Riverwood CEO warns state rebid could upend local mental‑health services

Rick Compton, chief executive officer of Riverwood Center, the community mental‑health authority serving Berrien County, told the Berrien County Board of Commissioners that a Michigan Department of Health and Human Services (MDHHS) rebid threatens “the current community mental‑health system in Michigan and to Riverwood.”

Compton said MDHHS announced the rebid over Memorial Day and plans to consolidate the current 10 PIHP (prepaid inpatient health plan) regions into three regions, shifting management from public PIHPs such as Southwest Michigan Behavioral Health (SWMBH) to private managed‑care organizations including Blue Cross Blue Shield and other large plans. He said MDHHS has set an effective date of Oct. 1, 2026 for the new contracts.

The change would, Compton told the commissioners, end local PIHP functions in Berrien County and convert Riverwood from an entity that both pays and manages services to primarily a direct service provider that must contract with whichever private plans win the bids. "We will no longer be a payer of services to providers," Compton said. "We'll no longer manage services."

Why it matters: Compton said Riverwood contracts with more than 200 local providers and that about two‑thirds of its budget goes to paying other providers — examples he named included Lakeland, Logan Center, Beacon and numerous small residential homes. Riverwood, he said, served roughly 5,700 distinct people across service lines and recorded more than 276,000 encounters last year; Certified Community Behavioral Health Clinic (CCBHC) outpatient visits exceeded 45,000. Riverwood has received federal funding: Compton said Riverwood’s CCBHC work has operated under a SAMHSA grant since 2021 and that Riverwood received “over $4,000,000” from SAMHSA.

Compton listed specific programs and services he said are at risk if the rebid proceeds as proposed: utilization management and authorizations, inpatient screening at hospitals, recipient rights and compliance work, case management, and juvenile‑focused programs such as multisystemic therapy (MST) and functional family therapy (FFT). He said those diversion programs have reduced placements in juvenile centers and saved the county money.

Compton expressed concern about smaller residential providers that operate on thin margins. "Some of the smaller ones... literally live on a month to month basis of payment," he said, adding that those providers may struggle to adapt to managed‑care contracting and could be cut off from timely payments.

Compton said the rebid may reduce consumer voice and local oversight because consumers currently can raise issues with Riverwood board representatives; under managed‑care plans, he said, authorizations and appeals would run through large regional call centers. He also warned that claims denials could increase and that the private plans have higher overhead than PIHPs, potentially increasing costs. "We're about 2%. They're about 15%," he said, referring to administrative overhead.

Legal and political responses: Compton said several organizations — including the Michigan Association of Counties, NAMI and the ARC — have spoken against the proposed changes. He also said some counties and providers are exploring legal challenges and that the state retains the right to alter the rebid terms. When Commissioner Jacqueline asked what role the legislature could play, Compton said lawmakers control the purse strings and could press MDHHS to delay or change the plan, adding elected officials would face political pressure if vulnerable populations lost services close to an election.

Compton told the board that the state recently announced additional one‑time funding for the CMH system — an approximate $160 million statewide infusion — and that about $15 million of that was allocated to the SWMBH region, with roughly $3 million earmarked for Riverwood. He said Riverwood’s current financial position was sound but that neighboring counties remain strained.

Compton urged education, lobbying and legal review as responses and said Riverwood and allied organizations have been engaging legislators and coalition partners. "Stop it, educate, lobby, and inform," he said.

Ending: Compton provided the commission with a letter he said staff could use if they elected to contact state leaders; he also left additional materials in the meeting packet. Commissioners did not take formal action on the rebid during the session.