Lawmakers hear testimony that Michigan lacks psychiatric beds for children and adolescents, pushing families to ERs and out-of-state care

Lansing — The House Oversight Subcommittee on Public Health and Food Security heard more than three hours of testimony July 1 on Michigan—s shortage of psychiatric inpatient beds, with speakers saying gaps in child and adolescent capacity push families into emergency rooms, juvenile justice and out-of-state programs.

Advocates and county officials told the panel that the state—s community mental health (CMH) system no longer has the funding flexibility or licensed residential options it once did, which leaves families with a small set of pathways when a young person—s behavior becomes dangerous or unmanageable. "Kids should not have to go into the juvenile justice system to get residential treatment, which is typically out of state," said Mary Anne Huff, President and CEO of the Mental Health Association in Michigan.

Huff described families who spend weeks in emergency departments unable to secure an appropriate bed and said specialized residential care that used to exist in Michigan has largely disappeared. She told the committee that changes in restraint and seclusion rules and Medicaid payment policy removed essential reimbursement for specialized residential programs and contributed to closures of long-standing facilities. "When those rules changed . . . a place that I—m very familiar with personally . . . had to close," she said, referring to Children's Home of Detroit and other local residential options.

County officials and CMH leaders amplified those concerns. Steven Burnham, retired Kalamazoo County probate registrar, told the committee that CMHs once relied on county general funds as well as Medicaid to try creative local solutions. He said the shift toward Medicaid-dominated funding limits CMHs to services that fit Medicaid billing codes and reduces local flexibility. "The state has shirked their constitutional statutory duty to provide the entire continuum of care," Burnham said, adding that system design decisions have left CMHs without critical pieces to meet the need.

Burnham also cited national benchmarking research: he said a 2024 Treatment Advocacy Center report recommends about 30 psychiatric beds per 100,000 residents and that Michigan currently has roughly 18 per 100,000, implying the state would need roughly 1,000 additional beds to reach that benchmark.

Multiple witnesses described the operational impacts. Anne Runyon, a licensed professional counselor from Grand Traverse County, outlined a composite case of a 14-year-old who cycled through multiple hospitalizations and long emergency-department holds because the nearest appropriate inpatient bed was "2 and a half hours away," limiting family participation in treatment and aftercare. Sarah Bush, a case manager with the Grand Traverse County Sheriff—s Department, said her jail diversion program and local hospital are strained: her office counted 169 people in the jail, of whom 38 were diagnosed as severely and persistently mentally ill, 85 had co-occurring substance-use and mental-health diagnoses, and 40 were primarily substance-use cases. Since January the sheriff—s office filed 12 petitions and obtained seven inpatient placements; five were classified as high acuity, she said.

Speakers identified several gaps and policy barriers they want the Legislature to address:

- Child/adolescent inpatient capacity: Huff estimated Michigan needs "at least 50 to a 100" additional specialized beds (she said that number would be lower if specialized residential options were available). Burnham urged a much larger expansion to meet the Treatment Advocacy Center benchmark.

- Specialized residential licensing and payer coverage: Witnesses said commercial insurers such as Blue Cross Blue Shield will cover psychiatric residential treatment for children but Michigan lacks licensing pathways and adequate in-state residential providers, causing frequent out-of-state placements.

- Medicaid waivers and funding mix: Huff referenced the SED waiver and the 1915(b)(3)-type waiver mechanism; witnesses said cuts to state general fund support (a previous 65% cut to general fund allocations for CMHs was mentioned) have shifted the system toward Medicaid-reimbursable services and constrained flexibility for family-centered, non-billable supports such as respite and community living supports.

- Crisis and step-down services: Testimony called for more crisis residential beds, crisis respite for families, and stronger step-down options from state hospitals into local specialized residential programs so families can participate in treatment transitions.

- Geographic equity: Several witnesses stressed Northern Michigan shortages. Runyon and Sarah Bush described prolonged waits and long transports from northern counties, with Munson Hospital—s psychiatric unit partly closed and Northern Lakes Community Mental Health recently laying off staff.

- Public-safety impacts: Law-enforcement witnesses said officers are required to guard high-acuity detainees at hospitals and sometimes drive multiple hours round-trip for placements, increasing overtime and reducing patrol capacity.

Committee members asked about numbers and system design. Witnesses repeatedly urged the Legislature to consider restoring funding flexibility, expanding licensed residential options for children with serious emotional disturbance, and increasing inpatient capacity while also bolstering community-based prevention and aftercare so children avoided long-term public mental-health involvement.

The subcommittee took no formal policy votes during the testimony; the only recorded committee action at the start of the meeting was approval of the minutes from June 24. The witnesses offered to provide the committee reports and data mentioned in testimony, including the Treatment Advocacy Center analysis and local CMH bed-count data.

The testimony made clear that the shortage is multi-faceted: insufficient in-state beds for severe pediatric cases; few licensed specialized residential options; narrow Medicaid billing rules limiting local innovation; and geographic disparities that concentrate strain in northern counties and on county public-safety resources.

Looking ahead, witnesses recommended a two-track approach: (1) expand in-state inpatient and licensed specialized residential capacity for children and adolescents; and (2) restore funding flexibility and targeted supports (respite, crisis residential, mobile crisis and family engagement) so families can participate in care and avoid emergency-department or juvenile-justice pathways.

The subcommittee did not enact legislation at this hearing; members signaled interest in follow-up briefings and requested written materials cited by witnesses.