued uncertainty across the system. Michael said the CMH will continue operating regardless of the state’s procurement outcome, but its role and the contracts that support services would likely change if management shifts to new regional vendors.
Why it matters: The state’s planned procurement would change who manages the Medicaid financing and network for community behavioral health services. Local CMHs, regional entities and provider networks would need to adapt to any new contracting structure; board members warned that rapid changes could affect local partnerships and staffing.
Next steps: The board said it will monitor the injunction hearing on Oct. 9 and follow Lakeshore Regional Entity developments. Michael said CMH leadership is delaying community strategic planning work until October so the agency can better assess the state’s actions.
